Pakistan has announced a new instant digital payment system in collaboration with Bill Gates to boost financial inclusion and government revenue in the country.
The new system, called “Raast” or “direct way”, will be rolled out in three phases culminating in 2022. Officials from the State Bank of Pakistan announced said on Monday.
The instant digital payment system is developed through a multi-year collaboration between the State Bank of Pakistan and the Bill & Melinda Gates Foundation. The World Bank, Britain, and the United Nations are also supporting it. One goal for Raast is to boost involvement of women in the formal economy.
Several private-sector digital cash transfer systems that do not require a bank account. Jazzcash operated by telecommunications company Jazz and Easypaisa operated by telecommunications company Telenor Pakistan, are available in Pakistan. But Raast would be the first to link government entities and financial institutions.
“I hope that in years to come we will look back and see this new digital public good as an important contribution to our shared goal of giving all people the tools they need to lift themselves out of poverty,” Bill Gates said in a statement on Monday.
How Raast will work?
Merchants, businesses, individuals, and government entities will be able to send and receive payments through the internet, mobile phones, and agents. Government payments, including salaries and pensions, will also be made through Raast. Meanwhile, payments for nationwide financial support programmes, such as the Benazir Income Support Programme, and the Ehsaas Emergency Cash programme.
Pakistan’s ability to curb illegal financial transactions has been under scrutiny from the Financial Action Task Force (FATF).
Prime Minister Imran Khan‘s government has taken steps to automate the collection of taxes on transactions. It has also tightened rules on banking, said shifting away from a cash-based economy and tackling corruption were the chief motivations behind Raast.
“Pakistan collects about the least amount of tax in the world,” PM said. “We cannot build infrastructure, we cannot work on human development, or educate children, or improve hospitals.”
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