State Bank of Pakistan is anticipated to introduce a QR code system under Raast instant payment service to buy sacrificial animals during Eid al-Adha. Deputy Director of State Bank Ahmed Sameer stated at the 17th Mobile Commerce 2024 conference that the QR system will likely be introduced this Eid ul Adha. He also highlighted the importance of this new project for livestock breeders and sellers. For more information, you can read about how SBP Launches an Online Payment System for Merchants on Raast.

He added that this project aims to help traders and people transact securely to purchase sacrificial animals. Additionally, digital banking assists banks in handling livestock purchases worth 550 to 600 billion rupees during this annual religious festival. In this thorough blog, our Tashheer research team outlines how the State Bank of Pakistan is making it easier to buy animals for Eid using QR codes.

Context and Background

Eid-ul-Adha, also known as Festival of Sacrifice, is one of the two blessed Eid religious holidays for Muslims worldwide. One of the core rituals involves the sacrifice of an animal, typically a goat, sheep, cow, or camel, symbolizing Prophet Ibrahim’s willingness to sacrifice his son as an act of obedience to God’s command. Traditionally, individuals purchase animals from breeders and sellers, often involving cash transactions. State Bank of Pakistan is expected to launch a QR code method through its Raast instant payment service to purchase sacrificial animals during Eid al-Adha.

Additionally, Radio Pakistan reported that the Punjab government has launched an online portal for purchasing sacrificial animals for Eid ul Azha. The portal provides listings of the available animals, including their age, pictures, weight, breed, species, and price.

Details of the QR Code System

Deputy Director claimed that using QR codes for payments will significantly change the payment process, as the costs associated with installing point-of-sale (POS) machines present their challenges. QR payment system also encouraged small-scale traders to accept online payments, reducing reliance on cash in the economy. Traders can now easily install QR codes to receive online payments instantly. Another initiative has been taken by the Punjab Government for the launch of a helpline and online portal for sacrificial animal purchases. For more information, you can read about how Punjab Government Launched Helpline and Online Portal for Sacrificial Animal Purchases

Implementation Plan

This new QR code system will be implemented in 15 cities, including Karachi, Islamabad, Rawalpindi, Lahore, Faisalabad, and Hyderabad, where State Bank offices are present. He also informed, “Currently, we are working with 25 banks and select 50 major cattle markets to enable QR code payment method there.” Additionally, instant settlements through Raast system ensure they receive their payments immediately. Plus, the system promotes financial inclusion by encouraging use of digital banking services among cattle farmers.

Impact on Digital Banking in Pakistan

Yahya Khan, Chief Digital Banking Officer of the Digital Banking Group at Bank Alfalah Limited, said that around 8 to 10 trillion rupees in cash circulate in Pakistan which is a high ratio compared to GDP and cash.  Meanwhile, Pakistan’s Finance Minister, Muhammad Aurangzeb, suggested discontinuing the 5000 rupee note. Central banks should replace big denomination notes with Rs. 1,000 note through digital banking.

Mashreq Bank CEO Mohammad Humayun Sajjad said that a digital bank’s lower operating costs, reduction in physical branches, and promotion of digital banking would promote it and offer higher profit margins to depositors for mobile financing. Learn more about Can Banking Apps Strike the Right Balance Between Security and Convenience?

Challenges and Solutions

There are two main challenges that affect this imitative in Pakistan are digital literacy gap and technological barriers in some rural areas. To address this, awareness campaigns can be conducted to educate cattle sellers and buyers about using QR code system. Additionally, collaborations with local NGOs and volunteers can be established to provide on-site assistance during Eid ul-Azha.

Future Prospects

Although QR code payment systems have been known in Pakistan for some time but their non-interoperability limits their utility. Recently, Raast introduced an interoperable QR code, allowing individuals to make payments between different banks through mobile banking. The QR code system for Eid ul Adha’s animal purchases has profitable future possibilities. As more individuals adopt digitalization in Pakistan, the system is expected to evolve and expand, potentially containing other aspects of the livestock industry. It could also serve as a model for many projects in major sectors of Pakistan’s economy.

Final Note

The one-day conference also featured two-panel discussions including the role of Digital Banks in Pakistan and the Person to Merchant (P2M) use case of Pakistan’s instant payment system Raast-A game changer in the digital ecosystem. Using QR codes to digitalize Eid ul Adha animal purchases is a big step of Pakistani banking system towards advancement. In this thorough blog, our Tashheer research team has outlined how the State Bank of Pakistan is making it easier to buy animals for Eid using QR codes. Today, they are working with 25 banks and selected 50 major cattle markets to authorize QR code payment methods in Pakistan.