Prime Minister Imran Khan launched an instant payment system Raast recently and people started talking about it. But what it is? And how it will help Imran Khan’s vision of Digital Pakistan.
Let’s learn in this blog.
In 2018, Imran Khan introduced digital policies with the aim to develop an ecosystem that can prove to be a way forward for the IT industry of Pakistan. Raast payment system is a milestone in achieving it.
Launched on 11th January 2021, Raast is Pakistan’s first instant payment system that will allow government entities, businesses, and individuals to make end-to-end digital payments. By digitizing the payment structure through Raast program the government is optimistic about the higher tax revenues as Raast will make millions of people a part of the formal economy.
Digital economies are the future and the countries who fail to be a part of this bandwagon will struggle to compete in the modern world. Raast will help Pakistan reach its potential.
#RaastbySBP is a significant step for Pakistan towards realizing its full potential and improving #financialinclusion: PM @ImranKhanPTI | For details on Raast: https://t.co/oH46FzczwP | To watch full program: https://t.co/10bvUhSIXB pic.twitter.com/RzmCugT4JO
— SBP (@StateBank_Pak) January 20, 2021
What is Raast?
Raast is an urdu word extracted from “Raah e Raast” which means direct. Similar to its meaning the payment system will let people receive direct payment on their mobiles. It will process the payment within seconds.
Although Pakistan has a few private online cash payment platforms like Easypaisa, and JazzCash but Raast will be the first payment program launched by the State Bank of Pakistan with Karandaaz.
Through Raast program, anyone who wants to transfer payments will be able to do it over the internet and in just a few seconds. It’s a way to introduce digital advancements among the poor and underprivileged.
If we want to achieve the digital economy we have to include the lower class into the formal economy and Raast aims to do just that.
Also, only 50% population in Pakistan is availing financial services out of which only 18% are women. Most underprivileged and poor women aren’t directly participating in the national economy. Raast program will make these women a part of the digital economy. The step will be beneficial for the country because it will increase financial inclusion.
What Features will Raast Program have?
• Instant money transfer: People won’t have to wait for two or three business days for their payments to be processed.
• Cost-effective: When we transfer money via banks, a small amount is deducted from the full payment as a transaction fee but with Raast, the transaction cost is going to be very low.
• Accessible: People won’t have to stand in the queue to make their transactions. Raast will be available 24/7 and people can make payments from the comfort of their homes.
• Easy to Use: People won’t need to remember their account numbers because the payments will be made through mobile and CNIC. Person to person payments via mobile numbers will be digitized by SBP by July 2021.
• Ensure Safety: Raast will give a number of choices to secure your payments and the payment channel as well.
• Compatible: Raast will make all the governmental payments digital such as all the pensions, and salaries will process through it. Also, the payments of Ehsaas program and Benazir income support program will be provided to the deserving through Raast. By 2022, customers will be able to pay merchants through Raast and the need for cash will be limited.
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What Challenges will be faced by Raast Program?
- As it is a new initiative and is aiming to work on a national level so it will definitely take some time to come into play and making it accessible in one-go will be a tough task. That’s why Raast will be divided into multiple phases and it will complete its work by 2022.
- Making people aware of this program will be a hassle for the government because the lack of awareness among the poor and underprivileged is really high. The government should initiate reach out programs through which volunteers can personally go and inform people about the benefits of Raast. Also, commercial campaigns would be helpful. Social media could also be used to the government’s advantage.
- Even after creating awareness among people about the program, there will be a large population who would not be in favor of the digital economy and might impose the initiative. For this issue government would again have to reach the grass-root level where they can explain the benefits of using Raast and how it can positively impact the development of Pakistan. The government’s job would be to make people realize how important this program is for the country and their own personal growth.
- Preparing Merchants for digitization can also be a challenging task. Raast will allow customers to pay their bills to the merchants. This might not go down well with the merchants because the centuries-long traditional way of cash payment is so deep-rooted that it will need a lot of time and effort to overcome. Again the government will have to work with the merchants to gain their trust and confidence by providing the required information properly in order to bring them on-board.
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If all things go in favour of the government, the initiative will boost the vision of Digital Pakistan. The cashless economy will also help in eradicating corruption. And not to forget the mundane work which can be cut off through this instant payment system.
Perhaps, a great initiative to develop Pakistan.
I am a Netflix buff who is an economist by degree and writer by passion and keep exploring things on the side.