Introducing Digital Payments in Pakistan.

Ahsan Jamal, Wemsol Private Limited: While the added use of smartphones in the country is paving way for the development of ecommerce and new mediums of payment, cash still remains the most preferred payment method.

Will there ever be a better time to introduce digital payments in Pakistan? It is hard to see when. While the industry may still be in its adolescence, such is the ripeness that a payment method, incorporating both, online, and offline, could do wonders.

The list of mediums missing in the payments industry could go on forever, although the highlights may include an ecosystem that allows for online payments to be made via debit cards and a localised PayPal equivalent. The fact that a localised e-payment gateway has been delayed is down to the popular cash-on-delivery (COD) method that most online businesses put to good use.

Since its inception, COD has been a major hindrance in the introduction of an e-payment system as it became a norm for most online businesses. Through the fiscal year 2014-15, debit cards seemed to be promising, with the number of issued cards having crossed the 25 million mark. On the contrary, the number of credit cards stands at just under 1.5 million, showcasing a rather gloomy picture.

As for EFT POS (point of sale) machines, the figure has gone up by 20%, crossing the 40,000 mark as banks manage the service across the country. Delightfully, as it may seem for many, the volume of paper-based transactions saw a 0.12% drop from 2015, although the value went up by 10%, with the figures being 362.04 million, and 127.16 trillion in 2016.

While the added use of smartphones in the country is paving way for the development of ecommerce and new mediums of payment, cash still remains the most preferred payment method. According to recent stats, over 80% of the Pakistani people own a mobile phone, and the figure is only likely to go nowhere but higher. Even with all the developments, a number of roadblocks still lie in the way of an effective e-payment system in the country.

It could be harsh to question the potential of NFC payments and other digital platforms, given how inclined a contemporary customer is towards smartphones. With immense security, availability on-the-go, and convenience, it remains nothing short of a fascinating prospect. Arguably, there has been a rise in the number of customers opting for digital payments, rather than conventional means, paving the way for a new trend in the industry, although it is yet to be seen on a large scale. The number is still significantly small, though implementing it in the right manner may lead to a different story.

One such player that intends to deliver comprehensive end-to-end payment solutions is Keenu. The service is tailored to facilitate connectivity for all stakeholders, such as banks, customers, telcos, and merchants. The programmes are already up and running, having partnered with several banks and merchants, complemented by a customer-centric approach.

Keenu, for the first time in the country, introduced NFC payment acceptance. The service, again, will be the first in the country, to allow users to make digital payments directly from their bank accounts, hence eradicating the need to carry paper-money. Amid other offerings, Keenu allows buyers to make in-store payments, and offers loyalty programmes for merchants, tailored to their own likings, with customers benefiting, thanks to the rewards.

Tapping into both plastic money and non-plastic money markets, the service wishes to empower customers, allowing them to make payments or purchases, virtually from wherever they want, without having to worry about the medium. With online payments rapidly gaining popularity, the gap is there for the company to exploit, although it must ensure all operations run smooth.

As for online-payment providers, it might as well be an uphill task to get the customers away from the mainstream cash-on-delivery, or any cash-based payment method to online payments. A sense of encouragement must also be generated by the gateway providers if they are to see any chances to acceleration in growth.