Digital payment ecosystem in Pakistan


Master of Business Administration

Faculty / School

Faculty of Business Administration (FBA)

Project Type

MBA Research Project

Abstract / Summary

Digital Payments is an evolving mode of payments which is gaining momentum in Pakistan. More than 84% of Pakistan's population does not have access to conventional and mobile banking services. There is very little use of electronic B2B payments, regardless of the value of the transaction, and especially by micro and small retailers. Cash is still a dominant payment method as it is considered "safe" by almost all of the surveyed retailers .and suppliers covered in this research. 1UNK (Pvt.) Limited is Pakistan's first Payment Service Operator (PSO)/Payment Service Provider (PSP) and largest payment & switch system, committed to evolving a strong epayment network in the country to enable efficient and real-time transactions. This research report examines digital payment ecosystem in Pakistan, key success factors of the digital payments service in Asia along with attitudes, behaviors and preferences of the identified key segments in Pakistan. A secondary research was conducted on Chinese, Indian and Turkish markets, where AliBaba, Troy, NPCI, Swish, WeChat, WeChat Pay, BKM, Flipkart, Jio Money and Speed pay models were studied to understand the regional digital payments landscape. In addition to this, the research team conducted survey from 225 people, comprising of retailers, students, suppliers and non-users of digital payments. 67.1% respondents believed that digital payment usage will be easier than conventional payment methods, however, 62.6% were of the opinion that digital transaction aren't priced reasonably; commission of approximately 6% is high which acts as a deterrent for opting for digital payments. One of the key findings was that only 28.88% respondents believed that routing payments through digital medium is secured which furthers strengthens the argument that trust, and perceived riskiness is key for growth of digital payments in Pakistan. Furthermore, four in-depth interviews were conducted from Head of Digital Payment System of Habib Bank Limited, Meezan Bank, Bank Islami and Telenor Easy Paisa. From the interviews, it was deduced that the low engagement is one of the challenges faced by the industry. It is extremely difficult for banks to convert customers from conventional banking services onto making them use digital services, therefore app downloads can be greater in number, but user engagement remains low. It was derived from the interviews that there are primarily two obstacles in the adoption of digital products by the customer.

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