Filling vacuum: Telenor to bring online payment gateway this year

Consumers will be able to pay online for a range of products.

KARACHI:

In a move that will benefit the country’s e-commerce, Telenor Pakistan is developing an online payment solution for the domestic market, which it expects to launch sometime this year.

“We are working on an online payment gateway, which will be based on our Easypaisa brand,” Telenor Pakistan Chief Marketing Officer Irfan Wahab Khan told The Express Tribune after speaking at a recent media roundtable about the company’s post-3G plans, the technology’s benefits to the country and the challenges facing the telecom industry.

Khan refrained from sharing any details, including the exact launch time, about the new product, but said the service would be available to Easypaisa mobile account holders and linked with 1Link – the ATM-based interbank payment network.

Telenor’s flagship mobile banking product, Easypaisa is the market leader in the segment – the platform has managed $3 billion or 1% of the country’s gross domestic product (GDP) in transactions since its launch, according to Khan.

Pakistani e-commerce (online retail) market is very sizeable already, he said, while rollout of 3G technology will spur its growth. There is no official figure available for the current size of this market segment but as per estimates of e-commerce companies the number is somewhere close to $10 million. Still there is a lot of room for growth.

Many countries including regional economies India and Nepal have access to PayPal – one of the world’s most widely used online payment gateways. Besides, PayPal, there are a number of other real-time payment systems, such as Google Checkout, Authorize.Net and Amazon Payments to name a few.

By contrast, there is no such platform available in Pakistan for online purchases – the e-commerce, therefore, depends mainly on cash-on-delivery (COD) model. In this system, customers make payment for online purchases at the time of receiving the product.

With the availability of an online payment gateway, consumers could make online payment for purchases ranging from airline tickets to apparel and mobile phones and anything for which vendors offer an online payment option, Khan said.

With third-generation (3G) mobile internet services expected to be launched this month, this seems to be a smart move by Telenor. The high-speed portable internet, according to industry experts, will trigger the growth of e-commerce in Pakistan.

Bangladesh, a regional country with similar market dynamics, saw its e-commerce grow by 50% within three months of the launch of 3G services.

The timing of launching a payment gateway will, therefore, be important as the company can benefit from an early entry into this segment just like it did with Easypaisa.

Telenor Pakistan, a subsidiary of the Oslo-based telecom giant, was the first player that had entered the mobile banking segment in 2009 through Easypaisa while other operators were skeptical – it is the market leader in mobile banking now.

Asked to comment on how this new product would contribute to the company’s revenues, Khan said, “telecom is a long-term business. For now, our focus is on bringing more people into financial inclusion and expanding market share.” The solution the company was developing would be similar to PayPal, he said.

An e-commerce player, who has already experienced the product during the testing phase, said the new system is an improved version of Easypaisa and more convenient for merchants. However, it is not truly a PayPal-like solution.

Published in The Express Tribune, May 2^nd, 2014.

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