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KARACHI, Oct 02 (APP):For catalyzing merchant payments on Pakistan’s instant payment system RAAST and promoting financial inclusion, the UNDP’s Better Than Cash Alliance, Thursday, released a report presenting a practical blueprint for responsible pricing .
The report, titled ‘Merchant Payments on RAAST: Responsible Pricing for Impact and Inclusion’, recommended a responsible MDR framework, early incentives and governance mechanisms to scale merchant payments on RAAST, while keeping costs affordable for MSMEs and viable for FSPs.
Deputy Governor State Bank of Pakistan Saleemullah alongwith Managing Director UNDP’s Better Than Cash Alliance Nshuti Mbabazi launched the report here at a ceremony that was attended by representatives of SBP and different banks and financial institutions.
The report is aimed at extending support to policymakers and providers in designing merchant solutions for small businesses and long-term ecosystem viability at the right price point to support the attainment of the State Bank of Pakistan’s digital financial inclusion goals.
The report indicated that despite progress in digital finance, cash still dominated Pakistan’s economy, costing the country trillions of rupees each year in lost tax revenue, cash handling, and idle liquidity. It also outlines how to scale merchant payments by uniting policymakers and providers behind a sustainable, affordable model that works for micro and small businesses.
The report recommended a responsible, cost-based pricing mechanism, combined with early adoption incentives and round the clock recourse to build trust in digital transactions and also suggested creating a National Merchant Payments Working Group to coordinate data-driven reviews, financial literacy initiatives, and merchant education.
The Deputy Governor SBP Saleemullah, in his speech, termed RAAST as a national digital public infrastructure and the pivot of digitization efforts and said, “The ultimate goal is to win the war against cash and that can only be achieved through partnerships and collaborations.”
Underscoring the significance of supporting legal framework and robust digital payment infrastructure for promotion of digital transactions and cashless economy in the country, he also highlighted the central banks’ vision and measures for digitization of the economy as well as progress made so far under a comprehensive strategy. It would be unfair to let our people stand in long queues for submission of taxes and transactions in this era of modern technology, he remarked.
SBP, FBR and other relevant public sector organisations had integrated their digital systems and legal and regulatory frameworks were aligned while partnership among all the stakeholders was being encouraged for efficient working of the digital ecosystem, he said adding that this strategy is working well and it is a win-win situation for all the relevant institutions.
“With strong consumer protection and fair competition, we will scale person-to-merchant payments in a way that builds trust and inclusion,” he vowed.
He said that the Raast has 47 million registered users and transactions of over Rs 1 trillion were being settled in a short period of just nine days. But our goal is to expand the digital network to micro level. The government has rolled out a 3-year program for promotion of digital economy and a subsidy of Rs3.5 billion was being offered to financial institutions for attracting merchants on the Raast platform in the current financial year.
Managing Director, Better Than Cash Alliance, Nshuti Mbabazi, appreciated RAAST for prioritizing the needs of micro and small businesses in Pakistan. This is an exemplary step in enacting the UN Principles for Responsible Digital Payments, she said and added that objectives of creating a digital economy could be achieved by building end-to-end digital payment experiences that benefit every citizen and ensuring clear, quick, and responsive recourse.
“With responsible RAAST pricing and fully transparent communication -‘particularly on pricing’ – your people can turn everyday transactions into confidence, growth, and inclusion,” she stressed and assured to extend every possible cooperation for promotion of digital economy so that Pakistan could achieve the goal of a cashless economy by 2030.
The key findings from the report included responsible pricing as policy with a 0.35% Merchant Discount Rate (MDR) floor, with sector-specific adjustments and no issuer interchange; early-stage incentives like micro-transaction zero fees, cashback or tax relief.
The report also recommended formation of a National Merchant Payments Working Group to oversee dynamic reviews and ecosystem coordination. It proposed measures for confidence building and inclusion, dispute resolution, gender-intentional onboarding, and alternate options for low-connectivity areas.