Pakistan as progressing nation is witnessing an emerging trend where people are embracing digital payments services.
Managing everyday finances can be a daunting task for more than three million estimated small and micro enterprises in Pakistan. Financial literacy stands at a low of 13%, which results in lack of financial freedom and friction points in daily transactions. Be it making bill payments, the society has been highly cash-dependent.
The international financial institution believes that there is immense potential in the digital transactions arena of the country and has committed $130 million for digital payments in Pakistan as part of the 2015 National Financial Inclusion Strategy.
Pakistan is one of the countries having the lowest financial inclusion ratios in the world. Currently, only 21% of the population has access to traditional banking services in the country, just 7% of whom are women. This seems a lot until we consider other countries, especially India, where the percentage is more than 80%. According to World Bank Country Director for Pakistan Patchamuthu Illangovan, an average Pakistani citizen performs just one digital transaction each year. In India, this number is five while in Indonesia, it is seven.
According to McKinsey Consulting, Pakistan’s digital financial market potential is almost $36 billion. Widespread use of digital payments can improve the GDP by 7%, creating four million jobs in the process and bringing more than $250 billion worth of deposits into circulation. Pakistan is one of the countries that are embracing change at a rapid pace.
The government as well as public and private sector organizations are initiating projects that enable a bigger proportion of the underserved segment. The State Bank of Pakistan (SBP) recently unveiled its national payment systems strategy, which introduces a new digital-focused framework to encourage the use of non-cash channels for payments in Pakistan.
Courtesy: Referral link