Micropayment Gateway

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STATE Bank of Pakistan (SBP) under the leadership of Reza Baqir has taken a very major initiative towards facilitating risk free instant transfer of funds by using the latest enabling technologies.
The central bank Tuesday signed a partnership agreement with Karandaaz, a not-for-profit company promoting access to finance for SMEs, for the implementation of micropayment gateway. Under this agreement, Karandaaz with the funding from Bill and Melinda Gates Foundation (BMGF) will support the central bank put in place this gateway, a digital payment platform based on modern technology, making real-time interoperability of smaller digital transfers possible. The micro payment gateway has successfully been implemented in several countries and we are confident that its implementation here will also create many opportunities for the people of Pakistan provided it serves the purpose of being cost effective. Queen Maxima, the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) at the signing of the micropayment gateway put forward very useful suggestions to achieve the desired results from this digital platform. She said the next steps in designing the appropriate governance structure, scheme rules, initial use cases and pricing will be critical for the platforms to succeed and to have an impact, especially for the women and the poor lot. In our country around fifty per cent of the adult population, mostly women, lack access to formal financial services. Many households resort to risky, inefficient and expensive informal channels to fulfil their financial needs. Cash is still the most preferred mode of our routine transactions. The heavy reliance on cash and limited use of digital channels reduces economic efficiency, hinders financial and economic development and impedes the process of documenting the economy. Given this scenario, we see this digital platform bringing revolution in the life of the people. With a high mobile phone penetration, Pakistan is well positioned and can expand and accelerate digital financial systems by the way of using modern tools such as micropayment gateway which we are confident will go a long way in spurring financial inclusion. It is also important for the State Bank of Pakistan to generate necessary awareness amongst the people through media about the benefits of digital payments in order to attract them to this mode.