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The State Bank of Pakistan on Thursday launched a person-to-person payment system that will provide an easy and hassle-free digital fund transfer service to customers, as well as help increase financial inclusion and promote digitisation of the economy in the country.
“We think Raast can be a game-changer for driving our agenda on pushing financial inclusion in Pakistan. Raast P2P is a state-of-the-art, instant, and free person-to-person payment system designed to make it easier to adopt digital channels for daily payment needs by de facto using a mobile number as a bank account,” SBP Governor Dr Reza Baqir told The News.
“Our launch of Raast P2P is part of our broader strategy of promoting digitization in Pakistan. Other key steps include our recently-announced licensing framework for digital banks, a conversation recent initiatives,” Baqir added.
“Taken together, our financial and banking system is ripe for a major evolution where the customer would come first,” Baqir said. The SBP has issued instructions that will enable P2P fund transfers in the country through Raast, correct and direct, Pakistan’s Instant Payment System developed by the central bank, it said in a statement.
This offers an instant, reliable and zero-cost digital payment system to the people of Pakistan, it added. At least 22 banks have completed the necessary technological upgrades and other needed preparations and are offering these services to their account holders as of February 3.
Under Raast, P2P fund transfers and settlement services, bank customers would be able to send and receive funds in their accounts using their bank’s mobile application, internet banking or over the counter services. For customers’ facilitation, they can set their registered mobile phone number as their Raast ID and link it to their preferred International Bank Account Number (IBAN) using the bank’s mobile application, internet banking or visiting their bank branch, it explained.
Once a customer has set her/his mobile phone number as the Raast ID, others can send money to her/him using her/his mobile phone number without the need to know the account number or any other details. Bank customers can still use the Raast service for sending or receiving funds using their IBANs even if they do not have a Raast ID or prefer to use their IBAN. The SBP has directed all banks to make this service available on at least three customer channels, including mobile application, internet banking and branch counters.
“More banks will start offering Raast P2P services after completing their needed technological upgrades and other preparations to offer Raast P2P. The up-to-date version of the above table will remain available at the SBP’s landing page for Raast and will show the progress of remaining banks to integrate with Raast,” it said.
The SBP has directed banks to ensure that funds successfully transferred through Raast should be credited into the recipients’ accounts within 20 seconds of receiving the credit advice from the Raast system. In order to promote the use of digital financial services in the country, banks have been advised not to levy any charges on Raast related services and all transactions conducted through Raast would be free for end customers.
Analysts believe embracing instant payments is a step in the right direction to help people discourage use of cash for meeting their needs. The real challenge is how fast all banks adopt this service and people shift from cash.
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