It’s been an extraordinary journey witnessing the transformation of Pakistan from a cash-dependent society to a rapidly growing hub for digital payments and financial technology.
It’s been an extraordinary journey witnessing the transformation of Pakistan from a cash-dependent society to a rapidly growing hub for digital payments and financial technology.
As someone who has closely observed this evolution, I can say with confidence that the progress we’ve seen over the last two decades is nothing short of remarkable.
I remember the late 1990s when Pakistan’s payment landscape was deeply rooted in a cash-driven economy. PayPal had just been launched globally in 1998, but in our part of the world, cash was still the king. In fact, cash was the entire kingdom. It was a time when the idea of branchless banking was still inconceivable to the hard-working, everyday Pakistani.
Fast forward to 2008, when Easypaisa, Pakistan’s first digital wallet, was launched. It was a bold step toward financial inclusion, especially considering that a significant portion of our population remained unbanked, and digital literacy was still in its infancy. The reality, however, was that Pakistan was not yet fully ready to embrace this branchless banking innovation.
The backbone of Pakistan’s economy has always been its micro, small, and medium enterprises (MSMEs), which make up 90 per cent of all businesses and contribute nearly half of the country’s GDP. However, for decades, these businesses were hampered by their dependence on cash, limiting their growth potential. The shift toward digital payments represented a pathway to overcoming these obstacles, opening new horizons for MSMEs, and aligning them with the global digital economy.
Even as we celebrate the progress we have made, we must acknowledge the challenges that remain. Women-led MSMEs, in particular, face unique challenges. Marginalised and underrepresented in policy forums, these businesses are further hindered by societal norms that restrict their mobility and ability to conduct business.
The fact that roughly 53 per cent of Pakistan’s adult population remains financially excluded is a testament to the work that still needs to be done. A large portion of our population lacks not only access to financial products but also the basic skills needed for money management. Concepts like budgeting, online payments and investing are still novel to many.
But there is hope on the horizon. Increased collaboration between banks and fintech companies has made it easier for customers to use digital channels for payments, gradually shifting the needle away from cash. Platforms like foodpanda, Careem, Daraz, to name a few, have all integrated digital wallets and payment options to facilitate users like never before, encouraging them to adopt online payments seamlessly.
The future success of digital payments in Pakistan relies on engagement, inclusion, and representation. Building trust in responsible digital payments, especially among women merchants and MSMEs, is fundamental. We need scalable use cases that can drive the adoption of digital payments and ensure their financial viability.
As we move forward, it’s clear that Pakistan’s journey toward a digital economy is far from over. But the progress we have made is undeniable. With continued efforts, I believe that Pakistan is well on its way to becoming a fully digital economy that is inclusive, resilient and ready to face the challenges of the future.
In many ways, our journey toward digital payments mirrors our journey as a nation. Just as we have faced the complexities of being recognised as an emerging market, we are now exploring the intricacies of building a digital economy. And while the road ahead may be long and filled with challenges, I have no doubt that we will emerge stronger, more connected, and more prosperous than ever before.
The writer is head of fintech at foodpanda Pakistan.
