Pakistan has inaugurated the country’s first instant digital payment system, dubbed “Raast”. This is the first endeavor by the Pakistani government to increase government income.
During a press conference, Prime Minister Imran Khan announced the effort. He called it a “major step” towards realizing Pakistan’s full potential by entirely using its 220 million inhabitants.
Speaking at the occasion, Khan stated that just 2 million individuals register their taxes. This leaves the country’s cash economy mostly untaxed, which may now be rectified thanks to this digital payment system.
He also stated that the digital payment system would cause a gradual transition away from the cash economy. This allows the government to capitalise on the country’s enormous population fully. Graana.com, Pakistan’s Smartest Property Portal, explains its exciting features in detail below.
What is Raast?
The cutting-edge system that will revolutionize the payment gateway in Pakistan. It can settle small-value retail payments in real time while giving low-cost and universal access to all financial sector participants.
This includes banks and fintech startups. This will provide a direct link between users situated anywhere in the world.
While the country has several private-sector digital currency transfer systems, such as Jazz Cash and Zong EasyPaisa, this is the first system that connects government bodies and banking institutions.
Under the comprehensive policy framework of Digital Pakistan Vision 2019, Khan noted that automated tax collection on transactions and stricter banking laws would help transform the country from a cash-based economy and combat corruption more effectively.
Aside from that, this step is intended to promote the formal economy, enhance women’s financial inclusion, and alleviate poverty in the country.
This platform would broaden the reach of the Ehsaas Program and the Benazir Income Support Program to the economically disadvantaged, particularly women. Women in rural regions can use this to create bank accounts and get financial transfers directly from the government to better their livelihoods.
The Bill & Melinda Gates Foundation’s Partnership
The new quick digital payment method, named ‘Raast’ in Urdu for ‘direct or straight’, will give a direct path to attracting more Pakistanis into the digital economic net.
The State Bank of Pakistan and the Bill & Melinda Gates Foundation have been working together for several years on this initiative, unveiled as part of the Digital Pakistan Vision. The World Bank, the United Kingdom, and the United Nations have all provided support.
Pakistan Required Significant Infrastructure
The State Bank of Pakistan (SBP), will implement the framework in three stages till early 2022. Before starting, the SBP declared that the first stage would be to commence immediate credit of dividends from listed firms to shareholders.
In a statement, Bill Gates stated, “I hope that in years to come, this new digital public good will be seen as a significant contribution to our common aim of providing all people with the tools they need to escape poverty.”
Faster Payment System
This will provide a direct link between users situated anywhere in the world. It is the first digital currency transfer system that connects government agencies and financial institutions in Pakistan, despite other private sector systems.
According to Prime Minister Imran Khan, introducing automated tax collection and stricter banking regulations would help the transition.
Women’s Financial Inclusion
This platform will expand the reach of the Ehsaas Programme and the Benazir Income Support Programme. It will do so among economically marginalised groups, particularly women.
Women living in rural regions now have the opportunity to enhance their standard of living. They can do so by opening bank accounts and depositing any government-received payments in them.
Disbursement of Salaries and Pensions
Under a new memorandum of understanding between the central bank and the Controller General of Accounts (CGAP), the government will disburse salaries and pensions to a subset of Federal Government workers via Raast.
According to figures compiled by the government during the second quarter of 2020-2021, the transactions conducted via mobile banking exceeded PKR 1.12 trillion, representing an increase of 147% from the first quarter of 2020–2021. Furthermore, registered phone users climbed by 5% during this period.
Features of SBP’s RAAST
Below is a rundown of the most critical aspects of the Raast online payment system that customers must be aware of, as detailed on the official website of the State Bank of Pakistan.
Instant and Hassle-Free Payments
It allows real-time and instantaneous payments anywhere in the country, and they are instant and require no hassle. Individuals, merchants, business enterprises, and government agencies can easily make payments.
Low To No Transaction Costs for The Average Person.
One of the driving concepts behind the implementation of RAAST was cost-effectiveness. This digital payment system’s approach is developed so that end users may make digital payments at little or no cost.
Connectivity Without Interruption
RAAST serves as a bridge, providing a single, dependable connection between various financial institutions across the nation. The system’s centrally linked infrastructure makes digital payments available to everyone, including customers of any financial institution.
Products or Services Supported By a Customer-First Approach
Raast’s cutting-edge technological foundation has made it possible for the banking industry and other financial institutions to introduce goods and services focused on user-friendly payment processors. For example, you can now make online payments using your phone number as your RAAST ID.
Reliable and Secure
The RAAST platform from SBP guarantees that all of your online payments and transactions are secure. The payer authorises and the system verifies each financial and transaction activity on the portal to provide improved data protection and spot any fraudulent activity.
Free Funds Transfer Facility
Among so many commercial banks in Pakistan, selected banks will enable the Person-to-Person (P2P) funds transfer facility at the request of the State Bank of Pakistan (SBP) therefore enabling their users to transfer funds using the Raast App directly.
These online fund transfers will be provided without charge.
What is RAAST’s Future?
To strengthen connections, upgrade infrastructure, increase investment in digital skills, and support innovation and technical entrepreneurship, Pakistan released its Digital Pakistan Vision in 2019.
Access and Connectivity, Digital Infrastructure, e-Government, and Innovation and Entrepreneurship are the five primary areas targeted by this initiative.
It is the vision of Digital Pakistan Vision that drives Pakistan’s technological progress. This new legislation aims for economic advancement, a competitive edge, and improved access to the most vulnerable in society.
Increasing digitisation equates to enhanced accountability and operational simplification, which Pakistan aspires to achieve.
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