Earning online, the hard way

KARACHI:

Imagine this: You wake up early, pour your energy into creating content, running a small business, or freelancing on global platforms. You work with the same passion, skill, and dedication as your peers in neighboring countries. Yet, when it’s time to reap the rewards of your hard work, you find yourself earning significantly less—not because you lack talent or effort, but because your country doesn’t provide the tools and opportunities needed to monetise your work effectively. How long could you keep going before your motivation starts to dwindle?

This is the harsh reality for millions in Pakistan. Despite being home to over five million freelancers and small businesses contributing $400 million in exports, and ranking 4th globally in freelance earnings, the country’s potential is stifled by outdated policies and inadequate digital infrastructure. For 78 per cent of small business owners, their enterprise is the primary source of income for their families, underscoring the critical role these businesses play in Pakistan’s economy. Yet, they remain excluded from platforms that could amplify their impact—YouTube memberships, TikTok monetisation, PayPal, and access to global e-commerce giants like Amazon and Etsy.

As the global digital economy surges and neighboring countries embrace monetisation opportunities, Pakistan's freelancers, creators, and entrepreneurs are left wondering: Why can’t we compete on the same stage as the rest of the world?

Despite Pakistan’s undeniable digital talent and entrepreneurial spirit, the road to earning online remains riddled with obstacles that limit creators, freelancers, and entrepreneurs. These challenges, born from outdated policies, lack of infrastructure, and limited international collaboration, have placed Pakistan at a competitive disadvantage in the global digital economy.

A glaring challenge faced by Pakistani digital creators is the limited direct monetisation opportunities on major platforms. While neighboring countries like India have more extensive monetisation options, Pakistani creators can still earn through YouTube's Partner Program (YPP), where they can monetise their videos with ads. According to YouTube, Pakistani creators can earn between $0.50 to $5 per 1,000 views, depending on factors like niche, audience engagement, and ad clicks. However, this is still a relatively limited option compared to other countries, and many Pakistani creators rely on sponsorships, merchandise sales, or affiliate marketing to supplement their income.

Similarly, TikTok’s monetisation features, such as the Creator Fund, TikTok Shop and TikTok Live, remain unavailable in Pakistan, despite the platform being one of the most popular social media apps in the country. These restrictions hinder creators who work tirelessly to produce content that garners millions of views but fails to provide them with financial stability.

The ban on platforms like X (formerly Twitter) has only deepened the divide. With X offering monetisation features such as ad revenue sharing and subscriptions globally, Pakistani creators are effectively locked out of another revenue stream. The absence of these monetisation options not only restricts individual earnings but also stunts the growth of Pakistan’s digital economy, which contributes a mere one per cent to the GDP compared to the growing digital economies of neighboring nations.

Payment processing woes

Another significant hurdle for freelancers and small business owners is the lack of access to international payment systems like PayPal. While PayPal is the default payment method for platforms such as Fiverr and Upwork, Pakistani freelancers are forced to rely on expensive third-party intermediaries or informal networks to receive payments. This not only eats into their hard-earned money through high transaction fees but also creates delays, discouraging international clients from working with them.

For small and medium-sized businesses (SMBs), the situation is equally dire. According to the Payoneer report ‘SMB Ambitions Barometer’, 39 per cent of SMBs in Pakistan cite the cost of doing business internationally—such as high foreign transaction rates, tariffs, and shipping fees—as a major obstacle. Without affordable and efficient payment processing solutions, these businesses struggle to expand their reach to global markets.

Cut off from global e-commerce

E-commerce represents a massive opportunity for economic growth, but Pakistan’s entrepreneurs remain excluded from platforms like Amazon, Etsy, and eBay. While countries like India and Bangladesh have successfully integrated their sellers into these marketplaces, Pakistani entrepreneurs face significant barriers in creating accounts linked to local banks. This lack of access prevents countless artisans, small manufacturers, and exporters from reaching international customers, leaving their potential untapped.

For SMBs, globalisation is a priority, with many aiming to expand to key markets like the US, UK, China, and the UAE. Yet, outdated policies and limited infrastructure make it nearly impossible for them to compete. According to ‘SMB Ambitions Barometer,’ 62 per cent of SMBs in Pakistan believe that having a diverse global vendor network helps protect against disruptions, but without access to international platforms, this remains an unfulfilled goal.

Regulatory and policy bottlenecks

The lack of monetisation and payment options is not just a technological issue—it is deeply rooted in regulatory challenges. The government has yet to create a conducive environment for global tech companies to bring their services to Pakistan. The ban on X and restrictions on other platforms illustrate how regulatory decisions often hurt the very people they are meant to protect.

Moreover, the absence of clear policies for global payment systems like PayPal or e-commerce platforms to operate in Pakistan further discourages these companies from entering the market. This is in stark contrast to countries like India, where government initiatives and tech-friendly policies have made it easier for global platforms to integrate into the local ecosystem.

Falling behind

The impact of these challenges extends beyond finances. For freelancers and creators who see their peers in neighboring countries thrive, the sense of inequality is deeply disheartening. Many feel demotivated and unappreciated despite their hard work and talent. For small business owners, the inability to expand globally often leads to stagnation or even closure, affecting families who rely on these businesses for their livelihood.

This frustration is driving an exodus of talent. According to Bureau of Emigration and Overseas Employment (Pakistan), 2023 report, in 2023 alone, over 765,000 Pakistanis left the country, many of them young professionals seeking better opportunities abroad. This brain drain further weakens Pakistan’s economy, robbing it of the very talent that could drive digital transformation.

As per the World Economic Forum (WEF) Digital Economy Outlook report, the global digital economy is projected to grow to $20 trillion by 2025, and with this Pakistan risks falling further behind. While neighboring countries invest in infrastructure and policies to support their digital talent, Pakistan remains stuck. The lack of platforms to monetise content, process payments, and access global markets is not just a missed opportunity—it’s a systemic failure that affects millions.

Until these challenges are addressed, Pakistan’s freelancers, creators, and entrepreneurs will continue to face barriers that prevent them from reaching their full potential. The question remains: how much longer can Pakistan afford to overlook the untapped wealth of its digital talent?

Behind the statistics

While the numbers paint a stark picture, the real impact of these challenges becomes evident in the personal stories of those navigating this broken landscape.

For content creators like Kazi Akber, the absence of robust monetisation options in Pakistan has been a persistent frustration. Kazi, who primarily creates content on platforms such as Instagram and TikTok, acknowledges the allure of YouTube’s monetisation program, which remains inaccessible to many Pakistani creators. “YouTube's monetisation metrics are fascinating because they consider the average purchasing power of your audience, making it appealing for creators like me to aim for markets with a higher CPM [cost per mille],” he explains.

Despite this potential, Kazi finds himself relying almost entirely on brand collaborations to sustain his craft. “In Pakistan, creators with a smaller audience cannot survive on platform monetisation alone due to the low CPM. That’s why 99 per cent of my earnings come from branded work,” he shares, adding that this reliance places him in a precarious position given the unpredictable nature of the market.

Kazi also highlights a key systemic issue—Pakistan’s restrictive regulatory environment. “We in Pakistan operate from the need to control, not the hope to understand. This approach is severely myopic, especially for technologies evolving as rapidly as digital platforms,” he notes. The absence of international payment gateways further compounds the issue, limiting his ability to monetise a global audience. “Just getting payments from YouTube is difficult,” he says, underscoring the logistical challenges faced by creators in Pakistan.

Yet, despite the frustration, Kazi remains hopeful. “The latent potential in Pakistan is immense. Industries here would grow exponentially if they were fostered and protected. I’m optimistic, perhaps to the point of naivety, that common sense will eventually prevail,” he remarks, reflecting the resilience shared by many creators in the country.

SMBs in Pakistan are eager to expand globally, but face significant barriers. According to the Payoneer report, 62 per cent of Pakistani SMBs believe that having a diverse global vendor network is crucial to their success. However, establishing such networks is often challenging due to high international costs.

"We want to expand our business globally, but the cost of doing business internationally is a major obstacle," said a Pakistani SMB owner, Rafay Paracha who runs a sports gear business. "We struggle to establish relationships with global vendors due to high shipping fees, foreign transaction rates, and tariffs. These costs eat into our profit margins, making it difficult for us to compete with businesses in other countries."

The Payoneer report also highlights that 39 per cent of Pakistani SMBs consider the cost of doing business internationally as a major obstacle to expansion. Access to capital is also another hurdle, with limited personal and professional networks (48 per cent), high debt-to-income ratios (44 per cent), and inconsistent financial performance (35 per cent) being major barriers.

"The lack of access to capital and high international costs are significant barriers to our growth," said Paracha. "We need support from the government and financial institutions to overcome these challenges and expand our business globally. We want to create jobs, generate revenue, and contribute to the country's economic growth, but we need the right support to do so."

Moreover, the limitations on digital platforms and financial services also affect the ability of SMBs in Pakistan to innovate and stay competitive. With limited access to global markets, SMBs are often forced to rely on traditional business models, which restrict their ability to innovate and stay ahead of the competition.

"The limitations on digital platforms and financial services restrict our ability to innovate and stay competitive," said Paracha. "We want to adopt new technologies, explore new markets, and develop new products, but the lack of access to global markets and financial services makes it difficult for us to do so. We need the government and financial institutions to support us in overcoming these challenges and achieving our growth potential."

Despite these obstacles, Pakistani freelancers and SMB owners continue to innovate and adapt. The country’s 5 million registered freelancers brought in $400 million in export revenue during FY 2022-23, placing Pakistan 4th globally in freelance earnings. Yet, this impressive ranking belies the systemic issues they face.

Freelancers in Pakistan face significant challenges in accessing international payment services like PayPal. This limitation restricts their ability to receive payments from global clients, forcing them to rely on alternative methods that often come with higher fees and longer processing times.

"The absence of PayPal in Pakistan has made it difficult for me to receive payments from international clients," said a Pakistani freelancer, Sabah Muhammad. "I have to use alternative methods, which often charge higher fees and take longer to process. This not only affects my earnings but also my reputation with clients who expect timely payments."

Foreign transaction rates also reduce the earnings of freelancers in Pakistan. With limited access to international payment services, freelancers are often forced to use local banks to receive payments, which results in higher transaction fees and lower earnings.

"The foreign transaction rates are a significant burden for me," said another Pakistani freelancer, Hassan Latif. "I lose a significant portion of my earnings to these fees, which makes it difficult for me to sustain myself. I have to work harder to earn the same amount of money, which is unfair considering the value I bring to my clients."

Furthermore, the lack of access to international payment services also limits the growth potential of freelancers in Pakistan. With limited options to receive payments, freelancers are often forced to work with local clients who pay lower rates, restricting their ability to earn a decent income.

"The absence of international payment services has restricted my growth as a freelancer," said Latif. "I am forced to work with local clients who pay lower rates, which limits my earning potential. I want to work with global clients who pay higher rates, but the lack of access to international payment services makes it difficult for me."

The lack of official recognition for digital professions is a recurring theme. As Kazi points out, “In 2024, I still can’t go to a bank and open an account based on my occupation. I need to be labeled something more conventional. This mindset needs to change.”

The voices of Pakistan’s creators, freelancers, and SMB owners all point to the same concern, Pakistan’s digital economy is being held back by systemic barriers that demand urgent attention. The untapped potential in Pakistan’s digital economy is staggering. As Kazi puts it, “There’s no actual way of calculating how quickly industries would grow here if they were fostered and protected.” Until those changes come, the country risks losing its most talented creators and entrepreneurs to a global stage that recognises their worth. “For that very reason, I feel like I am hopeful. Not in any particular governmental policy per se, but in the prevalence of common sense, eventually,” says Kazi.

A roadmap for growth

Pakistan's digital economy is ripe with potential, but systemic reforms, technological advancements, and a shift in mindset are necessary to unlock its full potential. Addressing the barriers faced by freelancers, SMBs, and content creators will not only drive economic growth but also establish Pakistan as a competitive player in the global digital economy.

Pakistan must adopt a regulatory environment that fosters innovation and reduces bureaucratic hurdles. Government bodies must collaborate with industry stakeholders to craft policies that support digital businesses, from freelancing to e-commerce. Facilitating access to platforms like PayPal, Amazon, and Etsy could drastically expand opportunities for small businesses and freelancers.

Recognising digital creators and freelancers as legitimate professionals in banking and taxation frameworks will also reduce financial hurdles. Policies should focus on ease of doing business, simplifying the process of setting up and managing businesses, and encouraging entrepreneurs to formalise their ventures and tap into international markets.

Collaboration with global tech platforms like YouTube, Meta, TikTok, and PayPal is essential. Pakistan can learn from countries like India, where regulatory bodies worked with platforms to introduce localised monetisation options. By negotiating with these companies to address local payment challenges and enable monetisation, Pakistan can empower its creators and entrepreneurs.

Initiatives like dedicated creator funds, training programs, and co-sponsored campaigns can also bolster digital participation. These partnerships should aim to educate and equip Pakistani creators with the tools and knowledge to thrive in the global digital economy.

Strengthening digital infrastructure, such as expanding high-speed internet access, is a prerequisite for growth. The government, along with private sector partners, must invest in reliable digital payment gateways, cloud services, and cybersecurity measures.

Digitisation can also help SMBs overcome barriers to international expansion. With 56 per cent of SMBs already acknowledging the role of digitisation in easing market entry, there is a clear need to make these technologies more accessible. Programs offering subsidised access to digital tools and training for businesses could significantly accelerate their global integration.

With 74 per cent of SMBs identifying AI as a significant driver of innovation, fostering AI adoption across industries is crucial. Programs to support AI-driven startups, content localisation tools, and customer service enhancements will help Pakistani businesses compete globally. Investments in AI training and development will also equip the workforce with future-ready skills.

Public awareness campaigns highlighting the importance of the digital economy can build momentum for reform. Encouraging more creators and SMBs to demand policy changes will apply pressure on regulatory bodies. Additionally, workshops and webinars can educate freelancers and entrepreneurs on global best practices and alternative monetisation strategies.

With 71 per cent of SMBs planning to hire an average of nine employees in the next year, there’s a clear need to nurture local talent. Government initiatives to enhance digital skills through vocational training, coding boot camps, and certifications will ensure a steady pipeline of skilled workers. Incentivising companies to hire locally can also strengthen the domestic economy.

Pakistan stands at a critical juncture. With over 5 million freelancers and SMBs contributing $400 million in exports, the country is brimming with untapped potential. Yet, outdated policies, restrictive regulations, and limited infrastructure have kept its digital economy from flourishing. The world is moving toward a $20 trillion global digital economy by 2025, and Pakistan cannot afford to be left behind. By empowering its freelancers, SMBs, and content creators, the nation has the chance to not only uplift millions but also carve its place as a formidable player in the global digital economy. The question remains: will Pakistan seise the moment?