Pakistan Payments Market Trends (2025 Forecast)

The payments market in Pakistan has grown rapidly in recent years, driven by multiple drivers of digitisation processes, fintech developments and policy support. Below are the major current trends and key points:

1. The explosion of mobile payments and digital wallets

  • Growth drivers: Rising smartphone penetration (~50%), a high proportion of young population (60% under 30) and government encouragement of digitisation.
  • Major players::
    • JazzCash(under operator Jazz, with over 40 million subscribers)
    • EasyPaisa(Under Telenor, extensive coverage)
    • Alipay and WeChat Pay: Gradual penetration through the China-Pakistan Economic Corridor project.
  • Usage Scenarios: phone top-ups, bill payments, P2P transfers and small merchant transactions.

2. Increased bank account penetration

  • policy impetus: The State Bank of Pakistan (SBP) has launched the Financial Inclusion Initiative with the objective of increasing the account holding rate from 21% (2020) to over 50%.
  • Reflections of results::
    • The number of bank accounts increased from 55 million in 2018 to nearly 100 million in 2023.
    • The introduction of "Raast" (instant payment system) has accelerated real-time interbank transfers.

3. The rise of BNPL (buy now pay later)

  • Area of application: E-commerce, electronics, education instalments.
  • Representative companies::
    • QisstPay (local BNPL platform)
      -International companies such as Afterpay explore entering the market.

4. Opportunities for cross-border payments

China-Pakistan Economic Corridor boosts bilateral trade
Pilot expansion of RMB settlement to reduce dependence on the US dollar

Growth in remittance income
Diaspora remittances to reach $31bn by 2022, with digital channels increasing their share

Challenges and risks
1. Regulatory Uncertainty: E-money Institutions Regulations are not yet complete
2. Cash dependency: 70% transactions are still cash-based
3. Cybersecurity: Fraud cases grew at an average annual rate of 25%

future outlook
Digital payment scale is expected to exceed $30 billion by 2025, with a CAGR of 35%. biometric authentication and blockchain technology may become the next phase of focus.

5. Improvement of the fintech ecosystem

Pakistan's financial technology (FinTech) ecosystem is maturing rapidly, giving rise to a number of innovative payment solutions:

  • Open Banking Pilot: SBP plans to launch an open API framework to allow third-party developers to access the bank's systems and drive personalised financial services.
  • Embedded Finance (EF): E-commerce platforms (e.g., Daraz) and taxi apps (e.g., Careem) that integrate payment functionality to enable "scenario-based payments".

6. Policy support from Governments and regulatory bodies

  • Digital Pakistan Initiative (Digital Pakistan Vision): The goal is to achieve a cashless society by 2025, with measures including:
    • Tax relief on digital transactions;
    • Mandatory acceptance of electronic payments by large merchants;
    • Raast system extended to cross-border remittances.

7. Popularisation and standardisation of QR payments

  • Harmonisation of QR code standards:: The "1Link" network promotes standardised QR codes that are compatible with all major wallets and banking apps.
  • Increased adoption by micro and small merchants: Vendors, taxis, etc. are starting to use low-cost QR payment schemes.

Forecast of future technology trends

  1. Biometric Payments: Fingerprint/face authentication will replace some PIN verification.
  2. Stablecoin Application Testing:: SBP may approve compliance stablecoins for specific cross-border trade settlements.
  3. Agent Banking Expansion:: Serving rural users through offline outlets such as convenience stores and petrol stations.

Direction of Investment Concern
√ BNPL verticals (medical, agricultural equipment leasing)
√ Digital acquiring solution for MSMEs (Micro, Small and Medium Enterprises)
√ Blockchain Clearing System for Islamic Finance Compliance