Lawmakers in Pakistan have raised strong concerns over rising SMS alert fees charged by banks. The issue was discussed in a Senate finance committee meeting today. Members questioned why customers pay far more than the actual telecom cost.
The meeting was chaired by Saleem Mandviwalla. It reviewed how banks price SMS banking alerts. Officials informed the committee that banks charge around Rs180 to Rs325 per month. This covers nearly 15 SMS alerts for most customers.
The Pakistan Telecommunication Authority chairman told lawmakers that the real cost is much lower. He said banks effectively charge up to Rs 12 per SMS. In contrast, telecom operators provide the same message service for only Rs1 to Rs2 per SMS. He also pointed out that some services, like BISP and Zarai Taraqiati Bank, offer much cheaper SMS systems.
Officials explained that banks usually do not buy SMS directly from telecom companies. Instead, they use third-party aggregators. As a result, costs increase significantly. Telecom officials added that operators sell SMS traffic to aggregators at around Rs2 per message. Transaction alerts are also priced higher because they are considered time-sensitive and critical.
Senators questioned this pricing gap during the session. Senator Abdul Qadir asked why customers continue to bear such high charges. He stressed that the difference between cost and retail pricing needs justification.
Deputy Governor of the State Bank of Pakistan, Dr. Inayat Hussain, shared detailed figures. He said banks collectively pay Rs25.6 billion each year to aggregators. At the same time, they recover around Rs18.7 billion from customers. A representative of the Pakistan Banks Association argued that outsourcing helps reduce system complexity. He also said in-house systems would cost more.
The committee also discussed Pakistan’s dependence on foreign payment networks. Lawmakers stressed the need to support local solutions like PayPak. Mandviwalla noted that Pakistan pays nearly $250 million every year in foreign exchange fees. These charges come from transactions processed through Visa and Mastercard systems.
Officials said PayPak is still growing in the market. Fewer than 5 million PayPak cards are in use. In comparison, around 90 million Visa and Mastercard cards are active in Pakistan. However, the State Bank said PayPak has now reached a 24 percent market share due to policy support.
Minister of State for Finance Bilal Azhar Kayani said the government is pushing digital payments. He said a high-level committee led by the prime minister is working on this goal. He added that digital points of sale have grown from 500,000 to 1.3 million.
The committee was also informed that QR code usage and local payment systems are being promoted. Officials said these steps aim to reduce dollar outflows. They also want to strengthen Pakistan’s digital payments ecosystem.
