The evolution of e-payments in Pakistan
Pakistan's e-payments evolution reflects its rapid transformation in the fintech space, and the following is a compendium of key stages and features:
1. Early stage (before 2000)
- cash-led: The economy is highly cash-dependent and bank penetration is low (only about 15% adults had bank accounts in 2010).
- Traditional banking system: A few large banks (e.g., HBL, UBL) provide basic services with limited e-enablement.
2. Laying the foundations of infrastructure (2000-2015)
- Bank cards and ATM networks::
- Visa/MasterCard was introduced in 2002 to promote the popularity of debit cards.
- The number of ATMs grew to about 14,000 (2021 data), but coverage remains uneven.
- Mobile Communications Explosion::
- Mobile phone subscriptions increased from 12 million in 2005 to 140 million in 2015, paving the way for mobile payments.
3. The rise of mobile payments (2016-2020)
- policy impetus::
- *National Financial Inclusion Strategy (NFIS.
4. Explosive growth and innovation (2021-present)
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Policy and Regulatory Breakthroughs::
- Raast Instant Payment System(Launched in 2021): State Bank of Pakistan (SBP)-led free instant money transfer system that is rapidly surpassing 30 million users (2023 data) and averaging Rs. 1 billion in daily transactions.
- Electronic Money Institution (EMI) Licence: Allow non-banking institutions to offer digital wallet services, spawning a number of fintech companies.
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Fintech ecosystem thrives::
- Mainstream payment platforms: such as JazzCash (over 40 million users) and EasyPaisa (over 25 million users) dominate, supporting bill payment, remittance, e-commerce and other scenarios.
- emerging player: Startups such as NayaPay and SadaPay are attracting young users through simplified KYC and cross-border payments.
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Cross-border and e-commerce driven::
- Alipay/WeChat Payment Access: The China-Pakistan Economic Corridor (CPEC) project is driving Chinese payment giants into the local market.
- E-commerce growth: Platforms like Daraz, Foodpanda, etc. drive digital payment penetration to ~251 TP3T (2023).
5. Challenges and future directions
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Existing problems:
- cash-dependent:: There is still a 60% population that prefers cash.
- network coverage:: 4G penetration in rural areas is less than 30%.
- regulatory friction:: Some innovative businesses need more flexible frameworks.
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future trends:
- CBDC Pilot: SBP plans to test central bank digital currency.
- Super App Integration:: Such as JazzCash expanding into credit, insurance, etc.
- Deepening financial inclusion:: Serving ID-less populations through biometrics.
(Quick overview of key data)
norm | 2015 | 2023 |
---|---|---|
Bank account penetration | ~15% | ~55% |
Mobile wallet users | <5 million | >80 million |
Electronic transactions as a percentage of GDP | <1% | ~7% |
Pakistan is reshaping the payments landscape with "leapfrogging", but the urban-rural divide and trust-building remain key battlegrounds. (Note: Some figures are industry estimates)