Pakistan to Launch National Digital Payment Index to Accelerate Payment Digitization
In a landmark move to track and enhance the progress of digital payments, Pakistan is set to introduce a national Digital Payment Index (DPI), aiming to assess the penetration and effectiveness of digital payment infrastructure across the country. The initiative will provide a crucial tool for policymakers, financial institutions, and private sector players to gauge the adoption of digital payments and steer future developments in line with Pakistan’s digital transformation agenda.
The DPI will serve as a comprehensive framework to measure the extent of digital payment adoption across various channels, sectors, regions, and demographic groups. By identifying gaps and opportunities in the current digital payment ecosystem, the index will support targeted policy interventions and investments, driving the nation toward a more inclusive and efficient financial system.
Tracking Pakistan’s Digital Payment Evolution
The planned index, to be developed under the leadership of Karandaaz Pakistan—which previously partnered with the State Bank of Pakistan (SBP) to launch the RAAST payment system—will combine scattered data into a structured, standardized, and easy-to-track measure. The initiative is designed to offer valuable insights into consumer behavior and the effectiveness of digital payment solutions, enabling various stakeholders to track the evolution of Pakistan’s digital payment infrastructure.
Globally, several countries have already adopted similar indices to monitor the progress of payment digitization. One prominent example is the Mastercard Digital Payment Index, which provides a holistic view of the digitalization of consumer payments in Central and Eastern European countries. Inspired by such models, Pakistan’s DPI will include key indicators such as account penetration, card usage, POS (Point-of-Sale) adoption, QR code payment enablement, and mobile payment infrastructure.
Key Objectives of the Digital Payment Index
The DPI is envisioned to achieve several important objectives:
- Measure Adoption and Usage: The index will track the adoption and usage of digital payment systems, highlighting key trends in transaction frequency and volume across different types of digital channels.
- Offer Actionable Insights: The DPI will provide actionable insights for stakeholders, combining fragmented market data into a reliable and structured measure that captures shifting consumer behavior and payment preferences.
- Understand Consumer Behavior: By delivering insights into payment acceptance infrastructure and the perceived convenience and security of digital payments, the index will help understand consumer preferences and pain points.
- Standardize Metrics: It will define and standardize key metrics to measure the growth and performance of digital payments across different regions, sectors, and demographics.
- Support Data-Driven Decision-Making: The index will offer a robust, data-driven foundation for regulators, financial institutions, and the private sector to make informed decisions and monitor the impact of their efforts over time.
- Benchmarking Progress: The DPI will allow for benchmarking Pakistan’s digital payment progress against other countries, identifying best practices and opportunities for improvement.
Periodic Updates for Informed Decision-Making
To ensure the index remains relevant and accurate, the DPI will be updated periodically, using data provided by the SBP and Karandaaz Pakistan. This will provide a dynamic tool for continuous monitoring of digital payment trends and consumer behavior in Pakistan.
Karandaaz Pakistan has already invited proposals for designing the comprehensive DPI, with a focus on integrating data from various publicly available sources into a standardized measurement tool. The DPI will play a crucial role in helping policymakers, regulators, and private sector players identify gaps, formulate targeted interventions, and monitor the impact of these efforts over time.
As Pakistan moves forward with its digital transformation agenda, the introduction of a national DPI is a significant step toward building a vibrant digital economy. By fostering increased adoption and innovation in the payment space, the DPI will position Pakistan at the forefront of digital financial services in the region, paving the way for sustainable economic growth.
