Empowering Pakistan Through Digital IDs and Payments for Financial Inclusio

Published Date : 7/31/2025 

Explore how digital ID and payment systems are transforming financial inclusion in Pakistan, particularly for women and rural residents. 

Globally, around 850 million people lack legal identity, severely limiting their access to basic services and economic participation. This issue disproportionately affects women in low-income countries, especially in South Asia and Sub-Saharan Africa, where 44 percent of women lack ID compared to 28 percent of men. Limited digital literacy and internet connectivity exacerbate these challenges. However, there is hope that robust digital identity systems can bridge this gap, enabling financial inclusion and economic growth.

According to the World Bank’s ID4D Global Dataset 2021, nearly 25 percent of the global population without legal identity is in South Asia, totaling almost 200 million people. Women and rural residents face significant barriers, including education, income, and documentation obstacles. Many lack birth documents, and application fees and travel distances further hinder their access. This exclusion restricts access to financial services, healthcare, mobile connectivity, digital rights, and voting, underscoring the urgent need for affordable, inclusive, and trustworthy identity solutions.

Digital payments and IDs are crucial for financial inclusion. Insights from Development Asia report that over a billion people in developing Asia are unbanked, and only 21 percent of adults in Pakistan have bank accounts or mobile payment accounts. Financial exclusion disproportionately affects women, who are only half as likely as men to have access to banking services. Digital financial services, particularly mobile money, offer significant potential by enabling low-cost, fast, safe, and easy transactions. In 2022, Pakistan had only 10.8 commercial bank branches per 100,000 adults, one of the lowest ratios in the region.

RAAST, Pakistan’s quick payment system launched in 2021, provides secure, low-cost person-to-person and business-to-business transactions. By 2023, it had processed over 102 million digital payments, making formal financial services available to millions. Despite these improvements, challenges remain, including a lack of trust, inadequate data protection, financial concerns, and digital literacy gaps, particularly among rural women. The Asian Development Bank-backed Women Inclusive Finance Sector Development Program (WIFSDP) trains female banking agents to reach out to deprived populations.

Lessons from regional giants like India’s UPI and China’s Alipay highlight the transformative potential of digital payment systems in Pakistan. Government efforts to digitize pensions, taxes, and welfare using secure digital IDs can expedite adoption, enhance financial inclusion, and foster equitable economic growth. The government can lead by example, using digital methods for tax payments, pensions, and other services. A digital ID system can also facilitate account access. More policies promoting trust in the digital economy, such as those on data privacy, cybersecurity, and consumer protection, must be prioritized.

NADRA has launched new digital ID services to increase accessibility and transparency. These include new B-Forms requiring biometric data for children over the age of three, and the issuance of separate certificates for passport applications. A crucial feature allows women to list their father’s name instead of their husband’s on CNICs, providing more personal choice. These services are now available at 24/7 National Registration Centers and through the Pak-ID mobile app, benefiting overseas Pakistanis.

The State Bank of Pakistan (SBP) has simplified banking procedures to increase financial inclusion and digital access. Banks are now required to open new personal or business accounts within two days, with application tracking for transparency. The SBP has introduced several initiatives to broaden access to financial services, including branchless banking, Asaan accounts, digital onboarding, and specialized accounts for freelancers, overseas Pakistanis, and remittance recipients. The SBP’s new framework simplifies documentation, allows for digital account opening, and requires regulated businesses to provide at least one digital payment option, such as Raast QR codes, POS terminals, or online checkout. These efforts aim to accelerate Pakistan’s transition to digital banking, increase convenience, and promote broader economic involvement, particularly among small businesses and marginalized communities. 

Frequently Asked Questions (FAQS): 

Q: What is the global impact of lacking legal identity?

A: Globally, around 850 million people lack legal identity, which severely limits their access to basic services and economic participation. This issue disproportionately affects women in low-income countries.

Q: How does the World Bank's ID4D Global Dataset 2021 describe the situation in South Asia?

A: According to the World Bank’s ID4D Global Dataset 2021, nearly 25 percent of the global population without legal identity is in South Asia, totaling almost 200 million people.

Q: What is the significance of RAAST in Pakistan?

A: RAAST, Pakistan’s quick payment system launched in 2021, provides secure, low-cost person-to-person and business-to-business transactions. By 2023, it had processed over 102 million digital payments, making formal financial services available to millions.

Q: What new services has NADRA introduced to increase accessibility and transparency?

A: NADRA has launched new digital ID services, including new B-Forms requiring biometric data for children over the age of three, and the issuance of separate certificates for passport applications. A crucial feature allows women to list their father’s name instead of their husband’s on CNICs, providing more personal choice.

Q: How is the State Bank of Pakistan (SBP) simplifying banking procedures?

A: The SBP has simplified banking procedures to increase financial inclusion and digital access. Banks are now required to open new personal or business accounts within two days, with application tracking for transparency. The SBP has also introduced several initiatives to broaden access to financial services, including branchless banking, Asaan accounts, digital onboarding, and specialized accounts for freelancers, overseas Pakistanis, and remittance recipients. 

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