Key Takeaways
- State Bank of Pakistan proposes making PayPak cards mandatory for government employees and social safety net programmes.
- Proposals include tax incentives, cashback offers and discounts on utility bills and public transport.
- Initiatives aim to reduce reliance on international payment networks like Visa and Mastercard.
The State Bank of Pakistan (SBP) has proposed making PayPak cards mandatory for government employees' salary accounts, social safety net programmes, and other public sector payments. This move is part of a broader strategy to reduce Pakistan’s dependence on international payment networks such as Visa and Mastercard.
To accelerate the adoption of domestic payment schemes, 1LINK, the company behind PayPak, has proposed tax incentives for Point-of-Sale (PoS) and e-commerce transactions made through PayPak cards. These incentives include cashback offers, discounts, and loyalty rewards on utility bill payments, fuel purchases, public transport, and other government-related transactions.
The SBP’s strategy also involves installing PoS terminals capable of accepting PayPak cards at all public-facing government service centres, including NADRA offices, passport offices, and excise departments. This initiative aims to increase the number of merchants who accept domestic payment methods.
According to the SBP, recent initiatives include the introduction of co-badged PayPak cards that support both domestic and international transactions, expansion of PayPak acceptance for e-commerce, promotional campaigns, and incentives to improve merchant acceptance and transaction volumes. The central bank also highlighted the rapid growth of Raast Person-to-Merchant (P2M) payments.
In FY2025-26, the government allocated Rs. 3.5 billion for a Raast QR-code subsidy programme, which helped daily P2M transactions increase from around 60,000 in June 2025 to approximately 1.1 million by June 2026.
PayPak is Pakistan’s first domestic payment card scheme, launched by 1LINK in 2016 under the guidance of the State Bank of Pakistan. The system was developed to provide a locally operated alternative to international card networks, lower transaction costs, improve financial inclusion, and strengthen the country’s digital payment infrastructure.
In recent years, the SBP has expanded the ecosystem through co-badged PayPak cards and closer integration with Raast as part of its national digital payments strategy. These efforts are aimed at creating a robust domestic payment system that can support various government and private sector transactions.
