Pakistani banks are exploring cheaper ways to receive remittances from Europe and other international markets as they seek to attract overseas Pakistanis, reduce reliance on foreign money transfer companies, and earn more from cross-border transactions.
Remittances from European countries reached $5.22 billion in FY26, up from $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 preparing to adopt a direct-to-customer (D2C) model through partnerships with licensed fintech companies.
He said local banks and money transfer operators often earn relatively low margins under existing arrangements with international remittance providers. Their ability to reach European customers directly is also limited by a lack of technical infrastructure and local market presence.
Pedras said international money transfer companies retain a significant share of transaction fees, leaving Pakistani partner banks with a smaller portion for delivering funds to beneficiaries.
He believes technology-based alternatives could help local banks reduce their dependence on foreign intermediaries and retain a larger share of remittance revenue.
Major international operators serving Pakistan include Western Union, Ria, Wise, Remitly, and MoneyGram.
Pedras said Belmoney provides regulatory compliance and market access services to banks, money transfer operators, and digital wallets. The company is 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 partnerships could help them attract customers who currently send money through international operators such as Western Union, Ria, MoneyGram, and Wise.
The objective, he said, is to ensure that more remittance-related revenue stays within Pakistan’s banking system instead of going to foreign intermediaries.
Government Cuts Remittance Incentives
The government has also been spending billions of rupees to encourage overseas Pakistanis to use formal channels for sending money home.
It allocated Rs. 120 billion in subsidies for remittances in FY26, when inflows reached a record of approximately $40 billion.
However, the allocation was reduced to Rs. 16 billion for FY27. The government also introduced the Pasban Remittances Cash Reward Scheme to encourage overseas Pakistanis to use regulated money transfer channels.
Meanwhile, Pakistan is exploring technology-based payment systems, digital wallets, and regional payment platforms to make international transfers cheaper and easier.
Industry estimates suggest that using multiple low-cost remittance channels could generate annual savings of around $410 million, although the actual savings would depend on the scale of implementation.
Financial expert Ibrahim Amin said the SBP was working with the BUNA regional payment platform to facilitate remittances from Gulf Cooperation Council (GCC) countries.
He said the initiative could make it easier for overseas workers and other members of the Pakistani diaspora in Gulf countries to send money home.
Amin said the SBP, commercial banks, and fintech companies needed to work together to develop affordable digital remittance services. He also stressed the need for greater coordination between banks, Pakistani embassies, and consulates to reach overseas communities.
He said banks must offer convenient services, competitive charges, and incentives to compete with informal Hawala and Hundi networks and encourage more overseas Pakistanis to use regulated channels.
The post Cheaper Money Transfers Announced for Overseas Pakistanis appeared first on ProPakistani.
