KARACHI: Digital payments have changed the way corporations receive payments and also the way customers make payments.
In Pakistan, digital payment gateways have the potential to drive the nation into a period of the cashless market.
However, in Pakistan, digital payment methods are not fully developed yet. Notwithstanding, the State Bank of Pakistan provided the license of a digital payment system to more thana dozen companies.
World Bank Country Director for Pakistan Patchamuthu Illangovan is concerned about Pakistan digital payment system.
In a tweet, he said, “To unlock the $36-billion digital finance potential of Pakistan, it needs a high-level commitment, faster payment gateways, lower costs and fast-track licensing for the Fintech sector and digitisation of government payments.”
“Widespread use of digital payments in Pakistan can give a 7% boost to the gross domestic product (GDP) while creating four million jobs, mobilising over $250 billion in deposits and formalising large parts of the cash economy,” he stated.
He added, “Only 18% of the population utilises digital payments in Pakistan right now.”
On average, as per Illangovan, a Pakistani does only 1 digital transaction per year in comparison to 5 in India and 7 in Indonesia. However, he is quite hopeful that Pakistan can spur digital payment system.
Moreover, a real-time retail payment system along with a booming Fintech sector could stimulate the use of digital payments. It can boost it to at least 50%, he said.
Real-time payment systems
Karandaaz CEO Ali Sarfraz gave an interview to a private news channel. He said, “Karandaaz is working with the State Bank of Pakistan on micro-payment gateways, which will make payments from one platform to another easier and quicker.”
Besides, contemporary payment systems complete payments within 24 hours after a transaction is done, although the host gets the payment immediately.
Plus, Real-time payment systems will achieve this process in moments, which will spur the transactions. “Right now, this technology exists in only 10 to 12 countries,” said Sarfraz.
Sarfaraz said, “We are introducing a new function called directory function.”
“In this function, the mobile number, CNIC number and the name will be tagged with the account number, he said.” “Right now, they either have to receive a licence or approach a bank for partnership.” “it is a good time to invest and offer new services which the existing players are not offering currently.”
Although digital payments are rarely used in Pakistan, dozens of new companies are joining the market.
Additionally, digital payment systems are the need of the hour. Pakistan is already facing an economic catastrophe. Moreover, digital systems can ameliorate the economy.
Earlier, Pakistan has suffered a lot due to his lack of adaptation to modern technologies. Hence, at this juncture, Pakistan can’t afford to lag behind in digital payment economic systems.