The Critical Role of Payments in Pakistan to Increase Conversions

The uniqueness of Pakistan's payment ecosystem is critical for increased conversion rates for e-commerce and digital services, and payment strategies need to be targeted and optimised. Here are the key takeaways and solutions:

1. Localised payment coverage

• Must connect: 1Link (direct bank connection), JazzCash (largest mobile wallet), EasyPaisa (owned by Telenor)
• Supplementary: UBL Omni, HBL Konnect and other banking channels
• Note: Islamic Compliance Al-Huda Payment Options

2. Tiered settlement programme

   • Tier 1 Cities: Instant (Rate 0.8-1.21 TP3T)
   • Tier2 cities: T+1 settlement (rate 0.5-0.8%)
   • Remote areas: cash on delivery COD (20% deposit required)

3. Anti-fraud third-order authentication
   ① SIM Binding Authentication
   ② CNIC ID number verification
   ③ Biometric Biometric Threshold Dynamic Trigger

4. Religious Special Designs

   • Ramadan period:
     • Automatic splitting of "Zakat Charity" into separate calculations
     • Extension of payment validity to 72 hours during curfew hours
   • Separate checkout lane for Halal certified products

5. traffic-sensitive pricing

   • Jazz users' payment page with no traffic fee (Zero-rated)
   • Exclusive Nightly Bandwidth Offer for PTCL Broadband Subscribers

6. COD Innovation Programme:
Prepay 20% → WhatsApp order confirmation → GPS signing track tracking → NFC device on-site final payment swipe card

7.Data Insight Tools::
It is recommended that a localised analytics platform such as Finja SDK be deployed, which can be monitored:

• Income bracket corresponding to bank card BIN
• Carrier-associated consumer power grading
• Geographic characteristics of CNIC area code mapping

Implementation Effectiveness Cases:
After a Chinese cross-border e-commerce company accessed JazzCash, the abandonment rate dropped from 68% to 29%; after overlaying Ramadan's special page makeover, GMV grew by 3,40% in the same period.

Key Cognitive Difference Points:
Pakistani users trust operators' billing systems more than bank cards. It is recommended to prioritise deep integration of billing system with mobile operators, which has more than 3 times higher conversion rate than traditional card-based solutions.

Special attention needs to be paid to the new 2024 regulations: all cross-border collections need to be pre-registered with SBP with a Merchant Code (MCC), which takes about 7 working days to process.

Advanced Strategies for Payment Optimisation in Pakistan (cont'd)

8. Social e-commerce payment integration

E-commerce transactions in Pakistan are highly dependent on social media and need to be deeply embedded in social platform payment capabilities:

• WhatsApp Business Payments: Access to in-chat payments via API (locally registered entity required)
• Facebook Marketplace Collections: Support JazzCash/EasyPaisa Direct Billing
• TikTok Shop Closed Loop Programme: Work with a local licensed PSP (e.g. NayaPay) to circumvent foreign exchange controls

case (law): SHEIN uses Instagram shopping cart + EasyPaisa combo in Ba to reduce checkout time to 1 minute and 12 seconds.

9. Dynamic currency display technology

Avoid abandonment of orders due to exchange rate fluctuations:

• Real-time binding of SBP mid-price to show PKR amount (non-USD conversion)
• Tiered pricing strategy: display tax-inclusive prices for bank users such as UBL/MCB and tax-exclusive prices for mobile wallet users (utilising Section 236G differences in the PA tax code)

10. COD refined operational system (Key!)

Pakistan's COD share is over 60%, but the return rate is as high as 45%, and the whole process needs to be optimised:

numbers : Daraz increased COD conversion from 381 TP3T to 611 TP3T with this system.

11. ISP linkage billing innovations (breakthrough opportunity!)

Cooperation with Internet Service Providers (ISPs) on the "bandwidth credit" model.
① PTCL broadband subscribers - 5 hours free internet on spending of Rs. 2,000 or more
② Zong 4G users - installment payment directly deducted from the phone bill balance

Compliance Tips : A VAS Licence is required to be applied for from the PTA (90 days approval period).

12. BNPL Islamic Compliance Programme

The traditional staging was questioned by the Religious Commission, which recommended the following structure.
✅ Murabaha model :: Marking of the cost price of the goods + the amount of public profit (in accordance with article 2.5 of Sharia).
✅ Qard-e-Hasana clause : No interest is charged upon default but "overdue charitable donations" are collected to a designated mosque account.

Regulatory red line warning for 2024 🚨

1️⃣ SBP's new rule: 'Digital Merchant Whitelist' system comes into effect, unlisted websites to be blocked by ISPs
2️⃣ FBR Requirement: 17% income tax withholding on all cross-border receipts (6 month cycle of claiming tax refunds with DTAA documents)
3️⃣ PTA injunction: facial recognition verification threshold reduced from Rs 50,000 to Rs 20,000 transactions

List of recommended immediate actions.
☑️ JazzCash merchant back office opens 'Ramadan Accelerated Review Channel' (as of 15 March)
☑️ NADRA enrolment enterprise-level biometric verification access (reducing manual audit churn)
☑️ SBP FX code filing (F.E. Form VII updated quarterly)

Need an operations manual or contract template for a specific segment? I can provide actual agreement frameworks from headline companies like Daraz/Foodpanda.