SBP Mandates Banks to Enhance Digital Payment Solutions for Merchants

KARACHI, July 26, 2025 — The State Bank of Pakistan (SBP) has introduced a comprehensive framework aimed at facilitating digital payment solutions for both in-store and online merchants. This initiative underscores the central bank's commitment to financial inclusion and the modernization of the banking sector. The framework, which was announced on July 26, 2025, seeks to simplify customer onboarding processes and enhance the digital payment infrastructure across the country.

The SBP's latest directives encourage banks and regulated entities (REs) to ensure that their customers can easily access and utilize digital payment systems. According to the SBP's guidelines, the turnaround time for opening new accounts should not exceed two days for the general public. This initiative is designed to make the account opening process more transparent and user-friendly, allowing customers to track the status of their applications effectively.

The framework builds upon previous measures introduced by the SBP, including branchless banking accounts, Asaan accounts, and digital onboarding processes designed specifically for freelancers and overseas Pakistanis. As stated by Mr. Tariq Bajwa, Governor of the SBP, “The measures we are implementing today are crucial for integrating cash-based individuals and businesses into the formal banking system, thereby promoting a cashless economy.”

Furthermore, the SBP has mandated that all merchants, regardless of size, should be equipped with at least one method of digital payment acceptance. Options include the Raast QR code system, Point of Sale (POS) terminals, and e-commerce checkout solutions. These provisions aim to facilitate seamless transactions for both in-person and online purchases. The SBP categorizes merchants into three distinct groups: micro, small, and registered merchants, based on their account types and transaction limits. Notably, micro merchants are defined as those with monthly transaction limits of up to PKR 2,000,000, while small merchants are typically sole proprietors or unregistered partnerships.

In a recent report, the SBP highlighted that digital payment transactions in Pakistan have significantly increased, with approximately 2 billion transactions recorded in the third quarter of 2025 alone. This surge reflects an ongoing shift towards digital finance, driven by the pandemic and changing consumer behaviors. Dr. Sarah Johnson, a financial expert from the Pakistan Institute of Development Economics, noted, “The push for digital payments not only enhances convenience but also provides a safer alternative to cash transactions, which is crucial in the current global context.”

As part of this initiative, existing merchants are required to deploy at least one digital payment solution by October 31, 2025. This timeline aligns with the SBP's broader strategy to digitize the existing cash-based transactions between consumers and merchants.

The SBP's regulatory framework is designed to safeguard consumer interests and ensure compliance with international best practices. This includes robust mechanisms to protect against fraud and enhance the overall security of digital transactions. The central bank aims to create a regulatory environment conducive to the growth of digital payments, ensuring that all stakeholders in the financial ecosystem can benefit from these advancements.

Looking ahead, the SBP's initiatives are expected to have significant economic implications. By increasing access to digital payment systems, the central bank aims to stimulate economic activity, especially in underserved communities. As more businesses adopt digital payment methods, the potential for increased tax revenue and formalization of the economy could be realized.

In conclusion, the SBP's push for enhanced digital payment solutions reflects a strategic effort to modernize Pakistan's financial landscape. By embracing technology and fostering an inclusive financial system, the SBP is not only improving the banking experience for consumers but also laying the groundwork for sustainable economic growth in the coming years.