E-transactions ousting manual transactions

Aided by the proliferation of electronic payment infrastructure and growing consumer confidence, transition from manual, paper-based systems to electronic payment systems has been on the rise.
E-bankings contribution to the total retail transactions increased to 36.8 percent in the last quarter of FY10, from 34.2 percent in the year-ago period. However, as the paper-based medium is still preferred more to facilitate large-denomination transactions, the share of electronic medium, in terms of value, remained relatively stagnant at 10.6 percent, according to the fourth quarterly report on Retail E-Payments and Paper-Based Instruments published by the SBP.
Low processing cost, along with speed and ease of access, offered by technology has been fuelling demand for electronic payments infrastructure. Banks have added around 466 ATMs and 631 retail online branches (RTOB) into their network in FY10, bringing the total number of ATMs and RTOB in the country to 4,465 and 6,671, respectively.
ATM is the leader in the automated transaction, facilitating around 58 percent of the total electronic transactions, whereas, in value terms, RTOB is the major contributor, with 94 percent share.
Though, the countrys automated payment infrastructure has come a long way, it is still fairly less mature than other developing countries in Asia. The low penetration of ATM can be gauged from the fact that there are just around four ATMs per hundred thousand adults and 5.49 branches per thousand kilometers, according to CGAP - a Washington based consultative group on the global micro-finance environment.
With a large population living in far-flung areas, where it is not feasible to expand the service through ATMs and POS due to high cost of infrastructure, the prospects of m-banking have come to the fore.
Following the launch of m-banking products in the market last year, transactions through cellular phones rose to 0.13 million in last quarter of FY10, from 0.022 million in the same quarter a year earlier. At the same time, in terms of value, mobile banking has facilitated Rs 762 million worth of transactions, up from about Rs 5 million a year earlier.
Growth is upbeat; however, m-banking system still has to go a long way. But, realising the fact that quite a large portion of rural population is still far away from electronic banking channels, transactions through mobile can become a runaway success.