he passage of the Prevention of Electronic Crimes (Amendment) Act, 2025, has introduced significant regulatory changes aimed at governing digital spaces, particularly social media and online content. The government claims that these measures are necessary to curb ‘misinformation,’ enhance cybersecurity and ensure responsible digital engagement. However, these changes have also raised concerns about their potential impact on fundamental rights, including freedom of expression, privacy and access to information. Beyond affecting the media and civil society, these amendments could have far-reaching consequences for Pakistan’s economy, particularly the fin-tech sector, which depends on a stable and open digital environment to operate effectively.

The right to free expression, guaranteed under the constitution and international human rights law, may be affected by the new powers granted to regulatory bodies. The establishment of the Social Media Protection and Regulatory Authority expands state control over online platforms, allowing authorities to regulate, remove or block content deemed unlawful, misleading or offensive. While the stated objective is to counter false information and harmful digital content, the broad and ambiguous language of the law raises concerns about how it might be applied in practice. Stricter online content regulations could lead to increased self-censorship, affecting open discourse, digital innovation and business operations.

An important aspect of digital rights is ensuring equitable access to economic opportunities through financial inclusion. The intersection of these rights—freedom of expression and privacy—relates directly to financial empowerment, particularly in the context of the fin-tech sector. Access to financial services is an essential social and economic right, enabling individuals to better secure livelihoods, gain access to education and improve their quality of life. Fin-tech platforms, through mobile banking, digital payments and other innovative financial services, are bridging the gap between underserved communities and the formal financial system, fostering opportunities for marginalised groups such as women, rural populations and small businesses. When financial inclusion is threatened by excessive regulation or limited access to digital platforms, it undermines individuals’ rights to participate fully in the economic sphere and restricts the equitable distribution of opportunities in society.

For the fin-tech sector, which heavily relies on digital platforms and online engagement, regulatory uncertainty and the risk of content restrictions could make compliance more complex. Fin-tech services—including mobile banking, digital payments, peer-to-peer lending and cross-border transactions—are built on a framework of easy access to financial information and real-time data sharing. If content related to financial literacy, digital commerce, or user discussions about banking policies becomes subject to scrutiny, it could create barriers to consumer engagement and industry growth. Moreover, fin-tech platforms often rely on social media for advertising, user engagement and financial education—areas that could be indirectly impacted by increased digital oversight and content moderation requirements.

Another key concern relates to data privacy and consumer trust. The law establishes the National Cyber Crime Investigation Agency, which will be responsible for monitoring digital activity. While enhancing cybersecurity is a legitimate goal, greater access to user data and online transactions could raise privacy concerns among consumers. If individuals perceive that their financial transactions and online activities are subject to heightened state scrutiny, they may become more reluctant to adopt digital financial services, potentially slowing Pakistan’s progress in financial inclusion. Fin-tech companies, especially those handling sensitive customer data, may also need to navigate complex regulatory requirements to ensure compliance with both local data laws and global privacy standards such as the General Data Protection Regulation.

Additionally, the investment climate for fin-tech and digital enterprises may be influenced by these regulatory shifts. Pakistan has been working to position itself as an attractive market for fin-tech start-ups and global financial technology companies, with recent regulatory frameworks encouraging the adoption of digital banking and innovative payment solutions. However, international companies and investors often assess market potential based on regulatory predictability. If fin-tech companies face inconsistent enforcement of content policies or broad legal mandates that allow for sudden restrictions, it could raise concerns about long-term stability. Foreign fin-tech firms looking to enter Pakistan may hesitate if regulatory oversight becomes too unpredictable or if operational risks outweigh market opportunities.

Pakistan has made significant progress in developing a start-up-friendly fin-tech ecosystem, with companies like Easypaisa Bank and JazzCash revolutionising mobile payments, and other wallets like SadaPay and NayaPay attracting global investors. However, legal instability deters investment. Tech companies, particularly those headquartered in Europe and the US, are bound by corporate governance and compliance obligations that could make Pakistan’s new restrictions a liability rather than an opportunity. Social media companies, payment gateways and digital banks will be more reluctant to establish operations if there is a constant threat of bans, content removals or legal reprisals against executives. Similar restrictions in other countries, like India’s revised IT laws and China’s internet controls, have already led to exit of international platforms; Pakistan risks heading down the same path.

With talks about Whatsapp Pay launching soon and Google Pay already on its way, the stringent restrictions and surveillance within the amendments could significantly affect the probable operations of both key global players in Pakistan. The growing regulatory oversight in Pakistan, focusing on digital content and data privacy, might influence how these platforms operate in the country. Any content restrictions, as part of efforts to combat misinformation and harmful digital content, could indirectly impact the promotional campaigns, financial literacy content and user interactions associated with digital payments. Furthermore, stricter regulations on data access could raise privacy concerns among users, potentially slowing the adoption of digital payment platforms like WhatsApp Pay and Google Pay. For these platforms, Pakistan’s evolving regulatory landscape introduces operational uncertainty that may deter their expansion or complicate compliance.

Broader economic impact of these amendments may extend to financial inclusion. The fin-tech sector has played a critical role in bridging gaps in access to banking and financial services, particularly for those who are unbanked or underbanked. Mobile wallets, branchless banking and digital payment solutions have enabled greater participation in the economy for low-income populations, small businesses and rural communities. If fin-tech companies must navigate additional restrictions on financial education content, digital transactions or peer-to-peer lending discussions, it could inadvertently limit consumer awareness and trust, thereby affecting the expansion of digital finance.

Striking a balance between regulation and innovation will be essential to ensure that Pakistan remains a competitive and attractive destination for fin-tech investment. Governments around the world continue to refine laws on cybersecurity, misinformation and digital governance. A measured approach that incorporates industry feedback may help maintain stability and investor confidence. Encouraging clearer regulatory frameworks, consultation with fintech leaders and alignment with international best practices could ensure that consumer protections and digital rights remain intact without stifling industry growth.

As the regulatory environment evolves, Pakistan’s fin-tech sector and the broader digital economy will need to adapt. How these amendments are implemented in practice will determine their long-term impact on social economic rights, financial innovation, digital access and economic participation. A well-calibrated approach that supports national security objectives while preserving market competitiveness and user trust could ensure a sustainable way forward for Pakistan’s digital financial future and financial inclusion.

The writer is an advocate of High Court, a founding partner at Lex Mercatoria and a visiting teacher at Bahria University’s Law Department. She can be reached at minahil.ali12@yahoo.com