The State Bank of Pakistan (SBP) on Wednesday directed all banks to provide a set of minimum services on internet banking (IB) and mobile banking (MB) channels to promote use of digital modes for various kinds of payments and replace the manual process.
“For encouraging use of internet and mobile banking services by their customers, banks will not levy any activation, subscription or annual charges on their customers for using such services,” said SBP in statement. “All banks should provide minimum set of services on their IB and MB channels including bill payments, funds transfer, beneficiary management, limit management, credit and debit card management, stop cheque payment etc [means a customer can ask his or her bank to stop payment on any cheque which he or she considers not required for making payment]’’, directed SBP.
The digitization of the entire payment process is hindered if the customers can make payments to only those billers that are registered with their own bank. Hence, in order to facilitate the customers, the banks have been advised to make necessary arrangements to ensure that their customers can make online payments to maximum number of billers, state the circular issued by SBP.
The banks will issue debit card to all new account holders and customers who have not previously opted for a debit card to promote the use of payment card, unless the customer opts not to receive any payment card. However, this requirement will not be applicable to customers that are not literate, photo account holders and visually impaired persons.
The banks have been authenticating their customers at the bank counters using signatures and paper-based instruments. The existing EMV card infrastructure provides secure authentication. Therefore, there is potential to facilitate customers by using this infrastructure to replace the manual authentication process, said the SBP.
“In this regard, the banks and microfinance banks are now permitted to authenticate their customers at branch counters using chip-and-pin cards and 2 Factor Authentication (2FA) and provide them banking services,” said the circular.
Considering the significance of digitization, the banks have also been advised to create a role of chief digital officer (CDO) who would be responsible for steering the digitization efforts.
The already taken initiatives for digitization are just a tip of the iceberg which is in line with SBP’s declared objectives to digitize payment and financial services, said the State Bank.
The SBP also launched the country’s first instant payment system, RAAST which is another step by the current government towards the digitization of Pakistan. This digital payment initiative by Prime Minister Imran Khan is aimed at including poor segments of the society in the formal economy. It will enable end to end financial transactions among businesses, individuals and government entities.