Draft amendment to Payment Systems and Electronic Fund Transfers law sent to PMO

ISLAMABAD: The Finance Division has developed a draft legal package to amend the Payment Systems and Electronic Fund Transfers (PS&EFT) Act, 2007, mandating the availability of at least one digital mode of payment, including QR codes, and granting the enforcement powers to local governments.

Official documents revealed that a draft amendment in the PS&EFT Act has been sent by the Finance Secretary to the Prime Minister’s Office (PMO) for in-principle approval to circulate the same to the Cabinet/Cabinet Committee for Disposal of Legislative Cases (CCLC). To reinforce adoption at the retail and grassroots level, the government is moving to mandate Raast QR code-based payments.

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Sources said that Pakistan has taken a major step toward a fully digital and cashless public finance ecosystem with the establishment of the Government Payments and Receipts Transformation Unit (GPRTU) under the Ministry of Finance.

The new unit is designed to lead and coordinate the digital enablement of government entities for seamless integration with Raast, Pakistan’s instant payment system.

The GPRTU will act as a central nerve centre for transforming government payments (G2P) and collections (P2G), ensuring standardized, timely, and end-to-end digitization across the public sector. Its core responsibilities include building the government-facing Raast Connect, providing project management support, guiding departments in on boarding to the payments aggregator, facilitating business process re-engineering, and securing technical expertise from NITB and provincial IT boards where required.

Under the broader Cashless Pakistan initiative, the government has set ambitious targets for digital adoption by December 2026. These include increasing active digital merchants to 2 million, expanding digital banking users to 120 million, and scaling annual digital transactions to 15 billion.

The digitization of non-tax P2G payments is targeted to reach 100 percent, while digital remittances credited directly into bank accounts are expected to exceed 80 percent.

As of November 2025, Pakistan recorded 3.3 billion digital transactions, with 89 percent of certain P2G streams digitized. Financial inclusion has risen to 67 percent, with a clear roadmap to reach 70 percent by 2026, alongside a steady reduction in the gender gap in financial access.

Several high-impact federal entities have commenced or advanced their transition to digital payments.

The Power Division, Petroleum Division, Pakistan Railways, NADRA, and Pakistan Post Office are at various stages of digitization, with full Raast-based integration planned by 2026.

On the G2P side, major disbursement entities such as the Benazir Income Support Programme (BISP), Pakistan Military Accounts Department, and Central Directorate of National Savings have initiated large-scale transitions, with 100 percent digitization timelines set between March and June 2026.

At the provincial level, departments in Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, and Gilgit-Baltistan have been identified as high-impact leaders.

Education, healthcare, highways, housing, and revenue departments are being brought onto digital rails, particularly for salary, pension, vendor, and fee payments.

Islamabad Capital Territory has already issued bylaws mandating digital payment solutions at retail outlets, while provincial governments are reviewing their legal frameworks or drafting new Digital Payment Acts. In the interim, all provinces except AJK have issued notifications requiring digital payment acceptance.

Several tangible wins have been recorded since the last high-level review. A fully end-to-end e-Stamp solution for ICT has been finalized and integrated with SBP’s 1-Link system, eliminating the need for physical paper at any stage.

The solution is ready for launch and represents a significant leap over earlier provincial models.

Digital connectivity is also expanding. Under the Prime Minister’s direction, internet access has been provided to 178 schools and 10 Basic Health Units in ICT, alongside free public Wi-Fi at 28 major public locations, including parks, hospitals, bazaars, and transport hubs.

Copyright Business Recorder, 2025