In 2008, most Pakistanis had no bank account but did have a mobile phone. The State Bank's bank-led model used that asymmetry to build one of the world's largest branchless banking ecosystems.

The dilemma

In the mid-2000s, Pakistan had millions of mobile phone users and very few bank account holders. Bank branches were never going to close that gap. The question for the State Bank of Pakistan was who should lead the move to mobile money. Telecom operators could move quickly, as Kenya had shown with M-Pesa, but allowing them to lead would put mobile money outside banking supervision. Keeping licensed banks as the regulated party would protect supervision but risk slower reach.

The regulatory gap

Pakistan needed a middle path. Standard banking rules were too restrictive: they assumed customers walked into a branch with passports and proof of address, which most rural Pakistanis could not produce. But letting telecom companies run mobile money without any rules would mean no protection against money laundering, fraud, or sudden collapse. The country needed a framework that could scale at the speed of telecom networks while keeping the safeguards that come with banking supervision.

The approach

In 2008, the State Bank of Pakistan issued the Branchless Banking Regulations, later revised in 2011, 2016 and 2019. The model was deliberately bank-led. Licensed commercial, Islamic and microfinance banks remained the legally responsible parties, but were allowed to deliver mobile money through agent networks and partnerships with telecom operators. The reasoning was that pairing banking accountability with telecom reach would deliver both financial inclusion and stability.

Results achieved

The framework underpinned services like Easypaisa and JazzCash, which became Pakistan's largest digital payment providers. State Bank data show more than 50 million branchless banking accounts and billions of transactions a year by 2023. The share of adults with any bank account rose from 13% in 2011 to 21% in 2017, driven largely by mobile channels.

In 2021, the State Bank and the Pakistan Telecommunication Authority launched a second-stage innovation: the Asaan Mobile Account. This created a single onboarding platform that worked across all mobile networks, so customers could open an account regardless of which operator they used. The aim was to stop early winners from locking newer entrants out of the market.

Two limits are worth noting. Account ownership has not automatically translated into active use of those accounts. And a gender gap in who uses digital financial services remains a known challenge the framework is still working through.

The transferable lesson

Mobile money was going to happen in Pakistan one way or another. The real question was who should be legally accountable for it. By placing that responsibility with banks and giving telecom operators the role of reaching customers, Pakistan built a market that scaled quickly without weakening supervision. The model is most useful for countries with mature banking regulators and strong telecom networks, which describes much of the global South.