A Dawn Article.


Cracking the Code

Four disruptions are changing the nature of payments in Pakistan.


We have entered an era of strong tailwinds for the payments industry. Inventions such as ATM and credit cards launched in the 1980s and 1990s, internet banking services and more recently mobile banking and payment services have changed the way financial services are being delivered, and the people delivering them.

In five years, based on five major disruptions the interface between consumers and financial services will change the cash-to-digital ratio from 95:5 to 65:35 in favour of digitalisation, and here’s how:

Digitisation of merchant payments: Pakis­tan sells an estimated two million smartpho­n­­es every month. This number will take smartphones to nearly 60m by the end of next year. These $50 devices are the mobile point of sale solutions of the future. They will replace conventional mobile POS machines and ATMs on electronic payments and non-card alternatives. The 200,000 branchless banking touch points in just six years speak volumes for transformational banking, compared with the three decades it has taken to instal 40,000 mobile POS’s and 10,000 ATMs in the country.

In addition to the branchless banking network, a third-party sector of FinTech startups, grocery chains, pharmaceuticals, insurance, and courier companies is beginning to equip their networks with low-cost tablets and smartphones to serve consumers on payments. We are seeing the advent of a new paradigm with distinct networks conglomerating to plug into the foray of payment services. A wave of e-merchants is also coming up on the e-commerce front, an industry anticipated to be worth $5 billion in 2020. Imagine the impact of digitising a mere 50pc of cash on delivery for a market that size.


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