Raast and the Payment Revolution: How Pakistan’s Instant Payment Infrastructure Is Changing Financial Behaviour
Pakistan built one of the world’s fastest-growing instant payment systems in four years. It then discovered that infrastructure and adoption are different problems entirely.
By Mehmood ul Hasan Qadir
Economist & Financial Analyst | Dubai, UAE
The first trillion rupees processed through Raast took 360 days. Today, the same volume moves through the system every nine days. By May 2026, Raast had processed 1.9 billion transactions worth Rs 44.3 trillion since its launch in January 2021 — a trajectory that places it among the fastest-scaling instant payment systems in the developing world. The system now serves 48 million registered users and processes approximately 3 million transactions daily.
Those numbers describe an infrastructure achievement. They do not describe a behavioural transformation. More than 85% of Pakistan’s transactions are still conducted in cash. Over Rs 11.2 trillion circulates outside the banking system in physical currency, according to SBP Deputy Governor Saleem Ullah, speaking at an October 2025 industry event. The gap between what Raast has built and what it has changed is the defining challenge of Pakistan’s digital payments story.
What Raast Is and How It Works
Raast — an Urdu word meaning straight, direct, or correct path — is Pakistan’s first instant payment system, developed under the leadership of the State Bank of Pakistan with technical and financial support from the Bill and Melinda Gates Foundation. It operates as a national payment rail: a centralised infrastructure layer that enables any account holder at any participating financial institution to send money to any other account holder instantly, at zero cost to the end user, using only a mobile number or bank account number as the identifier.
Development began in 2018 under the National Payment Systems Strategy, launched in 2019 with World Bank support. Bulk payments — dividend disbursements, government salary transfers — went live in January 2021. Person-to-person transfers launched in February 2022. The person-to-merchant payment module, enabling QR code-based payments at retail points, followed in September 2023. The system operates 24 hours a day, seven days a week, processes payments in seconds, and is free for consumers — a deliberate policy choice designed to remove the cost barrier that had historically made digital payments unattractive relative to cash for small-value transactions.
The architecture mirrors India’s Unified Payments Interface in its interoperability design — any bank, fintech, or electronic money institution connected to the Raast rails can offer instant transfers to and from any other connected institution. By September 2024, 39.5 million Raast IDs had been registered. Mobile and internet banking transactions, which represented 17% of total financial transactions in early 2020, had reached 75% of all transactions by volume by September 2024, according to SBP payment system data.
The P2P Success
Raast’s person-to-person payment adoption is genuinely remarkable by any developing-economy standard. The system processed 7.9 million P2P transactions in 2022 — its first year of consumer-facing operation. That figure rose to 102 million in 2023 and approximately 2 billion transactions in the full year 2025, according to Momentum Pakistan analysis of SBP data. The volume processed in the first quarter of FY2025 alone — Rs 4.79 trillion, of which Rs 4.69 trillion was peer-to-peer transfers — exceeded the total processed in the entire first two years of operation.
The adoption curve reflects several structural advantages Raast had at launch. Pakistan’s mobile penetration provided the distribution layer. The banking system’s existing account base — which grew by 127% between FY2019 and FY2024 according to ADB data — provided the addressable population. The zero-cost model eliminated the primary friction that had made mobile money transfers expensive relative to cash. The interoperability design meant users did not need to be on the same platform as the recipient — a structural advantage over proprietary mobile wallets like Easypaisa and JazzCash, which had historically been limited to within-network transfers.
The primary use case driving P2P adoption is family remittances — money sent from urban earners to rural households, from employers to informal workers, and increasingly from overseas Pakistanis repatriating funds through formal channels. Innovations in Practice research confirms that sending money to family was cited as the primary reason for off-net transfers by 55% of users who had made an account-to-account transfer.
The P2M Problem
The person-to-merchant payment module — Raast’s commercial transformation play — tells a different story. Despite processing over Rs 44 trillion in total since inception, the merchant segment accounts for a fraction of that volume. The Better Than Cash Alliance study, launched at an October 2025 event attended by SBP Deputy Governor Saleem Ullah, was unambiguous: “RAAST has achieved remarkable success in P2P and government-to-person transactions. Merchant adoption remains low and unsustainable without reforms.”
The barriers are structural and mutually reinforcing. Pakistan’s retail economy operates on cash for reasons that go beyond habit. Merchants in the informal economy — estimated at 40% of GDP or more by SMEDA — have a positive incentive to avoid digital transactions: every documented sale is a potential tax liability. World Bank Findex data recorded that only 1.1% of Pakistani adults made a digital merchant payment in 2021 — a baseline so low that the subsequent growth in P2P transactions has not materially altered the merchant payment landscape.
The SBP’s response has been a subsidy programme: a Rs 3.5 billion allocation for the period September 2025 to June 2026, reimbursing merchants at a rate of 0.5% of each P2M QR code transaction or Rs 100, whichever is lower. The programme runs for three years, designed to reduce the cost of digital adoption to zero for participating merchants. The SBP’s stated ambition — routing all government payments through Raast by the end of FY2025–26, covering salaries, pensions, vendor bills, and welfare disbursements — would add a substantial volume of institutional transactions to the system regardless of merchant behaviour.
Key Data
| Indicator | Data Point | Period | Source |
|---|---|---|---|
| Total Raast transactions since launch | 1.9 billion | As of late 2025 | SBP / Express Tribune |
| Total value processed since launch | Rs 44.3 trillion | As of late 2025 | SBP |
| Registered Raast users | 48 million | May 2026 | Momentum Pakistan / SBP |
| Daily transactions | ~3 million | September 2024 | SBP |
| Time to process Rs 1 trillion P2P | 9 days | 2025 (vs 360 days at launch) | SBP Deputy Governor |
| P2P transactions FY2022 | 7.9 million | FY2022 | ADB / SBP |
| P2P transactions FY2023 | 102 million | FY2023 | ADB / SBP |
| Cash as % of all transactions | >85% | October 2025 | Better Than Cash Alliance |
| Currency circulating outside banking system | Rs 11.2 trillion | October 2025 | SBP Deputy Governor |
| Digital merchant payments (adults, 2021) | 1.1% | 2021 | World Bank Findex |
| Mobile/online transactions as % of total | 75% | September 2024 | SBP |
| P2M subsidy programme | Rs 3.5 billion | Sep 2025–Jun 2026 | Ministry of Finance / SBP |
The UPI Comparison
The comparison with India’s Unified Payments Interface is instructive and humbling in equal measure. UPI processed approximately 13.9 billion transactions worth Rs 20.6 trillion in a single month — December 2024 — against Raast’s cumulative 1.9 billion across four years. The structural difference is not infrastructure — both systems operate on comparable interoperable rail architectures. It is commercial adoption.
India’s MDR policy — abolishing the Merchant Discount Rate on small-value UPI transactions, effectively making merchant digital acceptance free — drove adoption at scale by removing the commercial barrier for small retailers. Pakistan’s equivalent approach, the Rs 3.5 billion subsidy programme, attempts the same mechanism but operates on a much smaller fiscal base and for a defined three-year period rather than as a permanent structural change. The PASHA fintech industry report from December 2025 notes that “in every successful payments transformation, adoption has followed incentives” — pointing to UPI’s MDR abolition and Brazil’s PIX programme as the relevant models.
The deeper challenge is that India’s UPI scaled in an economy where merchant formalisation was more advanced, digital literacy was higher among urban retail operators, and the GST documentation system had already created incentives for merchants to record transactions. Pakistan’s informal economy — structurally larger as a share of GDP than India’s, and more deeply rooted in cash precisely because of the tax documentation it avoids — presents a harder problem than improved payment infrastructure alone can solve.
Conclusion
Raast’s P2P trajectory is one of Pakistan’s most credible technology success stories of the past decade — a genuinely fast, free, and interoperable payment system built in four years on infrastructure that now processes a trillion rupees every nine days. The P2M challenge is a different category of problem. Bringing Rs 2.5–3 trillion of the Rs 11.2 trillion circulating outside the banking system into the digital economy — the SBP’s stated near-term target — requires not just cheaper digital payments but a tax and documentation environment that makes formalisation rational for the merchants who currently have every incentive to stay in cash. The infrastructure is ready. The incentive structure is not.
Sources
- State Bank of Pakistan. Payment System Reviews, FY2022–FY2025. Karachi: SBP Payment Systems Department. https://www.sbp.org.pk/psd/psr.asp
- State Bank of Pakistan. SBP Vision 2028 — Digital Financial Services Framework. Karachi: SBP, 2023.
- Asian Development Bank. From Cash to Digital: Advancing Financial Inclusion in Pakistan. Manila: ADB, March 2025. https://development.asia/insight/cash-digital-advancing-financial-inclusion-pakistan
- Better Than Cash Alliance / United Nations. Merchant Payments on RAAST: Responsible Pricing for Impact and Inclusion. New York: BTCA, October 2025.
- Express Tribune. “SBP to Use Raast for Govt Payments.” October 3, 2025. https://tribune.com.pk/story/2570322/sbp-to-use-raast-for-govt-payments
- Express Tribune. “Digital Payments Up 38%, But Cash Still Dominates Markets.” November 4, 2025. https://tribune.com.pk/story/2575730/digital-payments-up-38-cash-still-rules
- Business Recorder. “SBP to Route All Government Payments Through Raast by End of FY26.” October 3, 2025. https://www.brecorder.com/news/amp/40385692
- PASHA. Boom of Fintech in Pakistan and the Role of RAAST. Islamabad: Pakistan Software Houses Association, December 2025. https://www.pasha.org.pk/wp-content/uploads/Boom-of-Fintech-in-Pakistan-and-the-Role-of-RAAST-.pdf
- Innovations for Poverty Action. “New Evidence on Consumer Awareness: Can Pakistan’s Instant Payment System RAAST Unlock Financial Inclusion?” February 2024. https://poverty-action.org/new-evidence-consumer-awareness-can-pakistans-instant-payment-system-raast-unlock-financial
- Momentum Pakistan. “Raast Transactions Shockingly Reach Rs 50 Trillion.” May 5, 2026. https://www.momentumpakistan.com/blog/raast-transactions-shockingly-reach-rs-50-trillion
- TechJuice. “Pakistan’s Digital Financial Services Expand, But Full Adoption Lags.” March 24, 2025. https://www.techjuice.pk/pakistans-digital-financial-services-expand-but-full-adoption-lags
- Central Bank Payments News. “Pakistan’s Journey Toward a Digital Payments Ecosystem.” January 23, 2026. https://cbpn.currencyresearch.com/blog/2026/01/23/pakistans-journey-toward-a-digital-payments-ecosystem
- World Bank. Global Findex Database 2021 — Pakistan. Washington DC: World Bank, 2022.