Digital Payments Trends in Pakistan 2026: What Merchants Should Watch

In fiscal year 2025, retail payments in Pakistan reached 9.1 billion transactions worth PKR 612 trillion. Digital channels processed 88% of these transactions by volume, according to the State Bank of Pakistan. 

Overall Retail Payments in FY25 (July 2024 – June 2025)

• Total retail payments reached 9.1 billion transactions worth PKR 612 trillion.
• Digital channels handled 88% of transactions by volume (up from 85% in FY24 and 78% in FY23).
• Mobile banking apps processed over 6.2 billion transactions (52% year-on-year increase).
• Internet banking handled 297 million transactions (33% year-on-year increase).
• E-money wallets showed the fastest growth, with both volume and value doubling year-on-year.

Progress in Q1 FY26 (July–September 2025)

• Total retail payments: 2.8 billion transactions (10% increase from the previous quarter), worth PKR 166 trillion (6% increase).
• Digital payment channels accounted for 2.5 billion transactions (about 90% of retail payments by volume) with a value of PKR 55 trillion.
• Mobile apps led digital payments with 2.0 billion transactions (81% of digital payments), worth PKR 33.7 trillion.

Raast Instant Payment System in Q1 FY26

• Total Raast transactions: 544 million worth PKR 12.8 trillion.
• Person-to-Person (P2P) transfers: 535 million (31% increase), worth PKR 11.3 trillion.
• Person-to-Merchant (P2M) payments: 4.3 million (doubled from the previous quarter), worth PKR 17.0 billion.
• Over 1.1 million merchants onboarded for Raast P2M.

Government Plans and Future Targets

• All public/government payments to shift to digital channels (including Raast) by June 2026.
• Overall targets include doubling annual digital transaction volumes beyond current levels.
• Strong focus on higher financial inclusion through these initiatives.

Government plans include routing all public payments through digital means, including Raast, by June 2026. Targets aim to double annual digital transactions beyond current levels and push financial inclusion higher.

Merchants face a clear requirement to adapt payment methods that match customer habits. Those who implement suitable tools stand to improve conversion rates, reduce risks, and maintain steady cash flow.

Mobile and Instant Payments Take Center Stage

Mobile apps remain the primary channel for digital payments. In Q1 FY26, they processed 2.0 billion transactions. Users of branchless banking apps reached 88 million, bank mobile apps 25.9 million, and EMI wallets 6.3 million.

Raast supports instant, low-cost transfers. P2P use surged, while P2M adoption grows through QR codes and aliases. Government subsidies for Raast P2M QR payments encourage merchant participation.

For merchants, this means more customers expect instant settlements and wallet-based options like JazzCash or EasyPaisa. Acceptance of these methods lowers costs compared to traditional cards and speeds up fund access.

Payment gateways that integrate Raast, wallets, and bank transfers allow merchants to accept payments that customers prefer without added complexity.

QR Codes and Contactless Payments Expand Quickly

QR-enabled merchants more than doubled to over 1.1 million by the end of FY25, with further growth in Q1 FY26 to around 1.17 million. POS terminals reached 220,532, supporting 1.5 million daily card transactions on average.

In-store and online payments shift toward QR for retail and SMEs. E-commerce favors account and wallet channels at 93–94% of transactions.

By 2026, QR use will increase in physical stores, aided by government initiatives and subsidies. Merchants gain from lower cash-handling costs, better transaction records, and reduced risks.

On-site checkout options allow customers to complete purchases without leaving the merchant’s page, reducing abandonment. Solutions such as XPay by PostEx that enable embedded checkout experiences have demonstrated up to a 35% improvement in completion rates in certain cases.

Security and Fraud Controls Become Essential

Higher transaction volumes bring greater fraud attempts. PCI-DSS compliance protects card data. Tokenization secures repeat payments and subscriptions. Real-time detection tools monitor risks.

Merchants must select providers with strong protections. Features such as tokenization, dynamic routing for better success, and fraud monitoring (e.g., checks on email, phone, IP) reduce chargebacks and losses.

Gateways that are compliant with PCI-DSS and equipped with built-in fraud prevention tools help maintain customer trust while reducing dispute-related costs. As a payment gateway, XPay by PostEx offers these capabilities, enabling merchants to process transactions securely while minimizing fraud risk and chargeback fees.

E-commerce Continues Strong Growth with Unified Payment Solutions

E-commerce in Pakistan continues to experience strong growth, with digital payments increasingly driven by mobile wallets and account-based transactions. Market projections suggest the sector will reach US$14 billion or more by 2025, with further expansion expected as smartphone penetration rises and younger consumers adopt online shopping.

To keep pace with this growth, merchants require payment solutions that integrate seamlessly with platforms such as Shopify and WooCommerce. Support for diverse payment methods,  including cards, wallets, bank transfers, Google Pay, Raast, and Cash on Delivery (COD), is essential to match evolving customer preferences.

As a payment gateway, XPay by PostEx addresses these needs through a single unified API that enables merchants to accept multiple payment methods within one integration. The platform also supports smarter payment routing. This unified approach simplifies operations, enhances checkout performance, and allows businesses to scale efficiently as Pakistan’s e-commerce ecosystem expands.

Prepare for Personalization, Speed, and Broader Inclusion

Interoperability across systems allows seamless transfers. AI aids in fraud prediction and personalized offers from banks. Hybrid models persist as cash remains in some areas, but digital inclusion targets aim for higher adult participation by 2030.

Merchants benefit from tools that support recurring billing, automatic retries, and payment links for flexible collection.

In 2026, merchants who align with these shifts, mobile dominance, Raast integration, QR acceptance, strong security, and multi-method support, position their businesses for higher conversions and reliability.

Turn Payment Trends into Revenue with XPay

XPay by PostEx provides a payment gateway built for Pakistan. It offers on-site checkout to keep customers on your page, which boosts success rates by up to 35%. Features include PCI-DSS compliance, tokenization, Fraud Shield for real-time fraud checks, dynamic routing for optimal processing, and support for cards, wallets, bank transfers, Google Pay, Raast, and more. Integration takes about 30 minutes, with APIs and docs suited for developers. 

Merchants ready to handle 2026 trends can start with XPay. Visit https://xpay.postexglobal.com/ to set up, view demos, or integrate now.