Digital Payments vs COD in Pakistan 2026: What SBP's Latest Data Means for Online Sellers

Pakistanis pay digitally for everything except your parcel

The digital payments vs COD question in Pakistan has a strange answer in 2026. According to the State Bank of Pakistan's payment systems review for January to March 2026, 3.7 billion retail payments worth Rs 168.8 trillion went through banks and payment companies in that quarter, and 92% of them were digital: mobile apps, internet banking, ATMs, POS machines, e-commerce and IVR.

Yet when the same people order from an online store, most of them still choose cash on delivery. In a June 2026 study by OrderNation of about 170,000 orders at one large Pakistani online retailer, 94.5% of orders were COD and only 1.6% were paid digitally in advance.

So the habit of paying by phone already exists. What is missing is the habit of paying a store in advance. This post puts the SBP numbers side by side, a year apart, and turns them into a few practical moves for a Pakistani Shopify seller.

The numbers: one year of digital payments in Pakistan

The table below compares the January to March quarter of 2025 with the same quarter of 2026, using SBP's reviews and news reports of them. The last column is our own calculation.

Three more figures from the 2026 quarter matter for sellers. Raast person-to-merchant payments rose from 36.3 million in the previous quarter to 55.9 million. QR merchant payments grew 41% in number and 63% in value over the previous quarter, across about 2.5 million QR-enabled merchant locations. And the number of e-commerce merchants taking digital payments grew 92% in a year, to 17,554.

What the numbers say, read from a seller's side

• Wallets beat cards by a mile. Of the roughly 450 million online purchases paid digitally in the quarter, about 96% were paid from a bank account or wallet and only about 4% by card. If your store only offers card checkout, you are offering the payment method fewest Pakistanis use online.
• Paying a merchant by phone is becoming normal. Raast person-to-merchant payments jumped by more than half in a single quarter, and QR payments at shops are growing fast. Every time a customer pays a shopkeeper by QR, paying a store in advance feels a little less strange.
• The money is small next to the habit. Online purchases by account or wallet were worth Rs 0.47 trillion in the quarter, a tiny slice of Rs 168.8 trillion in retail payments. Digital checkout is growing fast from a small base. It will not replace COD this year.
• The gap is trust, not access. People who pay their bills, mobile top-ups and friends by app still pick COD for an unknown store. They are not short of a way to pay. They are protecting themselves against a store that might not deliver.

One caution: SBP's online purchase figures cover every kind of online payment by account or wallet, not only orders from online stores. They show the direction of habits, not the share of Shopify orders paid in advance.

Why a prepaid order is worth more to you than a COD order

The OrderNation study shows the cost of that trust gap. COD orders were cancelled 37.3% of the time, against 2.8% for prepaid orders. Of the COD parcels that did ship, about 19.4% of order value came back as RTO. The study covers one mobile-accessories retailer, so treat it as a benchmark, not a national average.

Example (illustrative numbers, not real store data). You spend Rs 60,000 on ads and get 100 orders at Rs 3,000 each. Shipping is Rs 250 forward and Rs 250 back. Using the study's rates:

The prepaid column is a best case: prepaid customers can still return items, and the study does not report their return rate. But even if you only move a few customers to prepaid, each one saves you the risk of a wasted round trip and makes your ad spend go further. That is why a discount of Rs 100 or Rs 150 for paying in advance can pay for itself on a Rs 3,000 order. Work it out with your own margin and courier rates before you set the number.

What to do this week

1. Add a wallet or bank-transfer option at checkout, not just cards. Easypaisa, JazzCash or a Raast-enabled bank transfer matches how Pakistanis actually pay online. Keep COD available; do not force prepayment.
2. Offer a small, clear reason to prepay: a fixed rupee discount, free delivery or faster dispatch for prepaid orders. Put it next to the payment options, not hidden in the footer.
3. Ask for advance delivery charges only where returns hurt most. Pull your return rate by city and product, and ask for the delivery fee in advance (by wallet or Raast) only for the worst cities or highest-risk items.
4. Answer the trust question on the product page. Show a real phone or WhatsApp number, your return policy in plain Urdu and English, and what happens if the parcel does not arrive. This is what the COD customer is really asking.
5. Track prepaid share as a weekly number. Prepaid orders divided by all orders, next to your RTO rate. If prepaid share rises and RTO falls, your changes are working.

For step 3 you need return rates by city and product. RabbitROI shows RTO rates by courier, city and product, and net profit per ad campaign after returns, so you can see where advance payment would save the most.

What to watch next

SBP publishes its payment systems review every quarter, so the April to June 2026 numbers are the next ones to look for. Three lines are worth checking each time: online purchases by account or wallet, Raast person-to-merchant payments, and QR merchant payments. If they keep growing like this, the share of shoppers willing to prepay a store they trust will keep rising too.

COD is not going away in Pakistan any time soon. But the sellers who make prepaying easy and safe now will have lower return costs and cheaper paying customers when the habit catches up.

FAQ