Digital finance potential at $36 billion in Pakistan

The World Bank is disappointment on Pakistan’s cashless economy by estimating digital finance potential at $36 billion and projecting 7% boost to GDP with retail payments gateway.

Digital finance potential at $36 billion in PakistanWorld Bank Country Director for Pakistan Illango Patchamuthu said “To reveal Pakistan’s $36 billion digital finance potential, it will take high level commitment, faster payments gateway, lower costs, fast track licencing for fintech (financial technology) sector and digitalization of all government payments”.

He further said “Extensive use of digital payments in Pakistan offers 7% boost of GDP, can create 4 million jobs, mobilize payments over $250 billion and plan large parts of the cash for economy”.

Pakistan having the fastest growing internet using population, regardless using for online payments. Lack of literacy and heavy reliance on cash are delaying the growth of digital payments although access to internet connected devices is increasing as time passing.

He further said “A real time retail payments gateway and a booming fintech sector can accelerate the use of digital payments in Pakistan to at least 50 percent of the population by 2020”.  

About 213 million as half of the population of Pakistan is shifting towards digital payments within a year. If the government introduces a realtime payments gateway in Pakistan, the country will be beating the regional economies of countries like India and Indonesia.

Currently only 18% of population uses digital payments in Pakistan. It indicates that A Pakistani will make only one digital transaction per year as compared to 5 in India, 7 in Indonesia.

Ecommerce market size grew around 94 percent in this year which is more than Rs40 billion last year but the 90 percent of payment transactions were done through cash-on-delivery.

International payment gateways like Visa and Master card exist in Pakistan that facilitates the merchants for e-commerce transactions, both national as well as international level.

Ministry of information technology in collaboration with State Bank of Pakistan will approach PayPal and other payment gateways to confirm availability of international payment gateways in Pakistan.

The central bank planned to introduce faster payment gateway next year by saying that government payments, receipts and merchant payments to be the key elements in accelerating digitization of payments in the country.