E-Banking is not something new to Pakistan. It was in 1987 when first ever ATM was installed in the country.

Even till late 1990s, ATM growth and issuance of cards remained very low. The real growth in ATMs and cards
issuance were seen after the formation of national switches in 1999 and then accelerated with SBP's circular in
2002 mandating the banks to issue cards to their accountholders and connect to either of the 2 switches (1Link
and MNET).
State Bank of Pakistan played a key role in the e-banking growth by providing enabling environment. With efforts
of SBP as a regulator, it paved way for banks to issue cards to its customers and give access to bank accounts
over ATMs by integrating the bank with 1LINK or MNET. SBP later mandated in 2006 the two networks to interconnect, which made it possible for any cardholder of any bank to take cash out from any ATM of any bank
across Pakistan. SBP has continued to bring out regulations to improve the quality of service delivered through
the e-banking channels and ensure that the customers' service is not compromised.
With the growth of economy, the financial transactions increased in great numbers and it was felt to extract more
benefits from the switching network. This led to some innovative solutions that made banking easier, faster, costeffective and reliable for everyone. 1LINK took the initiative to offer card scheme services such as Visa and
UnionPay that increased plastic cards acceptability outside of Pakistan. IBFT (InterBank Funds Transfer) and
UBPS (Utility Bills Payment Solution) made it easy to rapidly transfer funds to other accounts and pay utility bills
from any of the alternate delivery channels previously restricted to branches only. This growth soon led to the
need for branchless banking.
Branchless banking has experienced significant growth in the past few years. Mobile banking in particular has
greatly mapped the unbanked population of Pakistan. One such example is EasyPaisa launched by Telenor in
collaboration with Tameer Micro Finance Bank providing instant money transfer, local remittance through its huge
agent network and cell phones. UPayments is another mobile banking platform set-up by Ufone that enables
banked customers to securely perform transactions via USSD. Similarly Internet Banking channel adoption is fast
catching up and is now offered by almost all the banks in Pakistan.
The E-Banking industry is much different from what it was a decade ago. According to State Bank of Pakistan's
quarterly review of fiscal year 2013, by second quarter the industry had:
-- 6,232 ATMs all over Pakistan
-- 9,896 Real-Time Online Branches (RTOBs) out of 10,523 ie 94%
-- 20.72 million plastic cards issued in the country
-- 79.45 million overall E-Banking transactions
-- Rs 7.6 trillion value of transactions
To understand the growth of E-Banking industry in Pakistan one has to look at the change of numbers over the
years in the infrastructure. In June 2006 there were 3,555 RTOBs, 1,612 ATMs and 32,331 POS that increased
to 9,896 RTOBs, 6,232 ATMs and 34,724 POS by December 2012. Similarly there has been growth in various
segments of E-Banking infrastructure as shown in the graph (source: State Bank).
The infrastructure laid down by national switches has proved to be of immense help to the economy. It not only
energised the financial sector but common Pakistani found it easy to perform banking activities even after
banking hours. The same infrastructure proved crucial to the country in times of need and TPS played pivotal role
as technology backbone.
One such instance is when floods hit northern areas of Pakistan and travelled all the way down to Sindh
province; a significant population was displaced that needed support. When international donations began to
pour into Pakistan, the existing infrastructure was utilized to issue Watan cards (Visa Debit cards) by UBL and
other banks to financially support the IDPs in collaboration with NADRA. The IDPs were registered using
biometrics and NIC numbers and each family was given a Watan card where donation was directly deposited
through banks. The whole process of registration took 13 minutes and funds were transparently made available
to the IDPs. By the end of 2012, NADRA had issued 966,619 Watan cards to more than 1.1 million families,

distributing Rs 37.896 billion.

Similar concept was implemented for Benazir Income Support Program to issue BISP cards to eligible families for
poverty alleviations, providing Rs 1,000 per month on quarterly basis. There are currently 1.5 million beneficiaries
of BISP program in the rural areas of the country that regularly receive funds through this mechanism.
E-Banking has simplified lives of a common man in the country. With the popularity of e-banking among the
accountholders, electronic channels are preferred over brick and mortar branches for regular account inquiries,
cash withdrawals and funds transfers. There is now a steady growth seen in electronic funds transfers and retail
payments. Immense growth potential is expected in Branchless Banking space which is widely believed to also
improve the economic health of Pakistan. The banks are now on the track of service innovation and value
creation for the customers through low cost service delivery which is only possible with alternate delivery
channels.
TPS philosophy is about preventing segmentation in the banking industry, helping to create innovative solutions
and encourage further growth in the financial sector. The infrastructure has already been laid and various
methods of payments are being introduced that was unthinkable before. Currently 65% of Pakistan's population
is below the age of 25, and youth is more adaptive to technology and innovations, creating endless future
possibilities. As technology gets better, so will the financial industry.