Pakistan’s retail payment transactions surged 58 percent to 14.3 billion in fiscal year 2025-26, with digital channels accounting for 92 percent of the total volume, as mobile-based payments emerged as the main driver of the country’s accelerating shift away from cash.

According to the State Bank of Pakistan’s (SBP) Annual Payment Systems Review FY2025-26, retail payments reached 14.3 billion transactions worth Rs672.7 trillion during the year, compared with 9.1 billion transactions valued at Rs611.6 trillion in FY25.

While transaction volume jumped 58 percent, the value of retail payments increased by only 10 percent, highlighting the rapid expansion of high-frequency, relatively low-value digital transactions.

The share of digital payments in total retail transactions increased to more than 92 percent in FY26 from 88 percent in FY25 and 85 percent in FY24. In value terms, however, digital payments accounted for only 38 percent of retail payment value, although this was up from 29 percent a year earlier.

The SBP said 13.2 billion retail transactions worth Rs257.1 trillion were processed through digital channels during FY26, compared with 8 billion transactions worth Rs178.6 trillion in FY25.

Mobile phone-based solutions remained the biggest contributor to the digital payments boom, processing 11.1 billion transactions during the year—79 percent higher than the previous year.

These channels, including bank and branchless banking mobile apps, e-money wallets, USSD, SMS banking and call centre/IVR services, accounted for 78 percent of all retail transactions and 84 percent of digital transactions.

However, the value of mobile-based transactions remained comparatively low at Rs155 trillion, or 23 percent of total retail payment value, reflecting their predominantly low-value and high-frequency nature.

Internet banking also maintained strong growth, with transactions increasing 15 percent to more than 341 million, while their value jumped 55 percent to over Rs60.9 trillion.

The digital payments infrastructure expanded sharply during the year. The number of QR-enabled merchants more than tripled from 1.09 million in June 2025 to 3.84 million by June 2026, while POS devices increased 49 percent to 337,791.

POS-enabled merchants also rose from 190,823 to 295,367, while daily card payments at POS outlets reached nearly 1.5 million compared with around one million a year earlier.

The number of e-commerce merchants registered with banks increased from 9,584 to 23,356. Account/wallet-based payments accounted for almost 96 percent of e-commerce transactions processed through banks.

The expansion was also reflected in digital banking users. Branchless banking mobile app users rose from 79.2 million to 99.1 million, while mobile banking users increased from 24.1 million to 30.4 million. Internet banking users climbed from 14.9 million to 17.5 million, whereas e-money wallet users increased 37 percent to 7.9 million.

Despite the rapid digitalisation of payment volumes, over-the-counter (OTC) channels continued to dominate in terms of value. OTC transactions through bank branches and branchless banking agents amounted to Rs415.7 trillion in FY26, accounting for about 62 percent of total retail payment value.

The SBP report said OTC fund transfers alone represented 46 percent of retail payment value, compared with 28 percent for digital fund transfers, indicating that higher-value transactions have yet to fully migrate to digital channels.

Merchant payments through accounts also gained significant traction, increasing 141 percent during FY26, while card-based merchant payments grew 47 percent. Account-based merchant payments accounted for 13 percent of total retail payment transactions, compared with 4.4 percent for card-based merchant payments.

The report also highlighted a continued migration of bill payments to digital channels. Digital bill payments and mobile top-ups accounted for 89 percent of such transactions, up from 87 percent in FY25 and 85 percent in FY24.

Meanwhile, Pakistan’s large-value payment infrastructure also recorded strong growth. PRISM+, the upgraded real-time gross settlement system launched in August 2025, processed 6.3 million transactions worth Rs1,565.8 trillion during FY26, up 5 percent in volume and 24 percent in value.

The value settled through PRISM+ was equivalent to 12.3 times Pakistan’s nominal GDP of Rs126.9 trillion, compared with 11.1 times in FY25.

The SBP said PRISM+ marked Pakistan’s transition to the ISO 20022 global messaging standard across both retail and large-value payment systems, aimed at improving efficiency, transparency and security.

The central bank noted that despite substantial progress in digital payment adoption, significant scope remained to digitise higher-value transactions involving businesses, government entities and financial institutions.