Pakistan plans to digitize all federal and provincial government payments by the end of 2026, marking a major milestone in the country’s digital finance agenda as it seeks to improve transparency, reduce cash dependency and accelerate financial inclusion.
Speaking at the Pakistan Banking Summit in Karachi, Minister of State for Finance Bilal Azhar Kayani said the government aims to ensure that all payments made by federal and provincial authorities, including salaries, pensions and vendor payments, are processed digitally before the end of the year.
The initiative builds on Pakistan’s expanding digital payments ecosystem, which has seen rapid growth through platforms such as the Raast instant payment system, mobile banking and branchless banking services.
Government Payments Move Fully Digital
The government’s strategy focuses on replacing manual payment methods, including paper cheques, with digital transactions across all public sector entities.
According to Kayani, every pensioner, government employee and public-sector vendor is expected to receive payments digitally, reducing administrative delays while improving convenience and operational efficiency.
Digitizing government disbursements is also expected to strengthen financial transparency by creating auditable digital transaction records and reducing reliance on cash-based processes.
The initiative represents one of Pakistan’s most significant public sector digital transformation programmes to date.
Digital Banking Adoption Continues to Accelerate
Pakistan’s digital banking ecosystem continues to expand rapidly.
Kayani revealed that the country now has approximately 135 million digital banking users, exceeding the government’s June 2026 target of 120 million.
The growth reflects increasing adoption of mobile banking, internet banking and digital wallets, supported by wider smartphone penetration and continued investment in digital financial infrastructure.
A growing digital user base provides a stronger foundation for expanding digital government services and cashless transactions.
Raast and Digital Payments Drive Financial Modernization
Data from the State Bank of Pakistan highlights the continued growth of the country’s digital payments ecosystem.
During the January-March 2026 quarter, digital channels accounted for 92% of Pakistan’s 3.7 billion retail payment transactions.
Meanwhile, app-based payments processed through branchless banking providers, commercial banks and electronic money institutions reached 2.9 billion transactions worth Rs42 trillion, representing 78% of all digital payments.
The Raast instant payment system processed 742.1 million transactions valued at Rs23.3 trillion during the same period, underscoring its growing role as the country’s national real-time payment infrastructure.
Digital Payments Support Economic Transparency
Reducing dependence on cash remains a strategic priority for Pakistan’s financial sector.
Greater use of digital payments can improve tax compliance, reduce opportunities for financial leakage and strengthen transparency across government operations.
Digital transaction records also support more efficient public financial management while improving access to formal financial services for citizens and businesses.
As governments worldwide modernize payment systems, digital public finance is becoming an increasingly important component of broader digital transformation strategies.
Why This Matters
Digitizing government payments improves efficiency, strengthens transparency and accelerates financial inclusion by expanding the use of secure digital financial services. It also supports broader economic modernization by reducing reliance on cash and encouraging wider adoption of digital payment platforms.
For Pakistan, the goal of making all government payments fully digital by the end of 2026 represents a major step toward building a modern digital economy. For the financial services sector, continued growth in platforms such as Raast and digital banking demonstrates the country’s accelerating transition toward a more connected, transparent and cash-lite financial ecosystem.
Editor’s Note
Digital payments are increasingly becoming the backbone of modern public finance. While consumer adoption often receives the most attention, digitizing government disbursements can have an even greater impact by improving efficiency, reducing administrative costs and strengthening fiscal transparency. Pakistan’s latest target reflects a broader global trend in which governments are leveraging national payment infrastructure to modernize public financial management. If successfully implemented, the initiative will not only expand digital financial inclusion but also reinforce the role of platforms such as Raast in supporting the country’s long-term digital economy ambitions.
