Digital transformation of Pakistan’s cattle markets: a tactical move towards cashless transactions

One such sector is the livestock market, particularly during the Eid ul-Azha season, when the sale of sacrificial animals generates massive payment volumes. Markets are established one month prior to Eid, with peak buying occurring during the final 15 days leading up to the festival.

Historically, most transactions have been conducted in cash, creating substantial logistical challenges for both merchants and buyers, including the management of large sums of money, often requiring transportation over long distances.

SBP’s QR Code Payment Initiative

In March 2022, SBP introduced the Standard on Interoperable QR Code Payments, aimed at reducing the reliance on cash and creating a more efficient financial ecosystem. The initiative enables banks to facilitate payments via QR codes, offering both static and dynamic QR options: static QR codes allow the sender to manually input the payment amount, while dynamic QR codes embed the amount in the code at the time of creation. By 2024, 25 banks were using the system, a sign of its popularity.

Pilot Project in Cattle Markets

In 2024, SBP launched a pilot project, involving 18 banks, to enable digital payment solutions in over 50 major cattle markets. Banks were tasked with onboarding merchants (primarily cattle sellers), facilitating the opening of digital accounts, and training them to accept payments via QR codes.

The initiative aligns with several key objectives of SBP, including:

1. Reducing Currency Circulation: encouraging a shift from cash to digital transactions, the initiative contributes to a more efficient financial system.
2. Enhancing Security and Convenience: providing a safer, more convenient method for merchants to receive payments, reducing the risks associated with managing and transporting large sums of cash.
3. Promoting Financial Inclusion: enabling access to digital payment platforms in order to bring underserved and unbanked populations into the formal financial ecosystem.

Logistical Support and Capacity Building

The roll out of digital payments in cattle markets was supported by significant infrastructure investment. Banks deployed staff onsite, provided training, and ensured that at least two bank officials were present at all times during the peak season. Mobile vans equipped with internet connectivity were deployed to facilitate seamless transactions, and biometric devices were used for account opening. QR codes for merchants were generated on-site, laminated for protection, and displayed on digital screens to promote the benefits of the digital payment system.  

To help cattle sellers, who often belong to low-income or disadvantaged populations, to open accounts, banks simplified account opening processes, enabling quicker access to financial services.  

Given the high transaction volumes during the Eid ul Azha period, SBP granted banks temporary permission to increase transaction limits and account balance limits, contingent upon the completion of biometric verification and customer due diligence requirements.

Public Awareness Campaigns and Market Feedback

SBP launched a comprehensive marketing campaign, including a commercial aired on TV and social media, showing a typical transaction where a customer purchases a sacrificial animal and pays via QR code. In parallel, banks and microfinance institutions conducted their own campaigns to promote the digital payment system. 

Eid ul-Azha and the Pilot’s Success

Merchant response has been overwhelmingly positive, with many praising the ease and security provided by digital payments. Moreover, several cattle market administrators have begun collaborating with participating banks to expand digital services and integrate more advanced financial solutions into the market.

Over 4,000 merchants were onboarded to digital payments during the pilot project, and digital transactions amounted to approximately Rs. 560 million. While these figures may appear modest, they represent a significant first step in integrating digital payment solutions into a market that has long relied on cash.

Looking Ahead

Integrating QR code payments into cattle markets is just part of broader national efforts to develop a dynamic, efficient, and secure financial infrastructure. As more markets and sectors are brought into the digital fold, Pakistan is poised to unlock significant economic potential, become less reliant on cash, and bring historically underserved populations into the digital economy.