For Pakistan to harness the full potential of digital commerce, strong collaboration is required among mobile operators, financial and payments companies and governmental agencies. By 2020, 3G coverage is expected to reach 90% of the country’s population.
A new research report produced by the GSMA discusses building digital societies in Asia.
With half of the adult population in Pakistan (60 million) having access to a mobile phone but not having a bank account, mobile money, or branchless banking as it is known in Pakistan, plays an important role. Mobile operators have already started to invest to increase branchless banking account adoption and usage, fostering the development of a digital ecosystem.
Branchless banking in Pakistan has grown at a faster rate than the traditional banking system and has extended the reach of financial services to the unbanked and those on low incomes. Recent market dynamics along with an increasing number of branchless banking accounts indicate that the foundations for digital commerce are in place in Pakistan and it is set to grow even more rapidly in the coming years. Growth of digital commerce will lead to further uptake of digital accounts as people start to see the value of using digital accounts to pay for goods and services in their daily lives.
Government payments is one area where the potential for digitization of payments is substantial. In Pakistan, providers and stakeholders are evaluating the feasibility of digitizing this use case both to reduce costs of delivery and drive use of branchless banking accounts. There is also an opportunity to increase the value of account ownership by providing support for remote and proximity merchant payments. For this to happen, technology-based solution providers in the financial and payment industries (fintech companies) should partner with branchless banking operators to create payment products for different market segments.
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