The State Bank of Pakistan has officially launched the much-anticipated Raast Person to Merchant (P2M) service, an interoperable channel designed to facilitate digital payment acceptance for merchants and businesses.
This new system will empower businesses to accept payments through various channels, including Quick Response (QR) Codes, Raast Alias, International Bank Account Numbers (IBAN), and Request to Pay (RTP). Additionally, customers will have the ability to initiate requests for returns and refunds through Raast.
The P2M service is expected to accelerate the digitization of merchant and business transactions across Pakistan, engaging banks, Microfinance Banks (MFBs), Electronic Money Institutions (EMIs), Payment Service Operators (PSOs), and Payment Service Providers (PSPs) operators. The initiative is poised to enhance the overall efficiency and effectiveness of transactions by seamlessly integrating intelligence and computing capabilities into daily operations.
Notably, the State Bank of Pakistan has mandated that all Regulated Entities (REs) must be enabled for processing P2M transactions through their delivery channels, including mobile apps, internet banking portals, and USSD channels (where applicable), by March 1, 2024. This directive aims to ensure widespread adoption of digital payment services through the Raast P2M Service.
To promote user-friendly experiences and encourage adoption, the REs have been instructed not to charge any fees from customers for transactions. Furthermore, there will be no restrictions on the number and amount of transactions unless there are valid concerns related to fraud, cybersecurity, or anti-money laundering.
The Raast Merchant Service Providers (MSPs) will play a crucial role in onboarding businesses, such as merchants, aggregators, marketplaces, and billers, after conducting due diligence in compliance with relevant laws and regulations. These entities will utilize QR codes in line with specifications provided by the State Bank of Pakistan. The MSPs will ensure that merchants promptly receive payment confirmation or rejection advice from Raast, offering real-time payment confirmation.
While MSPs may charge merchants a reasonable fee for services provided, they are encouraged to initially waive such charges to foster merchant adoption. Additionally, MSPs may enter into agreements with third parties for billing or invoicing services over Raast merchant services. They may also embed Raast merchant services for checkout purposes into partner apps, adhering to all relevant SBP regulations.
The State Bank of Pakistan has urged MSPs to enable necessary integrations with Raast P2M and facilitate Raast payment acceptance at merchant locations and e-commerce checkouts. Other REs interested in becoming Raast Merchant Service Providers are required to inform the SBP’s Digital Innovation & Settlements Department (DI&SD) and fulfill the necessary technical requirements for integration with Raast.
All REs, including MSPs, must ensure that billers and bill-aggregators already onboarded by them are enabled to accept payments via Raast RTP by March 31, 2024. Additionally, comprehensive awareness measures, including media campaigns and strategic alliances, are to be undertaken to promote Raast Merchant Services adoption.
The State Bank of Pakistan has emphasized that non-compliance with Raast-related instructions will result in punitive action under the relevant provisions of the Payment Systems and Electronic Fund Transfer Act, 2007. To address potential disputes, liabilities, and risks associated with on-boarded merchants and third parties, REs will be required to devise comprehensive frameworks.
Furthermore, they must implement measures to prevent the loss of customer data and funds due to cybersecurity threats, aligning with international best practices. The prevention of fraud and misuse of Raast P2M Service is also a key focus, with REs instructed to follow guidelines issued by the SBP.
REs, including banks, MFBs, EMIs, PSOs, and PSPs operators, are mandated to submit compliance status reports, duly signed by the Chief Operating Officer (COO) and Chief Compliance Officer (CCO), to the SBP’s Digital Innovation & Settlements Department on or before April 1, 2024.
