The rise of mobile banking has completely changed how Pakistanis interact with financial institutions. With more than 161 million people using mobile phones in the nation, mobile banking is a common way to make financial transactions. This development has had a huge impact on Pakistan’s telecommunications sector because it has raised demand for mobile data services and created a need for secure networks. The expansion of mobile banking in Pakistan, its effects on the telecoms sector, as well as the opportunities and difficulties it brings, will all be covered in this article.
Impact of Mobile Banking on Telecom Industry
The development of mobile banking has significantly impacted Pakistan’s telecom sector. Using a mobile device to carry out financial operations, including bill payment, money transfer, and account balance checking is known as mobile banking. Mobile banking is transforming how consumers engage with banks and opening up new business prospects for telecommunications firms in Pakistan as it grows in popularity.
The telecommunications sector is becoming more competitive as a result of mobile banking. To provide customers with mobile banking services, banks and other financial institutions are increasingly in competition with telecommunications firms. As a result, telecommunications firms now have more chances to collaborate with banks and other financial institutions to provide mobile banking services.
The demand for safe and dependable networks is another effect of mobile banking on Pakistan’s telecom sector. Customers anticipate secure and dependable mobile banking transactions because they include the transmission of sensitive financial information. To make sure that their networks are secure and able to manage the rising demand for mobile banking services, telecommunications providers have boosted their investment in network infrastructure.
The rising demand for mobile data is one of the main effects of mobile banking on Pakistan’s telecoms sector. Demand for mobile data services has significantly increased as a result of the requirement for a dependable and quick internet connection for mobile banking. As a result, telecom firms that provide mobile data services have seen an increase in income.
Additionally, mobile banking could promote financial inclusion in Pakistan. People who previously didn’t have access to traditional banking services can now use their mobile phones to access financial services. This could boost the nation’s financial inclusion and financial literacy.
Additionally, mobile banking could promote financial inclusion in Pakistan. People who previously didn’t have access to traditional banking services can now use their mobile phones to access financial services. This could boost the nation’s financial inclusion and financial literacy.
Statistical Data
According to the central bank of Pakistan, mobile phone banking and internet banking increased by 141.1% and 81.1%, respectively, during the fiscal year FY22. As mobile phones and the internet become more widely used, so do digital payments in Pakistan.
The central bank provides significant advancements in the nation’s payments eco-system in its Annual Payment Systems Report for the fiscal year 2021–22, along with an overview of transactions.
According to the State Bank of Pakistan (SBP), ongoing efforts to promote and improve Pakistan’s digital payment system, including the introduction of Raast Person-to-Person (P2P), have made it possible for payments between people, companies, and other entities to be settled in real time.
In January of last year, Pakistan’s central bank introduced Raast, the nation’s first immediate payment system. According to data from the central bank, 8.4 million people used mobile phones for banking during FY22, while 12.3 million people used the internet.
According to the central bank, “mobile phone banking climbed by 100.4% to 387.5 million transactions, while online banking increased by 51.7% to 141.7 million throughout the year.
With value increases of 141.1% and 81.1%, respectively, mobile phone banking and online banking reached Rs11.9 trillion and Rs10.2 trillion.
Similar trends were seen in e-commerce transactions, which saw their volume increase by 107.4% to 45.5 million and their value increase by 74.9% to Rs106 million, according to the SBP.
The research states that as of June 2022, there were 15 million registered P2P Raast users, who made 7.9 million transactions worth a total of Rs102.1 billion.
A total of 32,958 point-of-sale (POS) devices were installed throughout the nation during FY22, which caused its network to grow by 45.8% to 104,865.
During this time, the number of online retailers who registered with banks increased from 3,003 to 4,887. According to the report, the country’s ATM network increased by 4.8% over the course of the year to a total of 17,133 ATMs.
The overall number of POS transactions, 137.5 million, increased by 54.5% over the previous fiscal year, and the value of those transactions, which hit Rs0.7 trillion, increased by 56.1%.
ATMs processed 692.3 million transactions in total, amounting to Rs9.6 trillion, a 19.2% increase from FY21.
In FY22, there were 42.4 million payment cards in use, of which 30.16 million were debit cards, 71.1% were credit cards (1.79 million were credit cards), 24.3% were social welfare cards, and 4.2% were pre-paid cards that could only be used at ATMs.
By FY22, there were 4.37 million high-value transactions processed through Pakistan’s Real-Time Gross Settlement (RTGS) system, totaling Rs681.6 trillion, an increase in value of 53.3% annually.
The research reveals that despite efforts by Pakistan’s central bank to reduce the volume of cash-based transactions, it only decreased by 1%. However, the amount increased to Rs190.4 trillion, nearly 25.6% more than the previous year.
Conclusion
In conclusion, the development of mobile banking has had a significant impact on Pakistan’s telecom sector, posing both opportunities and difficulties. Mobile banking has had a significant impact on the business in a number of areas, including the rise in demand for mobile data services, the requirement for secure and dependable networks, and the possibility for financial inclusion. As the trend advances, it is expected that telecommunications firms who can successfully take advantage of these chances will reap major rewards, aiding in the overall development of the nation. However, in order to ensure that everyone can benefit from mobile banking, regardless of their location or financial situation, it is also crucial to address the issues presented by increased competition and the requirement for network infrastructure investment.
