Raqami Selects Euronet Pakistan as a Key Partner to Launch the First Islamic Digital Bank in Pakistan

 

Raqami Selects Euronet Pakistan as a Key Partner to Launch the First Islamic Digital Bank in Pakistan

On January 11, 2024, Raqami Islamic Digital Bank and Euronet Pakistan. Entered into an exclusive agreement to promote digital payments in the country. In January 2023, Raqami Islamic Digital Bank (RIDB) obtained a no objection certificate (“NOC”) from the State Bank of Pakistan (SBP) to establish an Islamic digital retail bank in the country.

In September 2023 SBP awarded in-Principal Approval (IPA) to Raqami and four other aspirants for the digital bank license. Under the IPA, RIDB is in the process of developing its operational readiness for the pilot, followed by a commercial launch as a digital retail bank.

Euronet Pakistan is a division of Euronet Worldwide, a NASDAQ-listed company (EEFT) and an industry leader in processing secure electronic financial transactions. Euronet Pakistan brings the experience of the world’s largest global provider dedicated to banking and payment technologies.

Euronet Pakistan will be providing RIDB services such as Payment Switches, Card Management Solutions, Credit Cards, ATM Controllers, POS/E-Commerce Acquiring, Fraud Management Solutions, and Card Tokenization.

Procuring a payment system by a bank is a strategic process aimed at selecting and implementing a technology platform that facilitates a range of payment services for the bank’s customers, covering a wide range of financial transactions, including fund transfers, bill payments, card processing, acquiring, and more.

To have a robust, integrated, scalable, and cloud-ready middleware platform, Raqami will leverage Euronet’s system to integrate payment systems, core banking systems, non-core applications, and digital channels. The move aims to build operational efficiency, reduce costs, improve service availability, and ensure a seamless digital banking experience for Raqami’s customers.

Kashif Gaya CEO of Euronet Pakistan commented: “We are excited to be selected by Raqami as their technology partner for card issuance, fraud management, and transaction processing, and play a pivotal role in the launch of the first Islamic Digital Bank in Pakistan. We’re proud to be part of Raqami’s evolution and we look forward to supporting them through our locally hosted, next-generation digital platform, which would allow scalability and agility, empowering the bank to focus on business value and deliver new card products and payment services in the shortest possible time”.

Umair Aijaz CEO RIDB stated: “In the current era of industry-wide digitization, a well-designed payment hub is not just a tool; it’s a prerequisite for innovation, inclusion, and economic empowerment. The SBP’s systematic additions and enhancements to the digital ecosystem in the country are yielding undeniable dividends for Pakistan, as evidenced by the declining cash in circulation from PKR 9,149 billion in June 2023 to PKR 8,288 billion in the quarter ending September 30, 2023.”

He further added: As Raqami prepares to launch as Pakistan’s first Islamic digital retail bank, we are committed to playing our part in this evolution. This exclusive agreement between Raqami and Euronet is a key partnership that will help set the foundation for the country’s first Islamic digital bank.”

Nadeem Hussain, Coach RIDB noted: “As part of a concerted drive by the Government of Pakistan to increase the availability and uptake of digital financial services in the country, the SBP has been spearheading numerous efforts. The latest Quarterly Payment Systems Review Report shows remarkable progress, with digital transactions accounting for an estimated 80% of total retail transactions processed by Banks, MFBs and EMIs, with only 20% accounted for by over-the-counter (OTC) transactions.”

He said: Similarly, the total number of ATMs now exceeds 18,000 while POS machines have increased to over 100,000. In this rapidly evolving ecosystem, Raqami believes the right partnerships will not only provide it with a viable starting point but also enable it to rapidly achieve scale while meeting the expectations of an increasingly digitally savvy clientele. We are confident that this partnership with Euronet is not only beneficial for both entities but also for the Pakistani customer.”

RIDB is one of five aspirants for the digital retail bank license, which is to be awarded by the State Bank of Pakistan under the Licensing and Regulatory Framework for Digital Banks (the Framework) 2022 after incumbents achieve operational readiness and successfully conclude a pilot.

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