Omni allows customers to make over-the-counterbill payments and send money to friends and familyin Pakistan via a network of agents known as OmniDukans. The service also offers an account accessiblefrom mobile phones via SMS or WAP and cards(both generic and Visa cards are available). TheOmni account requires a minimum balance of Rs100(US$1.15) and offers several fee packages, includingpay-as-you-go, weekly, monthly, and annual. UBLhas won several contracts to disburse paymentsfor nongovernment organizations and governmentschemes, such as the Benazir Income Support Program(BISP), the government’s flood relief program, and theWorld Food Programme (see Box 2) (CGAP 2011).UBL reports that at the end of June 5,000 agents weredisbursing payments to 2 million recipients underthese programs. Recently, UBL started accepting loanrepayments for microfinance institutions (MFIs) andproviding cash management facilities for businesses.As it is with easypaisa, a major challenge for UBL isgetting customers to sign up and transact via accountsinstead of relying on over-the-counter transactions.
Pilots or Small-Scale Launches
First MicroFinance Bank
(FMB) was the first bank inPakistan to experiment with branchless banking. Itreceived special permission from SBP to collaboratewith the Pakistan Post Office on a pilot in March2008. For the pilot, FMB loan officers were stationedinside post office branches for loan disbursementand collection, allowing FMB to expand far morecheaply than it could were it to open new branchlocations. FMB reports that it has now deployed staff in 52 post office locations and has disbursed 162,000loans amounting to US$29 million. Loan officersreport to the nearest FMB branch; they do not havean electronic system for recording transactionsundertaken at the post office. There are no plans toscale up the service.
Dubai Islamic Bank Pakistan Ltd,
targets highnet worth individuals, was awarded a branchlessbanking license in April 2010. It plans to operatelow-cost channels for 50,000 existing customers inschools, business districts, residential areas, andshopping malls. According to the bank, service is inthe pilot phase at three sites and will likely expand to25 locations by year end. The service will not targetthe mass market.
Anticipated Market Entrants
is the largest MNO in Pakistan, with 32million SIM cards issued at the end of 2010 (PakistanTelecommunication Authority 2010). It has had twounsuccessful attempts at launching a branchlessbanking service in Pakistan to date: the first with thePakistan Post Office and the second with Citibank. Inits third attempt, Mobilink and its parent company,Orascom, received a license for a wholly owned
The Government of Pakistan, and in particular SBP,has shown strong leadership in promoting financialinclusion as a policy priority.After consulting with the private sector, thegovernment issued new branchless bankingregulation in April 2008. The regulation allowed forseveral models of branchless banking by which bankscould offer services through a network of agents.This gave banks and their partners the confidence toinvest in rolling out services. As services were rolledout, a number of issues that were still holding backsector development came to light. In response tothese, SBP issued revised regulations in June 2011.
to capture biometric fingerprint informationat the time of account opening for the lowestvalue accounts. Deploying the biometric capturetechnology to thousands of agents was expensiveand created a significant barrier to customerenrollment. Biometric information could notbe verified against the national databaseand, consequently, did not provide additionalsecurity. A digital photo of the account holder isnow required instead to confirm the person wasthere at the time the account was created.
a higher value of over-the-counter transactionsthan they could transact through an account, allwith lower customer identification requirements.The new regulation raised the transaction limitson accounts to fix this discrepancy.
account, with very low balance and transactionlimits, which may be opened electronically withno physical paperwork. This will further reducethe cost of account opening.
Box 1. The Regulatory Environment forBranchless Banking in Pakistan