How Raast facilitates cross border digital payments
State Bank of Pakistan Governor Jameel Ahmed recently announced that Pakistan has reached a significant milestone by enabling cross-border payments in Pakistani rupees between Pakistan and Arab countries. This has been achieved by integrating the country’s Raast instant payment system with the Buna platform of the Arab Monetary Fund.
Moreover, Pakistan’s central bank is working towards allowing e-wallet holders in the country to make direct payments in China via online banking, as part of its broader initiative to enhance regional financial connectivity and promote digitalization.
The SBP also unveiled plans to launch the third National Financial Inclusion Strategy (NFIS) 2028 during the fiscal year 2024-25. This strategy aims to expand banking services to 75% of the adult population, up from the current 60%, with the goal that by 2028, 25% of these users will be women.
Raast is Pakistan’s first instant payment platform which enables end-to-end digital payments between individuals, businesses and government entities. This is a payment gateway developed by State Bank of Pakistan (SBP). It enables the real-time transfer of money without any transaction fees. – Bank of Punjab
How is Government using Raast
Presenting the Governor’s Annual Report for 2023-24 to parliament, Jameel Ahmed highlighted that, “In terms of cross-border digital financial integration, the SBP signed an MoU to integrate Raast with the Arab Monetary Fund’s Buna, marking a major achievement by including the Pakistani rupee as a settlement currency.”
He also mentioned that the SBP approved a partnership between Pakistani and Chinese financial service firms, enabling e-wallet users in Pakistan to make payments in China. This move is expected to support e-commerce and small-ticket purchases from China, within predefined annual limits.
Following the successful conclusion of the NFIS 2018-2023 in December, the SBP is preparing to launch NFIS 2024-28 to address ongoing challenges in digital financial inclusion. NFIS 2028 will leverage digital technologies to enhance access to and the quality of financial services.
What is Cross Country Payment in relevance to Raast
At the core of cross-country payments is the process of converting one currency into another. When an individual or business in one country needs to send money to another country, the currency they hold (e.g., U.S. dollars) must often be exchanged for the currency used in the recipient’s country (e.g., euros or yen). This conversion is typically handled by banks, financial institutions, or online payment platforms, which charge fees for currency exchange and the transaction itself.
Despite advancements in technology, several challenges still complicate cross-country payments. High Fees are a common issue, especially with traditional banking systems where each intermediary adds to the total cost. Exchange Rates can also fluctuate, impacting the amount the recipient ultimately receives. Additionally, transaction times can vary significantly depending on the method used, ranging from instant digital transfers to multi-day bank processing.
Cross-country payments are essential for global commerce and personal remittances. With various methods available—ranging from traditional bank transfers to cutting-edge cryptocurrency transactions—individuals and businesses have numerous options for moving money across borders. While challenges like fees and regulatory hurdles remain, innovations in technology are steadily improving the efficiency and accessibility of international payments.
Read more about Cross Country Payments and How They Work
Original Article: Tribune
