Raast: Pakistan’s first instant payment system

Web Desk — The State Bank of Pakistan has introduced Raast – Pakistan’s first instant payment system that will enable end-to-end digital payments among individuals, businesses and government entities instantaneously.

The state-of-the-art Pakistan’s Faster Payment System will be used to settle small-value retail payments in real-time while at the same time providing a cheap and universal access to all players in the financial industry including commercial banks, microfinance banks, government entities, and fintechs (EMIs & PSPs).

Pakistan has had low electronic transactions for a number of reasons including low banking penetration, lack of trust and awareness of digital payment methods, limited interoperability, difficult accessibility, and high cost of transactions.

The Real-Time Gross Settlement System (RTGS) of Pakistan provides instant payment settlements for large value and corporate transactions only.

Raast: Pakistan’s Instant Payment System will facilitate retail payment settlements with great efficiency.

Raast aims to address some key industry challenges within the payment ecosystem:

Limited interoperability: Financial institutions (i.e. the providers of digital payment services) have difficulty connecting to each other due to a lack of necessary central infrastructure.

High cost of digital payments to the end-user: End users are charged high fees for transferring money digitally, making digital payments inaccessible for a large portion of the population.

Poor user experience: End-users must go through a complex process to make digital payments and there are no digital modes of payment that are widely accepted by merchants.

Lack of security: Currently available digital payment types and infrastructure do not offer sufficient/adequate data protection and authentication.

Features of Raast:

Instantaneous payments: Near real-time digital payments across individuals, merchants, businesses, and government entities

Low-to-no transaction costs for end-users: Raast is designed to operate at a cost-recovery model in order to make digital payments affordable to end-users of all socio-economic backgrounds

Full sector-wide interoperability: Raast will allow all financial institutions to seamlessly connect to each other via a single link to the central infrastructure, making digital payments accessible across any channel to customers of any financial institution

Customer-centric innovative products/services: Raast will be built on cutting-edge technological standards, allowing financial institutions to develop innovative and user-friendly digital payment products and services (e.g. payment through phone number as RAAST ID).

Reliability and enhanced security: RAAST uses more secure payment types, ensures that each transaction is authorized by the payer, and offers enhanced data protection and fraud detection services.