A private bank has partnered with a global internet service provider to promote digital payment.
Raqami Islamic Digital Bank (RIDB) and Euronet Pakistan have signed an agreement in this regard, according to a press release.
In September last year, the State Bank of Pakistan (SBP) granted licenses to four banks including Raqami to establish an Islamic digital retail bank.
Raqami is developing its operational readiness for the pilot, followed by a commercial launch as a digital retail bank, the press release added.
Euronet Pakistan is a division of Euronet Worldwide and a leading firm in processing secure electronic financial transactions. Euronet Pakistan will provide services such as payment switches, card management solutions, credit cards, ATM controllers, POS/E-commerce acquiring, fraud management solutions, and card tokenization.
Procuring a payment system by a bank is a strategic process aimed at selecting and implementing a technology platform that facilitates a range of payment services for the bank’s customers, covering a wide range of financial transactions, including fund transfers, bill payments, card processing, acquiring, and more.
To have a robust, integrated, scalable, and cloud-ready middleware platform Raqami will leverage Euronet’s system for integration between payment systems, core banking systems, non-core applications, and digital channels. The move aims to build operational efficiency, reduce costs, improve service availability, and ensure a seamless digital banking experience for Raqami’s customers.
Kashif Gaya CEO of Euronet Pakistan commented: “We are excited to be selected by Raqami as their technology partner for card issuance, fraud management, and transaction processing, and play a pivotal role in the launch of the first Islamic Digital Bank in Pakistan.
This partnership would help enhance the bank’s scalability and agility, focus on business value, and deliver new card products and payment services.
Umair Aijaz CEO of RIDB stated “In the current era of industry-wide digitization, a well-designed payment hub is not just a tool; it’s a prerequisite for innovation, inclusion, and economic empowerment. The SBP’s systematic additions and enhancements to the digital ecosystem in the country are yielding undeniable dividends for Pakistan, as evidenced by the declining cash in circulation from Rs9,149 billion in June 2023 to Rs8,288 billion in the quarter ending September 30, 2023.
As Raqami prepares to launch as Pakistan’s first Islamic digital retail bank, we are committed to playing our part in this evolution. This exclusive agreement between Raqami and Euronet is a key partnership that will help set the foundation for the country’s first Islamic digital bank.”
Nadeem Hussain, Coach RIDB noted, “As part of a concerted drive by the Government of Pakistan to increase the availability and uptake of digital financial services in the country, the SBP has been spearheading numerous efforts.
The latest quarterly payment systems review Report shows remarkable progress, with digital transactions accounting for an estimated 80% of total retail transactions processed by banks, MFBs, and EMIs, with only 20% accounted for by over-the-counter (OTC) transactions. Similarly, the total number of ATMs now exceeds 18,000 while POS machines have increased to over 100,000.
RIDB is one of five aspirants for the digital retail bank licence, which is to be awarded by the SBP after achieving operational readiness and successfully concluding a pilot phase.