Prime Minister Shehbaz Sharif has ordered that all remittances from overseas Pakistanis be processed through digital channels, pushing the country closer to a cashless economy. The directive came during a high-level meeting in Islamabad focused on expanding digital payments nationwide. Main Developments The premier instructed that awareness campaigns encouraging merchants to adopt QR code payments be made more effective, according to a statement from the Prime Minister's Office. He also mandated that 100% of remittance inflows from abroad be digitised, building on an already strong digital foundation—92% of remittance funds were received digitally in the past year. Workers' remittances serve as a critical stabiliser for Pakistan's external sector, with inflows reaching a record $41.6 billion in the last fiscal year. The meeting revealed that active merchants using QR codes surged 300% between June 2025 and June 2026, reaching two million. Mobile banking app users also grew from 95 million to 137 million over the same period. Read also: Why Strait of Hormuz tensions are driving oil prices higher PM Shehbaz commended the economic team for progress in transforming Pakistan's economy into a digital payments-based system. He stressed that transitioning to a cashless economy would drive sustainable growth and enhance transparency, lauding the 300% increase in QR-code-using merchants as a significant achievement. Background Pakistan has been steadily moving toward a digital economy, with the government expanding its Roshan Digital Account (RDA) framework last month to include foreign nationals and investors. Previously, RDA was available only to overseas Pakistanis. In June last year, PM Shehbaz formed a high-level committee to promote a cashless system, underscoring the administration's long-term commitment. The Benazir Income Support Programme (BISP) has already shifted to digital payments, with all disbursements to 10 million beneficiaries now made through digital wallets. The PM described the shift as transparent, swift, and convenient. Additionally, 99% of National Database and Registration Authority (Nadra) payments have been digitised, reducing cash transactions from 71% to just 1%. Why It Matters Digitising remittances and payments addresses two chronic challenges for Pakistan: low transparency and a large informal economy. By moving transactions online, the government aims to reduce leakage, improve tax collection, and provide a clearer picture of economic activity. The record $41.6 billion in remittances last year highlights how vital these inflows are for the country's balance of payments. Widespread digital payments also promise convenience for citizens, especially those receiving social welfare payments through BISP. The 11.9 billion digital transactions recorded between July 2025 and June 2026 signal growing adoption, though third-party validation is still underway to assess the system's effectiveness. What's Next The Pakistan Banking Association has set targets for member banks to promote digital payments, including through the Raast instant payment system. A final report with recommendations from third-party validators is expected in November. The meeting was attended by key cabinet members, including Finance Minister Muhammad Aurangzeb, IT Minister Shaza Fatima Khawaja, and State Bank Governor Jameel Ahmad, indicating strong institutional backing for the digitisation push.