KARACHI: The Pakistan Airports Authority (PAA) is introducing a cashless model at airports across the country, under which only digital service providers approved by the central bank will be able to provide services to customers, the PAA said on Monday, amid Islamabad’s push for digitization to transform the economy.
Pakistan is a cash-dominated market where a significant portion of transactions, particularly in the informal sector, are conducted in cash. Officials say many of these transactions are aimed at avoiding taxes.
In recent years, the State Bank of Pakistan (SBP) has taken steps to ensure a transition toward a more cashless economy so that transactions are more traceable, reducing chances of tax evasion and corruption.
In a statement on Monday, the PAA said businesses and institutions at Pakistani airports will have to adopt the SBP-licensed digital system and those failing to do so will be liable to fines.
“This move will help in facilitating convenience, transparent transactions, and promoting a modern financial system for passengers,” it said. “Passengers will be able to pay in cash as well as adopt the new system, however, they are encouraged to adopt digital payment methods.”
The government in Pakistan, a country of over 240 million people, has long identified digitization as a key tool to improve governance, reduce corruption and expand the country’s narrow tax base.
The South Asian country is also developing digital identities of all its citizens to enable secure and efficient payments, Pakistani state media reported in August.
In July, Pakistan launched the Merchant Onboarding Framework that requires banks and payment providers to equip all merchants with the government’s Raast payment system-enabled digital tools such as QR codes and PoS [Point of Sale] systems.
