Plastic money usage on rise; payment cards’ number reaches 36.6 mln

ISLAMABAD: The use of plastic money has witnessed rise in Pakistan with increasing of awareness among

public, touching 36.6 million number of payment cards till June 2017.

The number of payment cards issued in Pakistan has reached 36.6 million by June 2017, up from 33.6 million by

June 2016, showing the year on year growth of 8.8 per cent.

A break-up of Payment Cards issued by State Bank of Pakistan (SBP) on Wednesday revealed that Debit Cards are 17.9 million with 48.7 per cent share in user base.

Automated Teller Machine (ATM) Only Cards are 8.05 million with 22 per cent share in user base.

Credit Cards are 1.3 million with 3.5 per cent share in user base and Social Welfare Cards are 9.11 million with 24.9 per cent share in user base.

The transactions of money or cash withdrawals through these cards are done by customers through banking infrastructure such as ATM and POS machines wherever available in the country.

Among these cards, debit and credit cards are also used for online shopping on different e-commerce service providers. There are 571 locally registered E-Commerce Merchants having their merchant accounts in eight banks (as of end of June 2017), showing limited boarding of E-Commerce merchants in the country.

The number of reported Debit Cards in circulation were 17.9 million and during the year under review, 362.1 million transactions worth Rs. 4.1 trillion were processed using Debit Cards.

Debit Card transactions contributed a share of 0.7 million (27.1 per cent) in volume and Rs. 4.9 billion (23.5 per cent) in value of E-Commerce transactions during the year.

Around 26.1 million POS transactions worth Rs.108.5 billion were conducted using Debit Cards.

Similarly, until June 2017, the number of reported credit cards in circulation were 1.3 million and during financial year 2016-17, 1.8 million E-Commerce transactions of worth Rs. 15

billion and 23.9 million POS transactions of Rs.136.5 billion were processed by these Credit Cards.

Among the total E-Commerce transactions of the year, Credit Card transactions have the highest share of 1.8 million (67.5 per cent) in volume and Rs. 15 billion (72.3%) share in value.

Social welfare cards are issued by Federal or provincial governments to support needy and disaster affected people. These cards include Benazir Income Support Programme (BISP), Watan Cards and payment Cards issued for Internally Displaced People (IDPs) due to flood disasters or any other reasons. During the year under review, 10.7 million transactions worth Rs. 44.6 billion were conducted using these cards.

Moreover, despite the expansion of e-Payment Channels and instruments, a variety of paper based instruments like cheques, Pay Orders, Demand Drafts, Telegraphic Transfer, Dividend Warrants etc. are still widely used within the country.

Among these paper based instruments, cheques are the preferred mode of transactions for cash withdrawals, funds transfers, commercial and Government payment transactions.

The share of other paper-based instruments is fairly insignificant in terms of volume and value of transactions.

During the year under review, 451.8 million transactions of worth Rs. 139.6 trillion were carried out using paper based instruments. These transactions showed a growth of 3.8 per cent in volume of transactions and a decline of 4.4 per cent in value of transactions, which included 99.4 million paper based instruments used for depositing Rs. 11.3 trillion into bank accounts.

Despite the increased adoption of e-Banking channels, cash payments remained relatively high reflecting the preferred use of cash as mode of payment.