Digital payments may help solve challenges
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There is a big opportunity for Pakistan in taking its micro, small and medium enterprises (MSMEs) into the digital age, outlined a new report of the United Nations-based Better Than Cash Alliance, in support of its member, the government of Pakistan and the State Bank of Pakistan (SBP).
According to the report, the fate of small businesses and national economies is intertwined. If one thrives, so does the other. Pakistan’s MSMEs account for 90% of enterprises in the country and nearly half of the gross domestic product (GDP). Their growth remains perpetually hamstrung by the dependence on cash.
It said that the adoption of responsible digital payments for merchants, with their proven ability to boost women’s economic participation and deliver the UN’s Sustainable Development Goals (SDGs) represented a tremendous pocket of potential growth.
“Digital payments can be a pathway to solve some of the major economic challenges the country faces.”
Digitising responsibly boosts financial inclusion and future-proof enterprises, ensures equitable access to formal financial services, improves workflows, reduces operational costs and mitigates mobility constraints, especially for women entrepreneurs. Designing digital payments, based on female customer needs, represent a market opportunity of over $650 million nationally, said the report.
“We commend the State Bank of Pakistan for its leadership in driving responsible payment digitisation for merchants, especially women merchants. Across Asia, digitising merchant payments has led to rapid MSME growth and as businesses grow, so do economies.
The report indicated that with the national adoption of digital payments, by 2025 Pakistan could boost GDP by 7%, generate four million jobs and realise an additional $263 billion in deposits, as defined by the National Payments System Strategy.
Published in The Express Tribune, October 4th, 2023.
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