Govt sanctions Rs3.5 billion annual subsidy to expand Raast QR adoption at retail outlets

ISLAMABAD:The State Bank of Pakistan (SBP)is set to implement a Merchant Discount Rate (MDR) subsidy scheme aimed at boosting cashless transactions through Raast QR code-based payments at retail outlets. The initiative, backed by the federal government, has been allocated an annual subsidy of Rs3.5 billion to accelerate the shift from cash to digital payments and promote financial inclusion. According to the Finance Ministry, under the MDR subsidy banks, microfinance banks, and Electronic Money Institutions regulated by SBP will receive 0.5% of each Raast QR transaction or Rs100 per transaction, whichever is lower. Additionally, these institutions will be allowed to charge up to 0.25% of the transaction value for onboarding and servicing merchants. The subsidy, which will be provided through a Technical Supplementary Grant in the current financial year, is projected to support approximately Rs700 billion worth of merchant transactions annually. Merchants have been directed to display Raast QR codes at their outlets byAugust 31. The initiative follows directives from Prime Minister Shehbaz Sharif during Steering Committee meetings on the cashless economy in July 2025. As part of broader reforms, the government has also proposed reducing import duties and taxes onpayment acceptancedevices and ensuring zero cost for merchants in usingRaast QR codes. SBP, in consultation with stakeholders, designed the MDR Subsidy Scheme to facilitate a cost-effectivedigital payment ecosystem. At the close of the financial year, SBP will submit a comprehensive evaluation report to assess merchant adoption, consumer usage, and transaction volumes. The Economic Coordination Committee (ECC) has already approved the initiative and directed SBP to present a detailed impact report inJuly 2026, highlighting transaction values, effectiveness of interventions, and recommendations for future enhancements.