Raast vs Traditional Remittance Rails

Pakistan's Raast instant payment scheme is often compared with Interbank Funds Transfer (IBFT) and with the traditional remittance rails that dominate inbound Pakistan corridors. The comparison is useful but often imprecise, because the rails serve different functions in the payment stack. Raast is a domestic instant payment scheme; IBFT is a legacy domestic interbank transfer service; correspondent banking is a cross-border settlement architecture; and remittance operators are customer-facing products built on top of various combinations of those rails. A clean comparison needs to hold the layer constant. This article does that and sets out where Raast fits against the alternatives, where it does not yet reach, and how cross-border interoperability is likely to evolve.

Raast was launched by the State Bank of Pakistan in stages from 2021, with person-to-person functionality following the initial bulk payments release and merchant payments following after that. It is an ISO 20022-native, 24/7 instant payment scheme designed for low-cost, account-to-account and wallet-to-wallet payments between domestic participants. Raast is operated as public infrastructure, with SBP as the scheme operator and participating banks, microfinance banks and licensed wallet providers as members.

Adoption has been rapid. Transaction volume has grown multifold since launch, and Raast now accounts for a material share of domestic retail payment flow. The scheme's low-cost model — with SBP setting scheme fees at levels that do not carry the margin of the legacy IBFT rail — has been a structural advantage, and the integration of wallet providers alongside banks has given the scheme reach into the segment of the population that uses wallets rather than bank accounts as the primary financial relationship. A deeper view of the scheme and its integration economics is in our Raast integration guide and the Raast product page.

Raast's broader role in Pakistan's digital payments roadmap is covered in our State Bank of Pakistan digital payments article and in the Pakistan digital payments opportunity overview.

Holding the comparison to the domestic retail payment layer, Raast and IBFT are the two rails that matter. IBFT was Pakistan's legacy interbank transfer scheme, operated through 1-Link and NIFT, with per-transaction fees and availability tied to participating bank operating windows. IBFT served the market for many years but carries the architectural constraints of its era: limited richness of payment data, legacy messaging that predates ISO 20022, higher per-transaction costs than a modern scheme, and inter-bank cut-off windows that do not match the 24/7 expectation of modern digital commerce.

Raast addresses these constraints by design. Transactions settle in real time with finality in seconds. The scheme operates 24/7. Costs per transaction are materially lower. Messaging is ISO 20022-native, which supports richer compliance and reconciliation. Participant coverage extends beyond banks to licensed wallet providers, which broadens addressable reach. Where IBFT is incumbent in certain corporate and institutional flows, Raast is increasingly the default rail for retail, small-business and emerging corporate use.

Traditional remittance rails — money transfer operators, bank-to-bank cross-border wires, exchange houses — operate at a different layer. These are customer-facing products that handle the international leg of a payment, typically with cash or card funding on the sender side and a payout leg in the destination country. The payout leg is what connects back to Raast or IBFT: a modern remittance operator pays out into a beneficiary account or wallet through the destination-country rail. The question is which destination-country rail, and the answer is increasingly Raast.

The comparison that matters for a corridor operator is therefore not Raast versus traditional remittance rails as alternatives, but Raast as the payout layer of a modern remittance rail versus legacy bank wire or IBFT as the payout layer of a legacy rail. On that comparison, Raast wins on speed, cost and customer experience, and the gap is widening as coverage and functionality expand.

Correspondent banking sits at a third layer: the cross-border settlement architecture that moves value from the sender country to the recipient country before the destination-country rail takes over for payout. Correspondent banking remains the default for bank-to-bank high-value flows, but its architectural limitations — multi-day settlement, chain of intermediaries, opaque fees — are well understood and are the core case for the DLT-based settlement alternatives set out in our RTGS on DLT pillar.

Raast is a strong rail for its designed use case: domestic, account-to-account and wallet-to-wallet instant payments at low cost with rich data. Within that envelope it performs well and continues to expand coverage and functionality.

What Raast does not yet do is cross-border. A remittance from the UAE, the UK or the US to a Pakistani beneficiary cannot use Raast for the cross-border leg; it can only use Raast for the domestic payout leg once the value has arrived in a participating Pakistani institution. The cross-border leg has to use some other mechanism — correspondent banking, a regulated tokenised rail, a scheme-to-scheme bridge between instant payment systems, or a bilateral arrangement between scheme operators. Each has trade-offs, and the choice of mechanism is the single largest architectural decision in a modern Pakistan-inbound corridor, as discussed in the Pakistan corridor guide and the UAE-to-Pakistan corridor guide.

The cross-border gap is not a criticism of Raast specifically — it is a structural feature of instant payment schemes globally. Instant payment schemes are typically national or regional infrastructure, and cross-border interoperability is an adjacent build rather than a native property. The same is true of FedNow in the United States, FPS in the United Kingdom, UPI in India, PIX in Brazil and many others. The interoperability layer is where the near-term innovation cycle is concentrated.

Three patterns for cross-border interoperability of instant payment schemes are emerging.

The first is bilateral scheme-to-scheme bridges. Two scheme operators agree a technical and commercial integration, typically for a specific corridor, and route cross-border payments through the bridge with FX handled by designated providers. This model works well for high-volume, high-strategic-priority corridors but is slow to scale across the full set of corridors a country has.

The second is multilateral network arrangements, where a group of scheme operators or central banks builds a common settlement infrastructure that participating schemes plug into. This model is more scalable but requires multilateral governance and a common settlement substrate, and pilots have moved more slowly than bilateral arrangements.

The third is tokenised-rail-based interoperability, where a regulated stablecoin or wholesale CBDC acts as the cross-border settlement asset and connects into domestic instant payment schemes on each end. This model uses the DLT-based settlement architecture as the connector between two national rails, and it is the model that Bridge's corridor infrastructure is designed to support. It also relies directly on the combination of ISO 20022-native data and tokenised settlement to preserve data richness across the cross-border leg.

For a Pakistan-inbound corridor specifically, the tokenised-rail model pairs naturally with Raast on the payout end: a stablecoin or tokenised deposit settles the cross-border leg between licensed VASPs, and Raast delivers the payout to the beneficiary wallet or account near-instantly. The compliance leg runs across the stack using Bridge's identity and Travel Rule infrastructure. The overall flow compresses settlement from days to minutes at a cost profile competitive with any existing corridor model.

For a corridor operator, the comparison between Raast and traditional rails translates into two practical design choices.

The first is the payout rail on the Pakistan side. Raast should be the default, with bank account credit through legacy rails and cash-out options as complements rather than primaries. An operator that does not integrate Raast as a primary payout rail is structurally disadvantaged on speed and cost against those that do.

The second is the cross-border leg. A legacy correspondent-banking cross-border leg can still be wrapped with a Raast-based payout, but the architectural benefits of Raast are eroded if the cross-border leg takes two or three days to settle. A modern corridor should pair Raast payout with a modern cross-border leg — typically a regulated tokenised rail between licensed VASPs — so that the end-to-end flow matches the speed and data richness of the payout leg.

The broader point is that Raast changes what a Pakistan-inbound corridor can be. A decade ago, the best available corridor product delivered money to a beneficiary account in hours-to-days at a few percent all-in. Today, a well-designed corridor can deliver to a beneficiary wallet in minutes at a fraction of that cost, with richer compliance data, better reconciliation and a materially better customer experience. Operators that build for this architecture acquire a durable advantage over those that retrofit their existing stack.

If you are evaluating a Pakistan-inbound corridor and want to understand how Raast integrates into a modern end-to-end architecture — including the cross-border leg, the compliance stack and the partner selection — Bridge runs structured consultations with corridor operators, banks and fintechs entering the Pakistan market. Reach out via our consulting page or contact Bridge to arrange a session.