Raast and Pakistan's Digital Economy: How Instant Payments Are Reshaping the Nation's Financial Futu: By Muhammad Qasim

Finextra

a day ago

Pakistan's financial sector is in the middle of a transformation — one that is changing how money moves, how businesses operate, and how people interact with the economy. At the heart of this transformation is Raast, the State Bank of Pakistan's (SBP) instant, low-cost, and secure digital payment system.
Launched with the goal of improving financial inclusion and reducing reliance on cash, Raast is not just a payment method; it's a game-changer for the country's digital economy. From street vendors to freelancers, from small retail shops to large corporations, and from government institutions to ordinary citizens — Raast is making transactions faster, cheaper, and more transparent.
In this article, we'll explore what Raast is, how it works, its adoption trends, the explosive growth in transaction volumes, and how it is reshaping Pakistan's digital economy.
What is Raast?
Raast — meaning 'direct' or 'straight path' in Urdu — is Pakistan's first real-time payment system designed to provide instant, low-cost, and secure money transfers between individuals, businesses, and government entities.
Unlike traditional bank transfers that can take hours (or even days), Raast processes payments in seconds, 24/7, across all participating banks and digital wallets.
Key Features of Raast
Instant transfers — Payments clear in real time, any time of day.
Low or zero fees — Most banks offer Raast transfers free of charge.
Mobile number–based transfers — Send and receive money without sharing long account numbers.
Secure SBP infrastructure — Fully regulated and backed by the central bank.
Supports bulk payments — Ideal for salaries, pensions, and government subsidies.
Raast's Role in Pakistan's Digital Transformation
Before Raast, Pakistan's payment systems were fragmented, with slow transfers and limited interoperability between banks. Digital transactions existed, but they were often expensive, unreliable, and inaccessible to rural populations.
Raast has bridged this gap by:
Encouraging cashless transactions — Reducing reliance on physical currency.
Boosting financial inclusion — Extending access to millions without prior exposure to banking.
Connecting e-commerce and gig economy platforms — Supporting instant settlements for small sellers and freelancers.
Facilitating transparent government payments — Reducing corruption and leakage in welfare programs.
Transaction Volumes: The Scale of Raast's Impact
The success of Raast can be measured not only in adoption rates but also in the massive transaction volumes it processes.
Latest Transaction Data
According to the SBP's Q3 FY 2024–25 payment system statistics:
Raast processed 371 million transactions worth PKR 8.5 trillion in just one quarter.
Since launch, it has handled 1.5 billion transactions with a cumulative value exceeding PKR 34 trillion .
Digital channels now account for 89% of all retail transactions by volume in Pakistan.
Mobile banking, branchless wallets, and e-money accounts processed 1.686 billion transactions worth PKR 27 trillion in the same quarter.
This exponential growth shows how deeply Raast is embedding itself into Pakistan's financial DNA.
How Raast is Reshaping the Digital Economy
1. Fueling Financial Inclusion
Raast has given millions of Pakistanis access to formal banking for the first time.
Rural populations can now send and receive money instantly using just a phone.
Microfinance institutions integrate with Raast, expanding their reach.
Women and marginalized groups can transact without visiting physical bank branches.
2. Boosting Small Businesses and E-Commerce
The e-commerce industry in Pakistan has grown rapidly, but one challenge was slow and expensive payment settlements. Raast changes this by:
Allowing instant settlements for online vendors.
Reducing the need for cash-on-delivery (COD), which previously accounted for 60–70% of e-commerce payments.
Helping micro-merchants avoid costly point-of-sale infrastructure.
3. Empowering Freelancers and the Gig Economy
Pakistan is among the top countries for freelance work, with millions earning online. Raast supports these workers by:
Providing quick local payment settlements.
Reducing transfer costs from local platforms.
Enabling platforms to pay thousands of workers simultaneously.
4. Streamlining Government Payments
Government agencies and welfare programs use Raast for:
Ehsaas program payouts
Salary and pension disbursements
Subsidy transfers for fuel, food, and utilities
By moving these payments to Raast, the government improves speed, reduces leakages, and increases transparency.
5. Reducing Cash Dependency
Pakistan's economy has long relied heavily on cash. This creates problems like tax evasion, corruption, and inefficiency. Raast's growing popularity is a direct blow to cash dominance by:
Offering a free, fast alternative to cash.
Making digital transactions accessible even for low-income groups.
Creating a financial trail that strengthens the formal economy.
Case Studies: Real-World Impact of Raast
Case 1: A Street Vendor in Lahore
A chai seller who previously accepted only cash now uses Raast to receive payments directly to his bank account via mobile number. Customers can pay instantly, and he no longer worries about carrying large amounts of cash at night.
Case 2: A Karachi-Based E-Commerce Store
Before Raast, the store owner relied on COD, which caused delays and cancellations. After integrating Raast payments, settlements are instant, returns are lower, and customer trust has improved.
Case 3: Government Subsidy Disbursement
A small farmer in Sindh receives fertilizer subsidies via Raast directly into his account, cutting out middlemen and ensuring he gets the full amount.
Challenges to Raast's Full Potential
While Raast has made great strides, some hurdles remain:
Digital Literacy Gaps — Many rural and older populations still need education on how to use Raast safely.
Internet & Mobile Coverage — Remote areas lack consistent access to reliable mobile data.
Cybersecurity Concerns — As transactions grow, so does the risk of fraud and phishing scams.
Resistance to Change — Some people still prefer cash due to habit or distrust in banking.
The Road Ahead: Future of Raast and Digital Payments in Pakistan
The SBP has ambitious plans to expand Raast's scope:
Merchant Payments — Making Raast the default payment method for retail transactions.
Cross-Border Transfers — Enabling remittances through Raast in collaboration with global payment systems.
QR Code Integration — Allowing small shops to accept payments simply by displaying a QR code.
Open API Ecosystem — Encouraging fintech startups to build innovative apps using Raast's infrastructure.
If these expansions succeed, Pakistan could see cashless transactions become the norm within a decade, dramatically increasing economic transparency and efficiency.
Conclusion
Raast is more than just a payment method — it's a pillar of Pakistan's digital transformation. By enabling instant, low-cost, and secure payments, it is helping formalize the economy, support small businesses, empower freelancers, and improve government efficiency.
The transaction volume growth — from zero to over 1.5 billion transactions worth PKR 34 trillion in just a few years — is proof of its adoption and potential. With the right infrastructure, education, and security measures, Raast could lead Pakistan into a future where digital finance is not the exception but the default.