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Fintech and Telecom Go Hand In Hand For Digital Financial Inclusion In Pakistan

In Pakistan, three sectors that have witnessed tremendous growth in terms of innovation and users are Information Communications Technology (ICT), telecommunications and financial services. By joining hands, they could bring millions of marginalized people into formal banking channels. The exclusion of an entire customer base from the formal financial sector has created a window of opportunity for financial service providers in creating digital value propositions. Digital banking is likely to provide huge impetus to financial inclusion. Surrounded by so much potential, it is likely that financial service delivery coupled with technology will have a transformational impact on the country’s unbanked and financially excluded populations.

According to McKinsey & Company, a worldwide management consulting firm, fintech will add about 4 million jobs, 93 million bank accounts, $36 billion annually to the gross national product (GNP), and $7 billion to Pakistan government’s net revenue by 2025. Bank accounts seem to be on track as there are 7 million plus today. This includes 1.8 million traditional accounts, accumulated over 50 years, and 5.2 million mobile/branchless accounts accumulated in around one-tenth of that time. This is because globally, traditional bank accounts rise proportionately to GNP, but mobile accounts can rise exponentially. Transactions worth Rs 21 billion were carried out by consumers on international e-commerce websites. As mobile phone adoption rises with smartphones becoming more affordable (150 million plus users), maturing 3G/4G telecoms services and rapid growth of mobile money solutions, along with extensive wireless coverage, innovative initiatives like QR codes and mobile wallets are set to change the digital landscape in Pakistan.

Over The Counter Vs Mobile Wallets

Within branchless banking framework, Over the Counter (OTC) Model (JazzCash, Omni, Easypaisa, MobiCash, Upaisa etc.) is agent facilitated which no matter how convenient and reliable, is slowing down the pace of promotion of financial inclusion by limiting customers’ access to facilitated transactions only. This barrier could be addressed via a shift from OTC to mobile wallets. Presently, OTC dominates over mobile wallets in terms of volume and value of customers. However, with the State Bank of Pakistan (SBP) approval of mobile wallet account opening through biometric verification, it now takes less than five minutes to open a mobile wallet.


In Pakistan, the microfinance industry has been very successful in harnessing the branchless banking network. Pakistan is one of the few countries where there is a specific license for microfinance banks. Consequently, it is also one of the few countries where telecom even courier companies have invested in microfinance banks (Telenor Bank, U-Microfinance Bank, Waseela MF Bank by Mobilink & TCS Bank etc.). The principal benefit of this is the ‘one-minute account.’ Telco-owned microfinance banks can open a level zero mobile wallet, based on just a single SMS. A level zero mobile wallet is a bank account which allows a customer Rs.50,000 transaction value and is accessed through a phone. The introduction of new technology, like the QR code, has now made this possible. Other recent innovations include MasterPass/Fone Pay and SimSim etc. The industry expects the number of merchants to increase to 100,000 from the current 30,000. The creation of this addition to our ecosystem will help reduce financial exclusion.


Masterpass is a digital payment service that allows you to check out faster by storing all your payment and shipping information in one secure location.

Fone Pay

Powered by Masterpass QR, a quick response (QR) mobile payments solution that allows consumers to make simple and secure digital payments across devices and channels, FonePay combines a user’s bank accounts, mobile wallets and payment cards including debit, credit and prepaid products on one platform. FonePay currently allows over 30 million people in Pakistan, in collaboration with leading financial institutions, to link accounts from Meezan Bank, Soneri Bank, Easypaisa and JazzCash. Users can also link any Mastercard credit, debit or prepaid card issued in Pakistan and use the app to pay in seconds.


SimSim is a collaboration between FINCA Microfinance Bank Limited and FINJA (Pvt) Limited. This is the first time a bank and a fintech, acting as the super-agent of the bank, have partnered to create a digital financial product. SimSim successfully completed a beta pilot prior to the formal approval from SBP, and recorded Rs 600 million in transactions, 30,000 in self-registered mobile wallet accounts and a retail network of 500 participating merchants.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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