A country that ran on cash for decades is now conducting nine out of ten retail transactions digitally. Here is how it happened, and what comes next.
Five years ago, if you wanted to pay your electricity bill in Lahore, you stood in a queue. If you wanted to send money to a family in a village outside Peshawar, you handed cash to a bus driver or a hawala agent and hoped for the best. Today, both of those transactions happen in under thirty seconds on a smartphone, and they are just two of the billions of digital payments now flowing through Pakistan’s economy every quarter.
The numbers coming out of the State Bank of Pakistan’s latest Quarterly Payment Systems Review tell a story that would have sounded like fantasy a decade ago. In the January to March 2026 quarter alone, retail payments through formal channels reached 3.7 billion transactions worth Rs168.8 trillion. Of those, 92 percent were conducted through digital channels, and within that digital slice, 78 percent ran through mobile banking apps and e-money wallets. Mobile wallets are not a supporting act in Pakistan’s payments story anymore. They are the main stage.
From Financial Exclusion to 132 Million Wallets
Pakistan’s fintech surge is remarkable precisely because of where the country started. A decade ago, formal banking penetration sat in the low twenties, one of the weakest rates in South Asia. Vast stretches of the population, particularly women, rural households, and informal workers, had never held a bank account.
Mobile wallets changed the math. By March 2026, mobile banking and digital wallet registrations had crossed 132 million, a 37 percent jump from 96 million just a year earlier. Nearly half of Pakistan’s 268 million bank accounts are now linked to a mobile app or digital wallet. Academic research tracking the period from FY2019 to FY2025 found digital wallet penetration climbing from 10.5 percent to just over 50 percent, with forecasts suggesting it could reach around 72 percent by 2028 if the current momentum holds.
The engine behind this shift was not a Silicon Valley import. It was homegrown, telco-backed, and built for the realities of a cash-heavy economy.
Where the Money Actually Goes
The everyday use cases are exactly what you would expect: bill payments across more than 1,500 billers, mobile top-ups, school fees, remittances from the Gulf, and person-to-person transfers that once travelled by bus.
But wallets are also powering Pakistan’s digital consumption economy. E-commerce hit US$12.46 billion in 2024, and merchants without wallet checkout options are measurably losing sales. Digital entertainment is part of the same picture. Independent research platform that monitors Pakistan’s online gaming ecosystem PKSlotsPro, has observed that payment reliability, withdrawal speed, and support for local wallets such as JazzCash and Easypaisa have become major factors influencing user trust. Their published audits show that payment experience often matters more than promotional offers when users evaluate digital entertainment platforms.When a payment method becomes the trust signal for an entire category of online spending, that is a sign the wallet has graduated from tool to infrastructure.
The Duopoly: JazzCash and Easypaisa
Two names dominate every conversation about Pakistani fintech.
Easypaisa, launched by Telenor in 2009, was the country’s first mobile wallet and remains a household name. It processed roughly 2.7 to 2.8 billion transactions in 2024 with a transaction value of approximately Rs9.5 trillion, a figure equal to about 9 percent of Pakistan’s GDP. Its registered user base surpassed 59 million by December 2025, with around 20 million monthly active users. In January 2025 it became Pakistan’s first licensed digital retail bank, a regulatory milestone that opens the door to full-service digital banking for the mass market.
JazzCash, born as MobiCash in 2012 and rebranded in 2015, matched that Rs9.5 trillion in gross transaction value in 2024, backed by nearly 20 million monthly active users and a merchant network of 350,000 active retail partners. Its Payoneer integration has made it the default payout rail for a large share of Pakistan’s four-million-strong freelance workforce, one of the largest in the world.
Challenger fintechs such as SadaPay, NayaPay, and Zindigi have carved out loyal niches among younger, urban users with instant virtual cards and slicker interfaces, but the JazzCash and Easypaisa duopoly still defines the market’s centre of gravity.
Raast: Pakistan’s Answer to UPI
If the wallets are the vehicles, Raast is the motorway. Launched by the State Bank of Pakistan in January 2021, Raast is the country’s instant payment system, enabling free, real-time transfers between any bank and any wallet. Analysts routinely describe it as Pakistan’s equivalent of India’s UPI, and the comparison is earned.
Raast recorded more than a twofold increase in both transaction count and value in FY25, according to the SBP’s payment systems data. Its person-to-merchant segment, the piece most directly tied to everyday commerce, jumped from 36.3 million to 55.9 million transactions in a single quarter, with more than 2.6 million merchants onboarded. QR-based merchant payments hit 87.3 million transactions in the same period, up 41 percent in volume quarter on quarter, and 2.5 million QR-enabled merchant locations are now registered nationwide.
The strategic effect of Raast is subtle but profound: it dismantled the walled gardens. The era of free transfers only within the same wallet is over, and with it, one of the biggest frictions holding back adoption.
The Unfinished Business
For all the momentum, the revolution is uneven. The consumer side has sprinted ahead while the merchant side, especially small and informal businesses, lags. Pakistan had only around 248,000 POS machines across 217,000 registered merchants as of March 2026, according to industry analysis of SBP data, a thin layer of acceptance infrastructure for a country of 240 million people. QR codes are cheaper to deploy and are filling the gap, but the informal economy remains largely cash-first.
Geography is another fault line. Balochistan’s wallet penetration is less than half of Punjab’s, and researchers consistently identify digital readiness, meaning internet access, financial literacy, and trust, as the single biggest determinant of who adopts and who is left behind. Consumer protection concerns around account freezes, fraud, and aggressive digital lending practices also need sustained regulatory attention if trust is to keep pace with growth.
The Verdict
Pakistan has done the hard part. It built interoperable rails, licensed credible players, and convinced tens of millions of first-time users that money on a screen is safer than cash under a mattress. The next phase is less glamorous: getting the corner shop, the rickshaw driver, and the village tailor to accept what the customer is already holding.
If the last five years took Pakistan from financial exclusion to 132 million wallets, the next five will decide whether digital payments become the default for the entire economy rather than half of it. On current trajectory, betting against Pakistani fintech looks like the riskier position.