Raast: the force multiplier.

Since its creation, Pakistan has only seen two major innovations in the payment space. The first happened in 2008 when Tameer Bank in conjunction with Telenor launched the 'Easypaisa' service. The transformation of Kiryana stores into branchless banking agents suddenly made domestic payments convenient, secure and transparent. About 90,000 locations were available for consumers as opposed to 12,500 bank branches.

Easypaisa was followed by many other players and the over-the-counter service was upgraded to mobile wallets. This was huge from a financial inclusion perspective as currently there are more than 46 million wallets and over 10 per cent of our GDP being moved in transactional volume.

The second such revolution is the introduction of Raast by the State Bank of Pakistan (SBP). It is expected to have an even larger impact on financial inclusion over the next five years. A similar service in India called the Unified Payment Interface (UPI) has grown 123 times from 2m transactions in 2016 to 246m in June 2018. Similar growth is expected in Pakistan as the use cases and financial exclusion scenario has many parallels.

Once people in your phone contact list have linked their mobile wallets or bank accounts through a payment app, you will be able to transfer funds instantly regardless of which bank their account is in through a simple message using any messaging platform which is integrated with Raast

So, what is Raast? How is it different from the current payment systems: Pakistan Real-time Inter-bank Settlement Mechanism (PRISM) and Inter-Bank Fund Transfer (IBFT)? Why is it considered revolutionary? And why is it expected to have such a material impact on financial inclusion?

Raast is a payment railroad launched by the SBP which will allow any entity that is connected to this service real-time online transfers with instant settlement. It is connected to the current PRISM (Real Time Gross Settlement) payment service. It is different from the current payment railroads in three principal aspects.

Firstly, PRISM and IBFT are limited to either banks, payment systems operators, equated monthly instalments (SBP licensed institutions) and/or their customers. Raast will not be limited to the existing players; the SBP will define a new regulatory regime which will allow hundreds of entities to avail this service. Participants will no longer require a $2m license to avail this railroad.

The second big difference is contextual messaging and...