Digital Commerce and Payments Potential in Pakistan

Digital Commerce and Payments Potential in Pakistan

Digital commerce is a deliberate form of e-commerce because it deals with the exchange of electronic goods. E-Commerce plays an important role in economic development. It moderates cost of products and services and creates new job facilities.

Telecom companies have currently been capitalizing mostly in infrastructure which reveals that by 2020 3G internet will be accessible by 90% of the population, and mobile broadband will extent to 40%

In Pakistan, millions of people have access to internet and now it has turn out to be the most important part of our lives. The upsurge of digital commerce in Pakistan depends significantly on rates of internet access, as well as corporation between mobile operators, e-payments companies and government departments. In Pakistan, e-commerce has largely persisted as a buy and sell process as most transactions are done in cash. Almost 95% of e-commerce users choose a cash on delivery (COD) payment model.

To enable the growth of online payments for digital commerce, mobile operators have arranged their own marketplaces and payment prologues. Telecom companies have currently been capitalizing mostly in infrastructure which reveals that by 2020 3G internet will be accessible by 90% of the population, and mobile broadband will extent to 40%.

To completely realize the opening of digital commerce in Pakistan, the priority is to increase digital accounts and digital payments

One of the major obstacle in the way of digital commerce in Pakistan is lack of proper electronic payments system. Prevailing systems are either unapproachable in Pakistan or not suitable for local entrepreneurs. It mostly remains an underserved market in terms of both internet access and digital payments, yet there are probabilities of enhancement. Digital payments signifies an encouraging opportunity for branchless banking players to generate importance for their customers. Easypaisa, Mobicash and Upaisa have created both front-end and back-end payment products; these are in the trial period.

Pakistan’s digital commerce market is still in its initial stages, but in the upcoming years it could show a more significant role in the growth of digital commerce. Mobile operators are playing a remarkable role in boosting both digital access and digital payments. To completely realize the opening of digital commerce in Pakistan, the priority is to increase digital accounts and digital payments.

Digital payments signifies an encouraging opportunity for branchless banking players to generate importance for their customers

Although digital commerce is all set to flourish in Pakistan, there is great possibility for government payments to be digitized. For this purpose the cost of delivery and rate of use of branchless banking should become better. GSMA also recommends that fintech companies should team up with branchless banking operators to make products which target different parts of the population.

With amplified assistance there is a huge potential for the growth of the industry in the country. Many idealistic local players such as Shophive, Homeshopping, ROZEE, Just4girls.pk, and Pakwheels, as well as foreign financiers such as Rocket Internet with their assorted online initiatives such as Jovago, Tripda, and Foodpanda, are all trying to build up their market share to evolve digital commerce industry of Pakistan. In Pakistan all these businesses have developed despite of all the obstacles such as misunderstanding and distrust of digital commerce, security concerns about online transactions, less access to technology, low literacy rates, and inadequate infrastructure and logistical support.

The evolution of digital business in Pakistan has been made possible by the enhancement of various aspects, with the security situation being one of the most important. The government of Pakistan by signifying to the Financial Action Task Force (FATF) that the country is no longer a port for money launderers and terrorist fundraisers, has endorsed for a new era of growth. It will be a thrilling time for Pakistan as online payments have the potential to drive economic growth for a new compeers of financiers.

Many idealistic local players such as Shophive, Homeshopping, ROZEE, Just4girls.pk, and Pakwheels with their assorted online initiatives are all trying to make their market share in the evolving digital commerce industry of Pakistan

To impel this promising industry in the right direction, a multi-pronged approach is required, particularly to strengthen both the supplier and the buyer sectors. To make this possible, a mixture of stakeholders needs to come together to confirm the following things: supplier- and buyer-protection; standardization of a simple five-click facility for merchant on-boarding; formation of attentiveness among consumers and merchants; and the consolidation of platforms for payment and sharing.

With an e-commerce potential of $10 billion, Pakistan at present is on the radar of giants like Amazon, Flipkart and Souk. PayPal and eBay may also start working in Pakistan

With an e-commerce potential of $10 billion, Pakistan at present is on the radar of giants like Amazon, Flipkart and Souk. PayPal and eBay may also start working in Pakistan. Innumerable other local and home operated business have also succeeded through Facebook pages as a result of fast penetration of the internet and smartphones.

Taking everything in to account, it indicates that the market and timing both are appropriate for growth of digital commerce in Pakistan. Regardless of the few interruptions, the industry is all set to generate substantial waves in the country, with vast scope for modernization and enhancement as well as exponential long-term growth.