As surge in use of mobile money has helped catalyze economic empowerment globally, Pakistan is no exception to this transformation. The State Bank’s recent report indeed paints a promising picture: digital payment adoption in the country is surging, with a 34% increase in point of sale transactions in 2023. A burgeoning internet penetration rate of almost 57% and an expanding awareness of digital financial services are fueling this growth.
Yet, a glaring paradox exists. While digital person-to-person flourished, surging by 32% year-on-year to reach PKR 2.3 trillion in the last quarter (Q2-FY24), merchant-oriented transactions remain almost entirely paper-based. This disparity is a gaping wound in Pakistan’s digital economy. The reliance on cash, particularly in the retail sector, fuels a shadow economy that the International Monetary Fund estimates to be a staggering 35.6% of the gross domestic product. This represents a colossal loss of potential revenue for the government, which can be significantly mitigated by building a robust digital merchant payments infrastructure.
In this regard, the launch of 1GO by 1LINK could help pave the way for the digitization of Pakistan’s largely informal retail sector. Built on top of Raast’s Person-to-Merchant (P2M) module, 1GO is an advanced suite of digital payment tools like dynamic and static QR codes, Request-to-Pay (RTP) as well as bulk processing.
Through partnerships with 13 aggregators, 1GO will be able to reach thousands of merchants across the country, ensuring that the benefits of financial inclusion reach every corner of Pakistan. Imagine the freedom of not carrying a dad wallet with five different cards and being able to pay with just a scan through on your mobile app, whether you’re at a tandoor or a fancy restaurant. Neither you have to hurriedly add a new beneficiary every time to send someone money and anxiously hope for the internet to work smoothly.
Its interoperable nature, accepting all bank accounts via the Raast, ensures universal accessibility, thus democratizing access to digital payments. This inclusivity becomes extremely crucial in a country where SMEs, representing 90% of all businesses and contributing 40% to GDP, are often excluded from the digital economy due to a lack of accessible payment solutions.
By seamlessly integrating with the existing financial infrastructure, 1GO Raast P2M provides a pathway for expanding digital payments, fostering financial inclusion and reducing the reliance on cash. As every transaction leaves a digital footprint, it will help the lawmakers tackle tax evasion and reduce the burden on the salaried class.