Visa targets major expansion in Pakistan’s digital payments landscape

KARACHI: Visa aims to increase the number of businesses in Pakistan that accept digital payments tenfold, as the rise in adoption of these payments will significantly impact the country’s economic growth.

“Visa’s Commercial Landscape assessment identified approximately 28 million total businesses in Pakistan, of which 7.5 million are addressable for digital payment acceptance in the short-to-medium term,” Umar S Khan, Visa’s country manager for Pakistan and Afghanistan, told The News in an interview.

“Our goal is to increase business acceptance tenfold [specifically for small and medium enterprises] to address the ongoing transformation in Pakistan’s digital payments landscape, as well as enable ease of making payments for businesses through commercial cards,” Khan said.

The transition from cash and cheques to digital payments has sparked a wave of innovation, prioritising speed and convenience. There has been a significant increase in the number of merchants adopting digital payment methods. This trend is evident in the State Bank of Pakistan’s (SBP) quarterly review, which shows that card-based retail purchases rose by 5.0 per cent, while point-of-sale (POS) transactions saw an 8.0 per cent increase in volume.

“At Visa, we believe that inclusive economies benefit everyone, everywhere, and financial access is fundamental to the future of money movement. Visa plays a critical role in supporting national financial inclusion efforts in more than 200 countries and territories where it operates,” Khan said.

“In Pakistan, we remain committed to supporting the country’s vision of developing a robust digital payments infrastructure to ensure frictionless and secure payments,” he added.

Khan believes digital payments are crucial for driving Pakistan’s economic growth by expanding access -- to new markets, buyers and consumers -- and boosting revenue. Businesses that embrace digital inclusion have more access to valuable data.

“Enabling digital payments, e-commerce marketplaces, as well as digital invoicing and CRM systems will allow them to digitise, scale, and streamline transactions with customers. This digital transformation will have a significant impact on economic growth and foster innovation,” he said.

Visa, a payments giant, expects greater adoption of digital payments, particularly among tech-savvy Gen Z and millennials who first experienced the ease of e-commerce during the pandemic. According to SBP data, in 2024, the annual value of card transactions and payment markets reached $8.2 billion. The number of e-wallet users increased by 85 per cent, and internet banking users grew by 25 per cent. Mobile app-based wallets also saw significant growth, with customers making 2.697 billion payments through branchless banking mobile app wallets and 85 million payments through electronic money institutions (EMIs) e-wallets.

A strong and resilient payment system has also driven the expansion of POS machines, facilitating card-based transactions at retail locations. Digital transactions, including ATM cash withdrawals, accounted for 83 per cent of the total 844 million retail payments processed by banks and EMIs. This illustrates the increasing recognition of the benefits of digital inclusion, especially for small businesses. Visa’s tap-to-phone solution offers significant value for small merchants by allowing them to accept contactless payments via their smartphones, eliminating the need for separate physical devices.

Visa continues to prioritise payment security. Over the past five years, the company has invested more than $10 billion to reduce fraud and enhance network security proactively. It launched the Visa Alias Directory Service to simplify cross-border payments and improve user experiences while safeguarding sensitive payment credential information. The company is also integrating CyberSource technology to enhance e-commerce and has partnered with various stakeholders, including 1Link, HBL, Western Union, Meezan Bank, and several fintech, to boost financial inclusion efforts in the country. Additionally, Visa introduced ‘She’s Next’, a global advocacy programme aimed at empowering 2,500 women entrepreneurs, with five winners collectively receiving $50,000 in funding, along with training and mentorship.

Visa is collaborating with new players, such as fintech, banks, merchants, processors, and government entities, to provide access to its network, products, tools, and expertise, enabling its growth and success. These fintech strive to bridge the gap for unbanked and underserved populations, helping to integrate them into the official financial system.

“We work with a healthy pipeline of fintech through partnerships -- NayaPay, Safepay, Nymcard, and PayFast, to name a few 00 bringing sophisticated technologies and enhancing security and reliability with easy-to-implement payment solutions for small businesses,” Khan said.