Pakistan can adopt Egypt’s digitalization model to move toward a cashless economy as digital payments become more common worldwide. This is possible given the many economic similarities between Egypt and Pakistan.
Fawad Abdul Kader said he had as of late visited Egypt to gain proficiency with their methods for advancing computerized exchanges as inside a couple of years it got associated with 7,50,000 product inside a time of not many years.
He stated, “In a short to medium-term goal, we want to connect 100,000 merchandise with digital payment solutions, against the existing 900 connected through our system.”
Pakistan has made progress in financial inclusion, as the number of bank accounts has increased by 16% over the past year, according to recent reports. However, only 6% of transactions in Pakistan are carried out digitally, indicating that digital payment acceptance is still low. The sluggish reception of advanced installments is making challenges for organizations and impeding financial development.
Up to 40% of Pakistan’s gross domestic product can be contributed by SMEs. However, because of the ongoing industry climate, organizations face numerous difficulties, including high exchange costs, the weight of documentation, and the aversion of duties. Digital financial services can speed up and improve the accuracy of financial transactions while simultaneously lowering transaction costs by up to 90%.
Egyptian payment systems became digital thanks to numerous privately and publicly held businesses. Fawry was one of the most important ones. It is a part of a new generation of technology companies that are bringing Egypt into the digital age. Many of these businesses are contributing to the transformation of sectors like banking, health care, and transportation. At the same time, they are creating good jobs for young Egyptians, of whom more than 30% are unemployed.
In 2013, IFC made a $6 million investment in Fawry and assisted the company’s founder Ashraf Sabry and his team in growing it. The 12-year-old business now processes 2.5 million transactions daily. In 2018 Fawry handled 40 billion Egyptian pounds (about $2.5 billion) in electronic installments. Prior in 2019, Fawry turned into Egypt’s biggest monetary innovation firm to list on the public stock trade. It now has 1,600 employees.
This was the central point of my conversations with Fawad Abdul Kader, Paymob Pakistan’s country manager. He shed light on various aspects of the phenomenon of digitalizing merchandise in Pakistan in accordance with the Egyptian model, which was expanding at a supersonic rate.
Nevertheless, despite the rising rate of financial inclusion, particularly in terms of acceptance of digital payments, the adoption of digital payments has been sluggish in Pakistan.
He went on to say that the behavior of people who still prefer cash transactions remained a challenge for the sluggish adoption of digital payments. Small businesses and merchants’ lack of awareness and willingness to conduct all transactions in cash to avoid documentation and taxes is another factor contributing to this sluggish adoption in some instances.
According to Kader, Paymob’s biggest obstacle in the country is still small businesses’ lack of awareness and willingness to use digital payment methods.
The country manager emphasized that by educating the public about the advantages of digital payments and the cost of holding cash, the government could make cashless and online transactions easier. Digital payments and financial inclusion can be promoted by government initiatives in the country.
He demanded that the government intervene to fix the problem, stressing that the center must make cashless and online transactions easier by educating the public about the advantages of digital payments and building trust in digital payments. He said that the government’s growing expertise in social media tools could also be used to teach vendors and small and medium-sized businesses (SMEs) about digital payments.
Additionally, Kader emphasized the significance of Soft POS solutions in reshaping Pakistan’s acceptance of digital payments. Merchants can accept digital payments on an NFC-enabled phone with soft POS, also known as tap-on-pay. This lowers the cost of holding cash.
Worldwide, soft POS adoption is anticipated to accelerate, reaching 450 million users by 2023.
A mobile application that turns any NFC-enabled smartphone or tablet into a POS payment device that enables merchants to accept payments was recommended by a Paymob official.
Small business owners looking for a more mobile and adaptable payment option are turning to softpos systems, which have gained popularity. Soft POS technology offers merchants a cost-effective, accessible, and adaptable method for digitizing their payments.
By encouraging more small and medium-sized businesses (SMEs) to use digital payment methods instead of cash, soft POS can have a positive effect on the payments landscape in Pakistan. With time, state run administrations in Pakistan are turning out to be more adroit at utilizing virtual entertainment apparatuses. By educating them through tutorials and fostering trust in digital payments, the expanding expertise can be utilized for the benefit of the masses, particularly small and medium-sized enterprises (SMEs), vendors, and merchants. Additionally, it would support a registered economy.