The promise of digital payments

TECHNOLOGY has a way of solving problems that policy struggled with. When telecommunications deregulation failed to connect rural Pakistan, mobile phones arrived and did the job. When grid electrification could not reach large sections of the population, solar panels arrived and enabled off-grid power. Where policymakers debated, technology simply moved forward. The lesson is simple: sometimes the bottleneck is not money or intent. It is the wrong tool. Digital payments are an underreported revolution of this sort. They solve a problem that decades of policy effort could not touch. From near zero in 2010, the last year in which Pakistan tried to launch a massive, policy-driven documentation exercise, digital payments are one of the fastest-growing transformations quietly changing the face of the economy. Look at what the data shows. In FY25 something like 88 per cent of retail payments flowed through digital channels. Branchless banking app users grew to 79.2 million. Mobile banking app users separately grew to 24.1m. Point-of-sale (POS) machines increased from 54,490 in FY17 to 195,849 in FY25 — a 260pc increase in nine years. QR-enabled me­­rchants jumped from essentially zero to more than 1m by FY25. Branchless banking agents grew from around 350,000 a decade ago to 731,814 by FY25. By value, digital payments rose from 21pc to 29pc of retail payment value in a single year. These numbers describe a massive transformation of how money moves through the economy. Imagine what happens as this accelerates. A merchant in Multan accepts payments through QR codes and soft POS machines on his phone. His customer base expands because payment friction disappears. He shifts from cash-only to digital. His supplier also shifts. Supply chain payments become traceable. A manufacturer in Sialkot now tracks every payment from distributors across the country. Business credit becomes easier to assess because transaction history exists. Banks lend to businesses they previously could n