SBP: Shops Can Refuse Contactless Payments
The State Bank of Pakistan cannot force shops to accept contactless payments made through phones, smartwatches and other wearable devices, because merchants do not fall under its direct regulation. The central bank has confirmed the position to ProPakistani, settling a question that has grown as more stores limit tap-to-pay.
Several shops have stopped accepting or restricted NFC payments made through digital devices, creating a grey area for shoppers. Many of the same stores still accept contactless debit and credit cards. The central bank says it cannot direct sellers to restore phone-based contactless payments or require them to support any one payment method.
What the SBP said about contactless payments
The State Bank told ProPakistani that it does not regulate merchants and cannot direct them to accept any particular payment method. That means the decision to accept a tap from a phone or a watch rests with the shop, even when the payment system behind it supports the transaction.
The clarification matters because contactless payments have become routine in Pakistan’s cities. Shoppers tap a card or a phone at supermarkets, petrol stations and restaurants, and many now leave their wallets at home. When a store refuses a phone payment but takes the same card in plastic form, the shopper gets no clear answer about who sets the rule. The central bank’s answer is that no regulator sets it. The merchant does.
Who pays if a tap-to-pay transaction goes wrong
The central bank has also clarified how liability is decided when a PIN-free contactless payment is disputed as fraudulent. Payment schemes such as Visa, Mastercard and PayPak run their own liability and dispute-resolution frameworks, which cover customers, merchants and acquiring banks.
Responsibility is decided case by case, on the actions, omissions or negligence of the parties involved. Liability is not assigned to the customer or the merchant automatically whenever a contactless transaction is disputed. The State Bank said these scheme rules set out the rights and responsibilities of all parties and are designed to protect customers.
The Rs3,000 limit for PIN-free payments
The central bank has also settled the maximum amount allowed for contactless transactions without a PIN. ProPakistani has confirmed the current PIN-less limit in Pakistan is Rs3,000, rather than Rs3,500.
The figure matches the State Bank’s own rule from 2021, which lets shoppers pay up to Rs3,000 by tapping a card on a point-of-sale machine without entering a PIN. Banks may set a lower limit under their own risk policies, so the exact ceiling can vary from one bank to another.
What shoppers can do when a store says no
For shoppers, the ruling leaves a practical gap. A phone or watch payment can be refused at the till even when the card behind it would work. The simplest fallback is the physical card itself, which most stores that take contactless payments still accept.
Shoppers can also pay through Raast QR codes, the State Bank’s free instant payment system, or use cash where the store accepts it. Islamabad is set to go fully cashless by December, and the government has extended a subsidy on Raast QR payments to push shops towards digital options. Even so, a subsidy does not force a shop to accept any one method.
Pakistan’s payment infrastructure has moved faster than the rules around it. Digital wallets are now built into shopping and banking apps, and online shopping keeps growing, with cash on delivery still common. The clarification draws a clear line: the central bank regulates banks and payment systems, not the shops at the end of the chain.
Frequently asked questions
Can a shop in Pakistan refuse a contactless payment from a phone?
Yes. The State Bank says merchants are not directly regulated by it, so it cannot force a shop to accept tap-to-pay from a phone, smartwatch or other wearable device.
Does the same rule apply to contactless cards?
A shop may refuse any payment method it does not wish to accept. In practice, many stores that restrict phone payments still accept contactless debit and credit cards.
What is the PIN-free limit for contactless payments in Pakistan?
Rs3,000. The State Bank confirmed the limit, which has applied since its 2021 rule on tap-to-pay. Banks may set a lower limit under their own policies.
Who is responsible if a contactless payment is disputed as fraud?
Liability is decided case by case under the rules of the payment scheme involved, such as Visa, Mastercard or PayPak. It is not assigned to the customer or the merchant automatically.
What can I do if a store refuses my phone payment?
Use the physical card, pay through a Raast QR code, or use cash. The store is entitled to choose which payment methods it accepts.
