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Thursday, February 15, 2024

Raast instant payment system: A step closer towards digital Pakistan

The faster payment system will be used not only to settle small-value retail payments in real-time but also to provide cheap and universal access to all players in the financial industry, including banks and fin-techs.

In a huge step towards his “Digital Pakistan” vision, Prime Minister Imran Khan launched Pakistan’s first instant digital payment system “Raast” on Monday, which will include poor segments of the society in the formal economy and will enable secure, fast, efficient, and transparent financial transactions.  It will enable end-to-end digital payments among individuals, businesses and government entities instantaneously.

The Prime Minister, while addressing the gathering, said this initiative would help include the low-income groups and make them part of the mainstream economy. He was optimistic that it would go a long way in fighting poverty, particularly in the rural areas.

The faster payment system will be used not only to settle small-value retail payments in real-time but also to provide cheap and universal access to all players in the financial industry, including banks and fin-techs.

Imran Khan said the instant payment system would not only document the economy but also generate more taxes to help build the country.

Read more: Roshan Digital Accounts by SBP cross $200 million, PM thanks overseas Pakistani

“Our cash economy is a major hurdle for a country of 220 million population to realize its full potential. Cash economy’s biggest disadvantage is tax collection” PM Khan added. He lamented that Pakistan collects the lowest tax in the world. Only 2 million are taxpayers and out of these 2 million people, 70 percent of the taxes are paid by only 3000 taxpayers.

Raast will slowly and gradually enable people to move from a cash economy to a digital economy and it will take advantage of its population. It will also enable the inclusion of the poorer segments of the society towards Pakistan’s digital development, said the premier. 

The Prime Minister said foreign remittances had been constantly on the rise for the past five months and had helped stabilize the rupee.

After a gap of 17 years, the country’s current account had gone into surplus, and lowered pressure on the rupee, and played a key role in strengthening the national economy.

Read more: Imran Khan and UNDP vow to boost Pakistan’s digital transformation

Any pressure on the dollar raised the cost of commodities – like edible oil, ghee, pulses etc imported for the common man, he added.

Imran Khan said with the increase in revenue collection, the government would create extra space for spending on human development – education, health, and clean drinking water.

He said Pakistan was among the top countries with the highest growth rates in the region, but today it was left behind. He hoped a move towards Digital Pakistan would help put the country back on track.

The people in Pakistan were used to the cash economy, however, now it was time to move forward, he added.

The prime minister said the program would help give a boost to the Ehsaas Programme; particularly its mobile wallet and extend its reach to the women in the rural areas. His government was working for the empowerment of rural womenfolk and had been included in various economic activities.

Read more: Pakistan joins hands with Saudi Arabia to launch Digital Cooperation Organization

He extended gratitude to Queen Maxima of the Netherlands especially for the inclusion of women in financial inclusion, the Bill & Melinda Gates Foundation for their support in the launch of the program, also for Polio eradication, and the World Bank for its role in the launch.

Queen Maxima appreciated Pakistan on the launch of the instant payment system, effective strategy to deal with the Covid-19 pandemic, and the Ehsaas Programme for women empowerment.

According to the data available with the State Bank of Pakistan (SBP), digital payments only account for 0.2% of Pakistan’s 100 billion transactions today, whereas the share of digital transactions in the peer countries ranges from 1.5% to 7%.

SBP Governor Reza Baqir said the government employees and pensioners would be able to get payment of salaries and pensions in seconds. It would cut down on the delays in that regard.

Baqir said it would also allow help curb corrupt practices and provide simple, secure, and transparent transactions.

Read more: Government and World Bank to conduct ‘blue economy’ study of Pakistan’s ocean

He said under the Prime Minister’s directions, the Roshan Pakistan system had met with success. The banks were also extending support to the people, who desired to take loans for building homes.

Pakistan has had low electronic transactions due to low banking penetration, lack of trust and awareness of digital payment methods, limited interoperability, difficult accessibility, and high cost of transactions.

However, Raast, the new instant payment system will facilitate retail payment settlements with great efficiency.

Read more: “Remarkable turnaround” in economy despite Covid-19: PM Khan

Courtesy: APP with additional input from GVS news desk