Digital P2G payments gain momentum

Digital payments for taxes and government obligations in Pakistan are growing in popularity, with 1LINK processing approximately Rs13.5 trillion in such transactions in 2025. Consumers are increasingly opting for electronic payments to fulfill their government duties, bypassing the need to visit bank counters. Digital transactions are also credited to designated accounts much more swiftly.

1BILL, a digital bill payment platform operated by 1LINK, plays a significant role in this shift. It provides payment infrastructure and solutions to financial institutions. 1LINK entered into its first agreement with the Federal Board of Revenue (FBR) in 2017, collecting roughly Rs350 million in tax payments in its first year. Since then, the platform has expanded beyond tax payments to encompass a broader range of government collections, including duties, fines, fees, licenses, and other public-sector obligations.

The transition from cash and branch-based processes to digital channels has improved convenience for taxpayers while reducing processing times, operational costs, and the risks associated with manual collection. A tripartite framework involving the Ministry of Finance, the State Bank of Pakistan (SBP), and 1LINK has been established to facilitate this transition at both federal and provincial levels.

This framework has enabled government departments to join the digital payment system through simplified accession processes and reduced institutional and technical barriers to digitization.

The number of transactions processed through 1BILL has surged from around 1.2 million in 2019 to 56.1 million in 2025, representing a remarkable 4,575 percent increase and an annualized growth rate of approximately 90 percent. Currently, 1,173 government entities and public sector entities are integrated into the 1BILL platform, with a total of 5,342 billers and sub-billers utilizing the service.

Notably, there are 41 banks participating, including 22 conventional banks, 9 microfinance banks, 7 Islamic banks, and 3 digital banks.

Khan emphasizes that the growth in digital payments signifies more than just larger payments from existing taxpayers; it also brings new individuals and businesses into the formal digital ecosystem, thereby broadening the tax base. The average payment amount per digital taxpayer remains within the range of Rs225,000 to Rs270,000, indicating a broad-based adoption rather than being driven by a small segment of high-value filers.

The digitization of national tax collection aims to enhance convenience, transparency, stronger controls, and the elimination of systemic loopholes. Transaction-level data supports better monitoring, forecasting, and policy analysis. Khan notes that the scale of growth in digital tax payments demonstrates the increasing willingness of taxpayers to embrace convenient, secure, and readily accessible digital channels for fulfilling their civic obligations.

However, there remains significant potential for semi-government, autonomous, and public-sector entities to migrate to digital payment channels. The ultimate goal is to create an integrated, transparent, and efficient government collection ecosystem where payments, settlement, reconciliation, and information are digitally connected.

The federal government is actively promoting digital payments, with Prime Minister Shehbaz Sharif chairing regular progress meetings on the digital economy to review measures for digitizing government transactions and addressing administrative bottlenecks.