Pakistani banks are preparing to offer cheaper money transfer services to overseas Pakistanis through partnerships with fintech companies, aiming to compete with international operators such as Western Union, Wise, Ria, and MoneyGram.
The move is intended to help banks attract more customers, reduce transfer costs, and retain a larger share of the revenue generated by remittances.
Remittances from Europe reached $5.22 billion in FY26, compared with $4.54 billion in FY25 and $3.85 billion in FY24, according to the State Bank of Pakistan (SBP).
Germany, France, the Netherlands, Italy, Spain, Sweden, Greece, Denmark, Belgium, and Ireland are among the major sources of these inflows. An estimated 1.2 million to 1.5 million Pakistanis live across these countries.
Speaking exclusively to ProPakistani, Bruno Pedras, Founder and CEO of Belmoney, said Pakistani banks were looking to adopt a direct-to-customer (D2C) model by partnering with licensed fintech companies.
He said local banks and money transfer operators currently earn relatively low margins because they depend on international remittance providers to access overseas markets.
These international companies handle much of the transaction process and retain a significant share of the processing fees. Local banks generally receive a smaller portion for delivering the money to beneficiaries in Pakistan.
Pedras said partnerships with technology companies could help Pakistani banks reduce their dependence on foreign intermediaries and improve their earnings.
Belmoney provides regulatory compliance and market access services to banks, money transfer operators, and digital wallets. Pedras said the company was integrating its services with one of Pakistan’s largest digital wallets, with the integration expected to go live soon.
He added that several Pakistani banks had also signed agreements with Belmoney. These arrangements could allow local banks to attract customers who currently use Western Union, Ria, MoneyGram, and Wise to send money to Pakistan.
Pedras said the aim was to ensure that more remittance business benefited Pakistani banks and digital wallets rather than foreign service providers.
Government Reduces Remittance Subsidies
The government has also been spending billions of rupees to encourage overseas Pakistanis to send money through formal channels.
Pakistan allocated Rs120 billion in subsidies to support remittances in FY26, when inflows reached a record of approximately $40 billion.
However, the allocation was reduced to Rs16 billion for FY27. The government also introduced the Pasban Remittances Cash Reward Scheme to encourage overseas Pakistanis to use regulated channels.
Alongside these incentives, the government and financial sector are exploring digital wallets, regional payment platforms, and other technology-based systems to reduce the cost of international transfers.
Industry estimates suggest that using multiple low-cost channels could save around $410 million annually. However, the actual savings would depend on how widely these systems are adopted.
Financial expert Ibrahim Amin said the SBP was also working with the BUNA regional payment platform to facilitate remittances from Gulf Cooperation Council (GCC) countries.
He said the initiative could make sending money to Pakistan easier for overseas workers and other members of the Pakistani community in the Gulf.
Amin said the SBP, commercial banks, and fintech companies needed to work together to develop cheaper and more convenient money transfer services.
He also called for greater coordination between banks, Pakistani embassies, and consulates to reach overseas communities.
According to him, banks need to offer competitive charges, convenient services, and attractive incentives to compete with informal Hawala and Hundi networks and bring more remittances into the regulated financial system.
