Client Name

Swich

Faculty Advisor

Dr. Azima Khan

SBS Thought Leadership Areas

Entrepreneurship and Innovation

SBS Thought Leadership Area Justification

The creation of dynamic pricing models and digital financial tools aligns with entrepreneurial problem-solving and innovation in emerging markets. The introduction of instant settlement and wallet-based payment systems reflects market-oriented innovations that can redefine merchant experience and financial operations in the local fintech space.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

The work presented in this report aligns with Sustainable Development Goal 8 (Decent Work and Economic Growth). By improving digital financial services and creating revenue opportunities for small and medium merchants, the project contributes to inclusive economic growth. It also encourages responsible innovation in the fintech sector.

NDA

Yes

Abstract

Abstract

This Experiential Learning Project (ELP) was conducted in collaboration with Swich, a fintech startup aiming to optimize its online payment gateway operations in Pakistan’s rapidly evolving digital payments landscape. The main objectives of the project were to redesign Swich’s commission structures, develop a merchant segmentation and retention strategy, benchmark its services against competitors, and explore new financial models and revenue opportunities to support long-term growth and profitability. The project followed a structured, data-driven approach. We began by acquiring and analyzing transaction-level data for January, including merchant-level activity, commission rates across payment channels, and corresponding costs. This facilitated a margin analysis that uncovered pricing inefficiencies—such as merchants being charged lower rates than Swich’s underlying costs—which were negatively impacting profitability. Using this data, merchants were segmented by transaction size and frequency to better understand behavioral patterns and profitability tiers. This segmentation informed the development of a tiered commission structure aimed at aligning merchant incentives with Swich’s financial goals. Our financial modeling through the use of charging commissions using the transaction amount slab to historical data revealed a six percent increase in revenue and a three percent improvement in gross margin. In addition to commission restructuring, we designed two further models to enhance revenue. The first was an instant settlement model offering faster fund transfers to merchants at a premium rate, inspired by global fintech practices. The second involved the development of a proprietary Swich wallet or app, where merchants could hold balances postcommission deduction. In this way interest income can be earned. These two models create a float that has the potential to boost monthly revenue by up to fourteen percent. Merchant churn was addressed through a proposed cashback mechanism integrated into the tiered pricing model, where merchants receive rebates when advancing to higher tiers. While deeper churn analysis was limited due to a lack of user journey data for the time being, this loyalty-based incentive was designed to promote retention. Furthermore, a competitive benchmarking study identified viable service enhancements, including the reintroduction of subscription billing and enabling holiday settlements—two strategies likely to improve merchant satisfaction. More capital-intensive options, such as buy-now-pay-later (BNPL) and obtaining a license to improve authorization rates, were evaluated but deprioritized based on Swich’s current capabilities and strategic direction. In conclusion, this ELP delivers a comprehensive financial strategy backed by robust modeling and market research. The recommendations—ranging from tiered pricing to possible partnerships—offer practical, scalable solutions that can significantly enhance Swich’s profitability and competitive positioning in the digital payments sector.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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Available for download on Monday, June 17, 2030

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