Capital going cashless | The Express Tribune

The government’s decision to make Islamabad Pakistan’s first fully cashless city by December 31 is a bold move that suggests either extensive planning or a complete lack of a plan. Starting from November 30, no cash will be accepted at Islamabad Capital Territory or Capital Development Authority departments, and all merchants – from street vendors to business centres – are expected to join digital payment networks, with the priority being on Raast. Some 26,000 merchants are already connected, and nationwide active digital merchants have risen fourfold to 2.03 million, with Raast QR codes printed on more than 45 million utility bills.

The government hopes that widespread adoption would help steer the country towards a situation where it can fend off aggression, but success would require many other pieces to fall into place. Notably, despite significant recent improvements, Pakistan remains one of the region’s most cash-reliant economies, with cash in circulation at roughly 34% of GDP – more than double the figures for India and Bangladesh – and about Rs11.5 trillion is outside the formal banking system. Only 27% of adults have bank accounts, and just 9% of women made or received a digital payment in the past year. QR codes at every stall do nothing for customers who have no smartphone, no connectivity or no trust in technology.

Connectivity is where the biggest problem lies. Pakistan ranks among the lowest 12% globally for mobile and broadband speeds, and average speeds actually fell 40% in 2024. Internet access is still quite low, at around 33%. Islamabad’s pilot cashless Sunday bazaar has not inspired much confidence, as it has been plagued by weak signals and patchy connections, with vendors often stepping outside to find reception. Pakistan’s burgeoning reputation as a scammers’ paradise will also not help earn consumers’ or vendors’ confidence.

Going cashless is a worthwhile goal, but there is no easy route to the destination. Instead of a ridiculously short deadline, the government should first ensure that reliable connectivity, affordable devices, merchant incentives and strong fraud protection are introduced to increase adoption.