SBP Clears Six Fintechs for First Regulatory Sandbox Cohort
The State Bank of Pakistan (SBP) cleared six financial technology companies to begin live testing in its inaugural regulatory sandbox. The January 2026 announcement formalizes the central bank’s initiative to stress-test open banking, remote merchant onboarding, and cross-border remittance infrastructure before granting full regulatory approval.
Cohort 1: Infrastructure and Open Banking
The first sandbox cohort prioritizes foundational payment rails and data structures over demographic-specific products. Three participants will test open banking interfaces under SBP monitoring:
- Neem Exponential Financial Services: A Banking-as-a-Service provider testing consent-based data access infrastructure. The firm currently manages financial flows for corporate clients including Leopards Courier and EFU Life.
- Digi Khata: A digital bookkeeping application exploring how alternative transaction data can generate credit histories for unbanked small business owners.
- Swich Retail: A retail-focused fintech testing merchant payment and transaction infrastructure.
Remittances and Merchant Onboarding
The cohort includes distinct approaches to cross-border payments and local market formalization. The participation of Saudi and UK firms indicates sustained foreign interest in Pakistan's overseas worker segment.
- Bank of Punjab: The sole participant testing remote merchant onboarding. The pilot evaluates methods to integrate informal traders into the formal banking sector without requiring physical branch visits or traditional paperwork.
- Barq Fintech: Backed by its Saudi Arabian parent company, which reports over seven million users, the firm holds an in-principle approval to operate as an Electronic Money Institution in Pakistan. It will test technology-enabled inward remittance flows.
- Taptap Send and United Bank Limited (UBL): A cross-border partnership pairing a UK-based remittance platform with a domestic bank’s local infrastructure and licensing.
The Sandbox Framework
Launched in May 2025 under the central bank's Vision 2028 strategy, the sandbox allows firms to operate in a controlled environment. The SBP temporarily relaxes specific licensing rules, allowing participants to test products with real users and capped transaction volumes for up to six months. A specialized Fintech Supervision Unit monitors all trials and evaluates the results to determine readiness for broader market rollout.
The regulatory sandbox provides a controlled, live testing environment in which selected companies can pilot new financial products with real users under direct SBP supervision before navigating the standard licensing process.
Looking Ahead to Cohort 2
The SBP expects to open applications for a second cohort later in 2026, establishing new testing themes. Founders operating in artificial intelligence credit scoring, insurance technology, or rural finance will need to monitor SBP channels for upcoming eligibility rules.