Pakistan Plans to Bring Millions More Citizens into the Economy by Digitizing Payments
Government of Pakistan joins the United Nations' Better Than Cash Alliance to create inclusive economic growth and a more efficient market structure
NEW YORK, Sept. 22, 2015 /PRNewswire/ -- The Government of Pakistan announced it will continue to move toward a more digital financial economy by joining the United Nations-based Better Than Cash Alliance. This is paving the way to greater financial inclusion for millions of its citizens and inclusive growth for its economy.
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Pakistan's announcement comes just as new Sustainable Development Goals will be launched by world leaders at the United Nations in next week, drawing a spotlight on the role of digital financial services in achieving broad economic growth and individual financial empowerment.
Pakistan is fully aware that digital financial services, driven by digital payments, can help poor people save for the future, provide for their family's health and children's education, or invest in a business. In 2015, formal financial access in Pakistan is 23% and adult banked population has increased to 16%. By joining the Better Than Cash Alliance, the government of Pakistan is taking clear positive action to further leverage new technologies to expand financial inclusion.
"Digital payments are a critical and practical step that help advance and achieve our financial inclusion goals for our citizens," said Federal Finance Minister Senator Ishaq Dar, "Our vision for sustainable economic growth is to ensure all citizens have access to fair and dignified financial services. This will create more opportunities of doing business and economically empower everyone in Pakistan." In May 2015, Minister Dar launched Pakistan's first ever national financial inclusion strategy (NFIS) in partnership with the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) offering a national vision for universal financial inclusion in Pakistan.
Better digital payments systems will also help the government overcome some of its hurdles of making payments and distributing social benefits in a cash-dominant economy. Cash payments incur significant costs associated with manual record keeping, security, and transportation. In other parts of the world, digitizing government payments has brought many benefits and cost savings. For example, when the Government of Mexico digitized and centralized payments, the cost to distribute wages, pensions, and social welfare dropped by nearly US$1.27 billion.
Pakistan is eagerly bringing its current social welfare initiatives under the digitized payment systems and would continue to use digital systems for forthcoming flagship social sector programs. Through the Better Than Cash Alliance, the government will be able to collaborate with other governments and gain the support in overcoming the complex technical, logistical, and regulatory challenges in strengthening its e-governance framework and making digital payments more widely at affordable cost.
"Pakistan is taking an important step forward in building a digital economy that can serve all of its people," said Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance. "Digitizing payments is a key step to advancing government strategies related to health, education, agriculture and women's empowerment in Pakistan and to achieving the proposed global Sustainable Development Goals. We look forward to our partnership with the government of Pakistan as they build on their success."
About Better Than Cash Alliance
The Better Than Cash Alliance is a partnership of governments, companies, and international organizations that accelerate the transition from cash to digital payments in order to reduce poverty and drive inclusive growth. The United Nations Capital Development Fund serves as the secretariat.To learn more, visit www.betterthancash.org, follow @BetterThan_Cash and subscribe for news.
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