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Review of payment services

Pakistan’s monetary policy objective is to maintain the price stability, stable BoP (balance of payments) equilibrium, reduction in unemployment rate, growth rate of GDP and sustainable economic progress and development. These objectives are necessary to the achievement of internal and external balance of the economy, also the promotion of long-run economic progress and stability. The State Bank of Pakistan (SBP) trying all good to implement the best monetary to achieve the above targets and control the circulation of money in the market in the future.

For growing the macroeconomic stability in Pakistan, economic experts revealed that SBP has continued with accommodative monetary policy stance that translated well into stable interest rate at 5.75 percent, which is the lowest in last 45-year. Historic low interest rate and continuing stability in money market are the key instruments for private sector credit cycle for fixed investment and for working capital.

I would like to mention here, during 1995 the average interest was calculated 15 percent in the country. Ministry of Finance also calculated that during the period July-April, FY2017, Broad Money (M2) registered expansion of Rs762.2 billion (5.94 percent) as against to the expansion of Rs667.7 billion (5.92 percent) in the corresponding period previous year.

Net Domestic Assets (NDA) point contribution in broad money rose to 8.67 percent during July-April, FY2017 from 5.02 percent registered in the corresponding period of FY2016 while Net Foreign Assets (NFA) point contribution in broad money has declined to (-2.73 percent) during July-April, FY2017 as compared to the expansion of 0.90 percent in the comparable period of FY2016. In contrast, reserve money growth remains contained to 11.85 percent during July-April, FY2017 as against to the growth of 21.11 percent in the same period of previous year.

The growth in SBP’s NDA reached at 22.60 percent during the period under review as against to 22.11 percent in the corresponding period of previous year while SBP’s NFA contracted by (-18.7 percent) as against to the expansion of 17.7 percent during previous year. As a result, reserve money growth remained subdued during the period under review. Within Broad Money, NFA of the banking system during Jul-Apr, FY2017 fell by Rs350.7 billion, which is in sharp contrast to an expansion of Rs101.9 billion in the corresponding period of last year.

Economic advisors also identified that money supply (M2) recorded a growth of 5.94 percent during 1st Jul-Apr, FY2017 as against to the growth of 5.92 percent in the same period of previous year. While yearly basis it reached at 13.7 percent higher as on 21st April, FY 2017.

During the period Jul-Apr, FY2017, Currency in Circulation (CIC) rose by Rs.216.5 billion (6.5 percent) as compared to the expansion of Rs.508.6 billion (19.9 percent) in the corresponding period of last year, whereas yearly growth registered at 15.9 percent as on 21st April, FY2017. The currency-to-M2 ratio has also been raised to 26.1 as on 21st April, 2017 as against to 25.6 percent in the corresponding period of last year.

The role of some main financial companies in the current payment system of Pakistan as follows:

WESTERN UNION

Western Union is a leader in worldwide payment services, and has an extensive network, counting more than 550,000 agent locations in greater than 200 states and territories and over 100,000 ATMs and kiosks, and the capability to send money to billions of accounts. Western Union assists people and businesses move money – to assist grow economies and realize a better world. It is calculated that during 2015, it moved over 150 billion dollar for their consumer and business customers.

MONEYGRAM

MoneyGram is the 2nd largest money transfer company in the globe and has 1.45 billion dollar in yearly revenues. It has a track record of targeted growth and well-positioned in a nearly 600 billion dollar- and rising- industry. It now gives services at about 350,000 agent locations in greater than 200 states, and has an aggressive expansion plan that includes 15 to 20 percent of money transfer revenue from self-service channels counting mobile, account deposit, online, ATMs, and kiosks.

WORLDREMIT

WorldRemit is an online service that lets people send money to friends and family living abroad, using latest technology such as computer, smartphone or tablet. The company’s service is obtainable to senders in 50 states. It provides transfers to greater than 120 destinations across Europe, Asia, Africa, Australia and the Americas. In early 2015, it secured a 100 million dollar investment, led by Technology Crossover Ventures (TCV).

XPRESS MONEY

Xpress Money is a worldwide money transfer brand with a thriving presence in greater than 170 states across all continents by 180,000 agent locations. Xpress Money has come to be known as the most dependable global money transfer brand and gives its customers a simple, fast and safe way to transfer money by innovative technology, superior customer service and its extensive global network. Presently, the company has introduced a promotional campaign with National Bank of Pakistan (NBP) where hundreds of remittance clients sending their remittances by Xpress Money from across the globe and receiving them from any of the NBP’s branches.

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