PFA

This demonstrates that in markets where large swaths of the population currently have no access to banking, startups compete to serve this need and notably, they also cater to other small and medium-sized businesses.

In India, Bangalore-based startup RazorPay launched such features as corporate credit cards and also a dashboard to enable businesses to manage their transactions, as well as a feature enabling automated recurring payments. The significance of this is that these features are currently not provided by more traditional banks.

One of the most exciting regions undergoing digital transformation is Pakistan. Its digital transformation program under the initiative “Digital Pakistan” encompasses all industries from agriculture, health care, education, trade, commerce and public services to government and financial services.

With a population of over 223 million, having an average age of just 22.8 years with more than 60% of the people under the age of 30, Pakistan offers immense business opportunities in the payments sector. The country has more than 176 million mobile subscribers, 90 million active Internet users and 80 million smartphone users.

Although 2020 has been a tumultuous year for most of the world, it has been an extraordinary catalyst for digitization and e-commerce, in Pakistan in particular. The Covid-19 pandemic prompted businesses to start shifting to work-from-home in 2020, with a full lockdown ordered from around mid-March. Because of this, 2020 was arguably the point when Pakistan’s digitization began a steep acceleration, as digital solutions became more imperative.

In fact, there was immediate growth in Internet usage across Pakistan as traffic rose 15% as soon as the lockdown was imposed. Government institutions, particularly the central bank, openly encouraged people to use digital channels. Households started turning to online solutions for buying groceries and other essential items during the lockdown.

Before the pandemic, Pakistan’s mobile payment industry was estimated to grow by more than 20% over the next few years, building a sector worth more than US$53 million by 2025. With the pandemic, that number is anticipated to increase even quicker, with more of the population expected to use digital channels for future payments.

The State Bank of Pakistan is driving further change with the availability of instant payment nationwide through their Raast system.

This mirrors the global trend of service sectors shifting toward digitization. The improvements in digital connectivity rewire consumer behavior, which leans more and more toward convenience, cost savings, and personalized retail experiences. Business consumers also benefit from lower transaction costs, supply chain efficiency, and increased flexibility around adapting to customer needs.

What is most exciting is that Pakistan is one of the economies where digital transformation is enabling irreversible changes inside the service sector – in areas such as fintech, e-commerce, and e-government. Companies of all sizes are also collectively thriving through digitization: Their marketing and communication methods have become faster, more results-driven and flexible.

The market size of e-commerce has increased significantly in Pakistan in recent years, completely overhauling the way consumers deal with and pay the businesses they buy from. The government’s push toward digital infrastructure has improved the conditions and replaced overwhelming paperwork with digital services.

All in all, digital transformation is helping the region to accelerate economic growth and innovation, as well as improving the overall business and consumer environment. This new era comes with the promise of fresh professional opportunities for young Pakistani graduates and entrepreneurs, demonstrating how future generations stand to benefit from this digital revolution.