As Pakistan braces for the upcoming federal budget, one of the more progressive proposals under consideration is a plan to encourage digital transactions as a preferred mode of payment. In a rapidly digitizing global economy, where cash is increasingly becoming obsolete and digital payments through debit and credit cards are the norm, this is a commendable and much-needed move by the government.
Across the developed and developing world, digital payments offer transparency, convenience, and accountability. Whether through cards, mobile wallets, or online platforms, these transactions help reduce cash circulation, which is often linked with undocumented financial activity and tax evasion. By promoting card-based transactions, the government aims not only to modernize the economy but also to channelize financial flows, enabling a better system of checks and balances on spending patterns—both for individuals and businesses.
However, for this initiative to bear fruit, the government must ensure that digital payment facilities are accessible to all segments of society—not just the privileged few. In Pakistan, credit cards remain largely restricted to the upper-middle and elite classes, with banks maintaining stringent eligibility requirements, including high minimum income thresholds and complex documentation procedures. This exclusionary framework has kept a majority of the working population, especially those in the lower-income and informal sectors, outside the digital economy.
In contrast, many countries around the world actively promote financial inclusion. Banks in such economies are incentivized to issue debit and credit cards to a broader base of customers, including students, low-income workers, and small business owners. Pakistan must follow suit. The State Bank of Pakistan, in collaboration with commercial banks, needs to develop simplified criteria for issuing credit and debit cards, supported by strong consumer protection and awareness campaigns about responsible card use.
Furthermore, the government must expand digital infrastructure—particularly in rural and underdeveloped areas—to ensure that digital payment systems are not confined to urban centers alone. Encouraging merchants to adopt card payment terminals, offering tax incentives to businesses that go cashless, and subsidizing mobile point-of-sale (mPOS) systems can help widen the digital net.
Encouragingly, the upcoming budget is also expected to provide relief to the salaried class, which has been under significant financial pressure due to rising inflation and stagnant wages. Tax cuts or increased exemptions for this segment would be a welcome move and would further support the adoption of formal financial tools like credit cards. Salaried individuals are typically stable and low-risk customers, making them ideal candidates for card-based financial products.
The push for digital transactions in the upcoming federal budget is a step toward a more transparent, efficient, and inclusive economy. But for the initiative to truly succeed, the government must address the structural and regulatory barriers that limit access to digital financial tools. A budget that not only promotes digital payments but also ensures equitable access to them will mark real progress on the road to financial modernization and inclusion.
