SBP Introduced 2 Hour Cooling Time for Mobile Banking Transactions to Prevent Fraud

In an age where mobile banking has revolutionized financial access in Pakistan, the State Bank of Pakistan (SBP) has taken a significant step to balance convenience with security. The central bank has announced the implementation of a two-hour “cooling-off period” for all mobile and branchless banking transactions — a move designed to protect millions of users from growing cases of digital payment fraud and mistaken transfers.

This regulatory shift marks a crucial moment in Pakistan’s financial technology landscape. While digital payments have surged to record highs, so too have scams, unauthorized transfers, and phishing attempts. With this two-hour buffer, the SBP hopes to restore confidence among users and encourage safer digital finance adoption across the country.

Why the Cooling Time Policy Was Introduced

Over the past few years, Pakistan has witnessed an explosive rise in mobile banking and digital wallet usage. Services like Easypaisa, JazzCash, NayaPay, and Sadapay have transformed how people pay bills, transfer money, and shop online. However, this growth has also created opportunities for cybercriminals.

According to the State Bank of Pakistan’s Annual Payment Systems Review, mobile banking transactions in Pakistan crossed Rs. 25 trillion in value during the last fiscal year — a figure that highlights both progress and risk. Reports of fraudulent transactions, social engineering scams, and accidental fund transfers have become increasingly common.

Until now, once a digital transfer was completed, reversing it was nearly impossible. Even if a user realized they had sent money to the wrong number or fell victim to a scam, banks often lacked mechanisms to halt or recover the funds.

This gap — between speed and security — prompted the SBP to introduce the two-hour cooling-off period, giving users time to react before the transaction is finalized.

How the Two-Hour Cooling Time Works

Under this new framework, once a user initiates a mobile banking transaction, the transferred funds will remain temporarily locked for two hours before they become accessible to the recipient.

During this window:

The sender can report a suspicious or mistaken transfer to the bank or mobile wallet provider.
The financial institution can flag and block the transaction if fraud is suspected.
The recipient cannot use or withdraw the funds until the two-hour holding time expires.

This small delay, according to SBP, acts as a “security cushion” — a critical time frame that allows potential fraud victims to intervene before permanent loss occurs.

Impact on Consumers and Mobile Banking Platforms

The policy’s immediate impact will be felt by both users and service providers. For consumers, especially those accustomed to instant transactions, a two-hour delay may initially seem inconvenient. However, the trade-off is worthwhile — as it dramatically reduces the chance of irreversible fraud.

For financial institutions and mobile wallet operators, this policy requires significant backend changes. Platforms must now:

Introduce transaction status updates (e.g., “Pending in Cooling Period”).
Create responsive customer service channels for blocking or reporting fraud.
Maintain transparent communication to ensure users understand the delay.

Platforms such as Easypaisa and JazzCash are already reported to be testing software upgrades to comply with SBP’s new directive. For most users, the difference will be visible through a short delay notification and improved safety features.

Balancing Convenience and Security

Digital banking thrives on one word: speed. People embraced mobile banking because it allows them to send money instantly — anytime, anywhere. So, the question naturally arises: Will this two-hour rule slow down Pakistan’s digital payment momentum?

Experts believe it won’t. Instead, it could strengthen user confidence in digital systems over the long term. When users know they have a short window to reverse an error or stop a scam, they feel more in control — and that sense of trust is essential for any financial ecosystem.

According to financial analysts, fraud prevention measures like this often lead to more transactions over time, not fewer. Countries like Singapore, the UK, and Malaysia have similar “fraud prevention windows” in digital payments — and in each case, fraud incidents declined sharply without affecting transaction volumes.

Challenges Ahead

While the intent is commendable, implementing this regulation won’t be without challenges.

Operational Load on Banks:
Customer service centers must handle increased volumes of fraud or reversal requests within short time frames.
User Education:
Many users in rural areas or low-literacy segments may not fully understand what a “cooling time” means. Miscommunication could lead to frustration.
Business Transactions Impact:
For merchants who rely on instant payments — such as ride-hailing drivers, delivery couriers, or e-commerce sellers — a two-hour delay could temporarily affect cash flow.

To address this, the SBP may introduce tiered transaction categories in the future — instant transfers for verified business accounts, and cooling periods for regular consumers. This hybrid model has worked successfully in other markets.

A Step Toward Safer Digital Finance

Despite initial concerns, experts agree that SBP’s two-hour cooling period is a forward-thinking, consumer-centric measure. It demonstrates that Pakistan’s central bank is not just promoting financial inclusion but also ensuring user protection.

Fraudulent mobile transactions are not just financial crimes — they erode trust in digital banking. Each scam pushes people back toward unsafe cash transactions. By introducing this buffer, the SBP is signaling that digital security is as important as digital access.

The move also complements other initiatives such as:

Cybersecurity awareness campaigns for mobile users.
Mandatory two-factor authentication for online payments.
Stronger KYC (Know Your Customer) verification for new wallet accounts.

As the financial ecosystem evolves, these layers of protection will collectively make Pakistan’s digital economy more resilient.

What Consumers Should Do Now

If you use mobile banking or wallet services in Pakistan, here’s what you should keep in mind:

Be patient: The two-hour delay is for your own protection.
Double-check recipient details before confirming a transfer.
Report immediately if you notice suspicious transactions — the sooner you alert your provider, the easier it is to block the funds.
Update your app to ensure it supports the new SBP regulations.
Avoid sharing OTPs or account credentials, even if the caller claims to be from a bank.

Remember: technology can only protect you if you stay alert.

Conclusion

The State Bank of Pakistan’s new two-hour cooling time for mobile banking transactions is more than a regulatory adjustment — it’s a statement of intent. It shows Pakistan’s commitment to building a safe, secure, and inclusive digital financial future.

While it may take some time for users and businesses to adapt, this measure could be a turning point in restoring trust in mobile payments. As digital banking continues to grow, so must the safeguards that protect it.

For full details on the policy and its implementation, you can visit the Positive Pakistan – SBP Introduces 2-Hour Cooling Time

SBP Introduced 2 Hour Cooling Time for Mobile Banking