Prime Minister Shehbaz Sharif has directed the full digitisation of overseas remittances to Pakistan, framing the move as central to the country’s push toward a cashless economy. The directive, issued at a high-level review meeting, instructs the relevant ministries, regulators, and financial institutions to put in place a comprehensive framework that channels the bulk of remittance flows through formal, traceable, digital rails rather than the cash-based and informal hundi/hawala systems that have historically captured a significant share of the flow.

What does “full digitisation” actually mean in practice?

In practice, it means three things. First, every licensed remittance channel — bank transfers, mobile wallets, exchange companies, and fintech platforms — should be interoperable, so a sender in Saudi Arabia can use any platform and a recipient in a village in Sindh or Punjab can receive the money in their preferred digital account. Second, every remittance transaction should generate a digital receipt that the sender and the receiver can both verify, and that the FBR can use to track the flow for tax and policy purposes. Third, the digital onboarding process for new remittance recipients — particularly in rural areas where many households are still unbanked or underbanked — should be simplified so that receiving money digitally is as easy as the alternative informal options.

Why is the government pushing this now?

Three reasons. First, the IMF programme that Pakistan is working under has consistently demanded structural improvements in revenue collection, and the formalisation of remittance flows is one of the easier wins available — it doesn’t require new taxes, just better integration of existing rails. Second, the technology has finally caught up: Raast, Pakistan’s instant-payment system, now handles the bulk of domestic digital payments, and most major sending corridors (UAE, Saudi Arabia, UK, US) have well-developed digital infrastructure on the sending side. Third, the political case is straightforward: bringing more of the $30 billion-plus annual flow into formal channels increases foreign exchange reserves, supports the rupee, and provides better data for economic policy.

How much of Pakistan’s remittance flow currently goes through formal channels?

About 80-85% of recorded remittances now come through formal banking and licensed exchange channels, which is a significant improvement from a decade ago when informal channels were estimated to capture 40-50% of the flow. The remaining 15-20% is split between informal hawala/hundi operators (estimated at 10-15%) and physical cash carried by travellers. The government’s target is to push the formal share above 95% over the next few years, which would bring an additional $3-5 billion annually into the formal economy.

What changes for the average overseas Pakistani sending money home?

For most people, not much will change day to day. If you’re already using a bank transfer, an exchange company like Western Union or MoneyGram, or a mobile wallet like Payoneer or Wise, the experience will largely be the same. The improvements that are coming: lower transaction fees (the current average of 4-6% is one of the highest in the region), faster settlement (most corridors now settle in minutes rather than days), and better exchange rates (because more competition among formal channels narrows the spread). For senders in remote areas who currently rely on cash agents, the digitisation push will mean more options to send through apps rather than physical agents.

What changes for the average recipient in Pakistan?

The biggest change for recipients is access. Right now, a large share of remittance recipients, especially in rural areas, either collect cash from a nearby agent or hold a bank account that they don’t actively use. The digitisation push aims to change that: more recipients will have active bank accounts or mobile wallets, more will receive the money directly into those accounts, and more will be able to use the funds for digital payments (utility bills, school fees, mobile top-ups) without needing to convert to cash first. This is genuinely transformative for households that have historically had to physically travel to receive remittances, and it also opens up access to formal credit and other financial services that depend on a verifiable income history.

How does this relate to Raast and the broader digital payment push?

Raast, the State Bank’s instant-payment system, is the core infrastructure that makes the digitisation of remittances practical. Once a remittance lands in any Pakistani bank account or licensed wallet, Raast allows it to be moved instantly to any other account or converted to mobile wallet balance with no fees. This is what makes the “receive in a bank, spend digitally” workflow viable for ordinary households. Without Raast, digitisation would still be possible but would be slower and more expensive. With it, the cost of moving remittance money domestically is effectively zero, which is a structural change from a few years ago.

What role do mobile wallets play?

Mobile wallets like JazzCash, Easypaisa, and the newer entrants (SadaPay, NayaPay, etc.) are the on-ramp and off-ramp for many recipients, particularly in rural and unbanked populations. A typical workflow now looks like: overseas Pakistani sends via app or bank → money lands in recipient’s mobile wallet within minutes → recipient uses wallet balance to pay bills, transfer to family, or withdraw cash at an agent. The wallets have made significant inroads in the last few years and are now the primary digital financial touchpoint for tens of millions of Pakistanis. The government’s digitisation push explicitly favours wallet-based remittance delivery for this reason.

What about the hawala/hundi operators — will they go away?

Not entirely, and probably not in the short term. Hawala has survived for centuries precisely because it offers things formal channels struggle to match: anonymity, no paperwork, no questions asked. For some users, those are features, not bugs. The government’s bet is that if the formal channels get fast enough, cheap enough, and easy enough, the marginal hawala user will switch voluntarily. That’s how the formal share grew from 50% to 85% over the last decade, and the next 15 percentage points will be the same pattern, just slower. A complete elimination of hawala is unlikely; a reduction to 5% or less of total flow is plausible over the next five years.

What does this mean for Pakistan’s economy and currency?

More formal remittance flow means more foreign exchange reserves, which supports the rupee; more taxable transactions, which supports the FBR’s revenue targets; more data for economic planning; and more integration of overseas Pakistanis into the formal financial system, which has knock-on benefits for investment and savings. The cumulative effect of digitisation over the last decade is already visible: Pakistan’s remittance flow has roughly doubled in nominal terms since 2016, and a meaningful share of that growth is attributable to the migration of flows from informal to formal channels. The next phase should produce similar gains.

What are the risks or downsides?

Three. First, financial exclusion: households without digital access (smartphone, internet, or basic literacy) may be left behind if the digitisation push doesn’t include support for them. Second, cybersecurity: more money flowing through digital rails means more attempts at fraud, and Pakistan’s consumer-protection infrastructure for digital finance is still being built. Third, data privacy: the same digitisation that gives the government better data for policy also gives it more data on individual households, which requires careful handling to avoid misuse. None of these are reasons to slow the digitisation push, but they are reasons to invest in the guardrails alongside it.

What should overseas Pakistanis do now?

If you’re sending money home and you’re not already using a low-cost digital channel, the next few months are a good time to compare options. The fees and exchange rates vary meaningfully between banks, exchange companies, and fintech platforms, and the gap can be 2-3% of the amount sent — which on a $500 monthly remittance is $10-15 of pure savings per month, or $120-180 a year. The SBP publishes quarterly remittance statistics that include the average cost of sending from major corridors, which is a useful starting point. If your recipient is in a rural area, the most practical first step is often to make sure they have a mobile wallet set up and linked to their CNIC, which is a one-time effort that makes every subsequent transfer cheaper and faster.

For the broader SBP financial ecosystem context, our SBP Raast coverage walks through related digital infrastructure. For the InvestPak portal as another example of SBP digital reform, our InvestPak coverage is relevant. For the Pakistan Super App as a parallel federal digital push, our Pakistan Super App coverage is useful. For the bank-account-onboarding context that’s foundational to receiving remittances, our online bank account opening guide is relevant.

Source: PM Shehbaz Sharif’s directive on remittance digitisation, State Bank of Pakistan quarterly remittance statistics.