Instant Payments Pakistan: Rails, Fees, and the Lightning Network (2025)

Key Facts for Pakistan

Primary real-time rails: Raast.
Typical settlement times: Payments clear in seconds.
Common limits: Varies by institution.

What “real-time payments” means in Pakistan

In Pakistan, “real-time payments” refers to the instantaneous, 24/7 transfer of funds between individuals, businesses, and government entities through the Raast instant payment system. The scope primarily covers small-value retail payments, including peer-to-peer transfers and person-to-merchant transactions, with functionality for bulk disbursements like salaries and pensions. This system is designed for universal access across all financial institutions, from major banks to fintechs. While its operational parameters are well-defined, there is no formal legal definition of “real-time payments” within the country’s regulatory framework.

The State Bank of Pakistan (SBP) is the lead regulator and operator of the Raast system. The central infrastructure is managed directly by the SBP, with no subsidiary clearing houses involved (industry norm). While the specific messaging protocol is not publicly detailed, many modern real-time payment systems are built on the ISO 20022 standard to support rich data and interoperability (industry norm). This structure gives the central bank direct oversight of the country's critical payment infrastructure, ensuring stability and security for all participants.Pakistan's system incorporates features common to advanced real-time payment infrastructures globally, positioning it to accelerate the country's shift toward a digital economy.

Payment Rail Overview

Raast

Introduced on January 11, 2021, Raast is Pakistan's first national instant payment system, operated by the State Bank of Pakistan. It facilitates real-time, end-to-end digital payments among individuals, businesses, and government entities. The system functions through a modern central infrastructure that connects all financial institutions, allowing users to send and receive funds in seconds using simple aliases like mobile numbers, known as Raast IDs.

Instantaneous Payments: Funds are transferred and settled in near real-time, 24/7, across the entire network of participating institutions.
Low-to-No Cost: The system operates on a cost-recovery model, which translates to free or very low-cost transactions for end-users.
Sector-Wide Interoperability: A single point of connection to the central infrastructure allows any financial institution to transact seamlessly with any other.
Simplified Addressing: Users can link a mobile number as a Raast ID to their bank account, removing the need to share complex IBANs for transfers.
Enhanced Security: As a central bank-regulated platform, it provides robust data protection, transaction authorization, and fraud detection services.
Bulk Payments: The infrastructure is equipped to handle large-volume batch payments, such as salary disbursements, pension payouts, and social welfare distributions.

Pros:

Free for person-to-person transfers, promoting widespread adoption.
Drives financial inclusion by making digital payments accessible to underserved populations.
Reduces the economy's reliance on cash, increasing transparency.
Backed and secured by the State Bank of Pakistan, providing high reliability.

Cons:

Adoption can be hindered by digital literacy gaps and inconsistent internet access in remote regions.
The growth in transaction volume attracts a higher risk of phishing and other cyber fraud.
A single bank account can only be linked to one Raast ID at a time.
Some cultural resistance to digital finance in favor of cash transactions remains a challenge.

Limits, Fees, and SLAs

R2P Fees: None. Request-to-pay transactions are free for end-users.
Operating Hours: The system operates 24/7, processing payments in seconds across all participating institutions with no specified cut-off times.
Failures & Returns: If a confirmation message fails, users should contact their provider’s helpline to verify the transaction’s status.

Compliance and Risk

KYC/KYB & AML

Financial institutions must adhere to strict AML/CFT regulations overseen by the SBP and Financial Monitoring Unit. This framework requires a risk-based approach, mandating customer due diligence, ongoing transaction monitoring, and screening all parties against national and international sanctions lists.

Data Residency & Privacy

While specific data residency laws are not publicly detailed, the regulatory framework emphasizes secure data handling. Raast is built with protection features, and financial institutions are subject to strict data retention policies, though specific localization mandates are not defined.

Fraud Controls

The framework mandates robust fraud controls, integrating secure payment authorization with broader AML compliance. Financial institutions must perform ongoing transaction monitoring, conduct enhanced due diligence for high-risk clients, and report all suspicious activity directly to the Financial Monitoring Unit (FMU).

Recordkeeping & Audits

Regulations impose strict recordkeeping standards, requiring financial institutions to maintain all customer and transaction data for a minimum of ten years. Firms must also establish a strong internal control framework, which includes an independent audit function to review compliance regularly.

Lightning Network Integration as a Solution

The Lightning Network is a second-layer protocol built on Bitcoin that processes transactions off-chain for near-instant speed and minimal cost. While domestic RTP rails like Raast excel at national payments, the Lightning Network can act as a global bridge. It extends real-time payment capabilities across borders, handling international remittances and micropayments that local systems are not designed for, creating a powerful combination for universal money movement.

Both systems offer comparable settlement speeds, processing payments in seconds for negligible fees—often free for Raast users and fractions of a cent on Lightning. The primary distinction is reach. While Raast provides comprehensive interoperability within Pakistan, the Lightning Network operates as a borderless system. It facilitates immediate, low-cost payments to anyone with an internet connection globally, removing the friction of traditional international transfers.

Cross-Border Complexity: It bypasses traditional intermediaries, removing the high fees and delays common in international remittances and currency conversions.
Scalability Limitations: By processing transactions off-chain, it supports millions of payments per second, overcoming the throughput constraints of the main Bitcoin blockchain.
Prohibitive Transaction Costs: It reduces fees significantly, making micropayments for digital content, gaming, or tipping practical and economical.

Integrating the Lightning Network offers a pathway to building a truly global and inclusive payment infrastructure.

B2B Enterprise Use Cases

Supplier Payments – Businesses can pay international suppliers instantly, bypassing slow and expensive correspondent banking networks. Business value: Reduces cross-border transaction fees and settlement delays from days to seconds.
Merchant Settlement – Retailers receive customer payments directly and immediately, avoiding multi-day settlement holds from card processors. Business value: Improves daily cash flow by providing instant, final access to sales revenue.
Treasury Optimization – A corporate treasury moves funds between global subsidiaries in real-time to manage working capital efficiently. Business value: Offers real-time global liquidity and minimizes foreign exchange conversion costs.
Payroll – Companies can execute salary payments to a distributed international workforce with a single, instant transaction. Business value: Simplifies global payroll with immediate, low-cost salary disbursements across borders.
Creator Payouts – Digital platforms can send automated micro-payouts to content creators globally as their work is consumed. Business value: Introduces new monetization models based on per-use or per-view payments.

Cross-Border Transactions and Remittances to Pakistan

Cross-border payments are inherently complex, requiring “rail bridging” to connect separate domestic payment systems. This involves navigating inefficient foreign exchange (FX) paths, which are often slow and expensive. For Pakistan, these hurdles have driven a large portion of remittances to informal channels offering better rates but creating economic instability. The recent integration of Pakistan's Raast system with the Arab region's Buna network aims to formalize these flows, creating a more direct and cost-effective payment corridor.

Arab Countries: This region accounts for about 55% of Pakistan's total remittances, with annual flows exceeding $20 billion. The new Buna-Raast linkage is designed to capture these flows within formal channels, reducing costs and processing times.
Saudi Arabia: As one of the top two sources of remittances, funds from Saudi Arabia are a critical source of foreign exchange for Pakistan. These transfers are primarily sent by Pakistani laborers supporting their families back home.
United Arab Emirates (UAE): The UAE is the other primary remittance corridor, with Dubai also acting as a major hub for informal currency exchange. The government has been working to redirect these flows from illegal channels into the formal banking system.

The Lightning Network provides a global settlement layer, converting disparate real-time payment systems into a single, interoperable network. By using Bitcoin as a bridge asset, it bypasses traditional banking friction, executing international payments in seconds for a fraction of a cent.

How Lightspark Makes Integration Easy

Lightspark helps fintechs, digital banks, wallets, and exchanges connect to the Lightning Network without the operational overhead. We abstract away the complexities of node management, dynamic liquidity, and optimized routing, allowing you to focus on your core product. Our platform provides robust developer tooling for quick integration and a comprehensive compliance framework to support your business needs for global payments. With our enterprise-grade infrastructure, you can achieve sub-second settlement globally, opening new markets and payment corridors for your customers. Ready to build the future of money movement? Talk to our team.

Instant Payments Pakistan : Rails, Fees, and the Lightning Network