How Raast works, and why it hasn't won the shop counter yet

Ask a shopkeeper in Lahore how you can pay without cash and there's a decent chance they'll read out a phone number. Not a QR code on the counter. Their personal number, so you can send the money as an ordinary transfer.

That habit tells you most of what you need to know about Raast. The State Bank built a payment rail that is instant, free and addressed by phone number, and people love it for sending money to each other. Getting it to work at the counter is a different problem. It's an economics problem much more than a technology one.

I work on card programs for a living, so I spend my days on a rail where every swipe pays someone. Raast was designed the opposite way. That design is why it took off, and it's why the merchant side is stuck.

What is Raast?

Raast is Pakistan's instant payment system, built and run by the State Bank of Pakistan. It moves money between accounts at participating banks and wallets in a few seconds, at any hour, and person-to-person transfers are free for customers. You can pay an IBAN, or a Raast ID, which for most people is simply their mobile number linked to one account.

It arrived in three phases. Bulk payments, for things like salaries and government disbursements, went live on 11 January 2021. Person-to-person (P2P) transfers followed in February 2022, per the State Bank's circular. Person-to-merchant (P2M) payments, the QR code at the till, were deployed in September 2023 and launched publicly that December.

How does a Raast payment work?

From the moment you type a number to the moment your friend's phone buzzes, four things happen.

1. Lookup. You enter a mobile number in your banking app. Your bank asks Raast which account that Raast ID points to, and shows you the name on it so you can check you've got the right person.
2. Send. You confirm. Your bank debits your account and sends the payment to Raast.
3. Credit. Raast routes it to the receiving bank, which credits the account and confirms back.
4. Done. Your app shows the payment as complete. The whole round trip usually takes a few seconds.

The important design choice isn't the speed. It's that the operator in the middle is the central bank, not a company that needs the rail to turn a profit. That's what allowed P2P to be free.

What's the difference between Raast and IBFT?

Pakistan had fast transfers before Raast. IBFT (interbank funds transfer) runs through 1LINK, a switch owned by a group of banks, and you address the payment with an account number or IBAN. Pricing is up to your bank.

To the person sending money, the two feel almost the same: both land in seconds. The differences are underneath. Raast is run by the State Bank instead of a bank-owned company. It works on a phone number, so you don't need anyone's IBAN. And the State Bank set the price of a P2P transfer to zero.

How big is Raast in 2026?

From January to March 2026, Raast processed 742.1 million transactions worth Rs23.3 trillion, according to the State Bank's quarterly payments data reported by Profit. Of those, 664 million were person-to-person.

Merchant payments were 55.9 million. That's up from 36.3 million the quarter before, which is real growth. It's also about one Raast payment in thirteen.

Why don't more shops accept Raast?

Start with how cards work, because that's the rail Raast is quietly competing with. When you tap a card, the merchant pays a fee, the merchant discount rate. Most of it goes back to the bank that issued your card as interchange, and some goes to the merchant's acquirer. That money pays for the card program: fraud teams, disputes, rewards and the sales staff who sign up merchants. Everyone in the chain is paid to push cards.

Raast P2P pays nobody. That's exactly why it spread so fast: it costs the customer nothing.

P2M is where someone has to pay. The customer still pays nothing, but the bank serving the merchant needs a reason to sign them up, support them and keep the QR working. So now the shopkeeper is comparing two options:

• A merchant QR, which may carry a fee and creates a clean record of every sale.
• "Send it to my number", which is free and looks like a transfer between friends.

Dawn points to merchants' resistance to fees and the blurry line between P2P and P2M. The Express Tribune reports merchants steering customers to cash or the established wallets instead of the merchant channel. And when analysts recommend promising merchants that their P2M data won't be used for tax enforcement, you know what the other fear is.

The State Bank knows all this. The government set aside Rs3.5 billion to subsidise P2M payments from 1 September 2025 to 30 June 2026: 0.5% of each payment or Rs100, whichever is lower, split equally between the merchant's bank and the customer's bank. More than 2.6 million merchants had been onboarded or registered their aliases by the end of March 2026, per the Tribune. Registered isn't the same as used, though: 55.9 million merchant payments in a quarter across 2.6 million merchants works out to roughly seven a month per registered merchant. The subsidy window has now closed, and I haven't seen a renewal announced.

What would I change about Raast merchant payments?

If P2M were my product, I wouldn't try to win on price. Free P2P will always be cheaper. I'd make the merchant side worth more than a transfer.

Make every payment reconcile itself. A P2P transfer to a personal number arrives with a name and an amount. That's it. A merchant payment can carry the invoice number, the till and the cashier. Reconciliation is the unglamorous thing I keep coming back to in every payments product I've worked on, and it's what businesses actually pay for.

Build refunds in. You can't cleanly refund a transfer. You should be able to refund a merchant payment from the same screen you took it on.

Turn receipts into credit. A shop with six months of Raast receipts has a cash-flow record a lender can underwrite. A working capital line based on that history is an incentive that cash can never match.

Separate the merchant's identity from the owner's. A business shouldn't have to take payments into a personal number. The day a merchant QR is easier to set up than reading out your phone number, the habit starts to change.

Raast already solved the hard technical problem: moving money between any two accounts in the country in seconds, for free. Free got it into every phone. Getting it into every till needs someone in the chain to get paid.