Page 30 - CMA Journal (July-August 2025)

Focus Section

Key Challenges framework, many gaps remain in the system. Key
institutions such as the State Bank of Pakistan (SBP),
1) Infrastructure: One of the most important
Securities and Exchange Commission of Pakistan
challenges is that infrastructure development has
(SECP), and Pakistan Telecommunication Authority
not covered the entire population of Pakistan. In
(PTA) are active in this space, but their collaboration
many rural and remote areas, issues of weak signals,
has not yet fully met the needs of digital payment
lack of internet coverage, and electricity shortages
system growth. One of the most important
persist, which are key hurdles for the economy and
requirements is to simplify the licensing process for
the expansion of the digital payment system. In
fintech companies so they can more easily facilitate
major cities like Karachi, Lahore, Islamabad, and
peer-to-peer (P2P) digital payments.
Faisalabad, most of the population can access
mobile internet, but there are still areas even within Conclusion
Lahore where no signal or internet is available inside
homes—people have to go outside to make calls or In Pakistan, the digital payment system has improved
use the internet. Slow internet speed is also a major significantly over the last decade, but it has still not
problem, often creating delays or failures during reached the level achieved by regional countries like
payment transactions. India. The Government of Pakistan should take serious
actions such as spreading awareness about digital
2) Literacy: The current education system does not
payments through nationwide campaigns, introducing
include subjects or awareness programs on banking
relevant activities in school and college curricula, and
systems or online payment transactions. A large part
conducting workshops through social organizations. It is
of the population does not know how to use
necessary to develop offline digital payment options and
smartphones or the internet for digital payments.
expand internet coverage and mobile networks.
Many people are not even familiar with how to fill
out a cheque, which highlights the low financial To address scams and fraud, the government must
literacy level. According to World Bank reports, only strengthen consumer data protection, upgrade security
21% of adults in Pakistan use bank accounts, which is standards, and raise public awareness. Similarly, RAAST
very low compared to regional averages. needs further improvement, and certain payments—
such as taxes, SECP fees, NADRA fees, and traffic
3) Cybersecurity Problems: In recent years, scammers
challans—should be made mandatory through digital
and fraudsters have been active, stealing money
channels. A dedicated regulatory body should be
from bank accounts and carrying out fraudulent
established to oversee the entire digital payments
transactions. As a result, many people avoid using
ecosystem and to conduct continuous research for
internet banking due to fear of fraud. It is the
expansion and improvement.
government’s responsibility to ensure a secure
environment for digital payments so that people can By doing so, Pakistan can significantly strengthen its
trust the system and adopt it. digital payment system, making it secure, transparent,
4) Culture: Pakistan has a strong cash-based culture, and resilient. Key regulatory bodies such as SBP, SECP,
mainly due to two reasons: lack of awareness and tax PTA, and NADRA must also enhance their collaboration to
evasion. It is necessary to introduce digital payment provide a trusted environment for users. Once these
awareness in the education curriculum and make it targets are achieved, Pakistan will be able to move
mandatory to pay government fees and taxes toward lower corruption, higher tax collection, and
through digital platforms. Currently, the Punjab sustainable economic growth.
government’s E-Pay app and Islamabad’s Citizen References
Portal are facilitating some digital government
payments, but the adoption is still limited. • State Bank of Pakistan Reports; https://www.sbp.org.pk/Finc/finc.asp
• World Bank Reports; worldbank.org
5) Cost: Traditional shopkeepers prefer cash payments
because they cannot afford the cost of POS devices • Pakistan Telecommunication Authority; https://www.pta.gov.pk/
and transaction charges. This remains a major hurdle • https://www.brecorder.com/news/40369694/digital-payments-
for the expansion of the digital payment system. The thriving-in-pakistan-q3-sees-2bn-transactions-sbp
government should introduce policies requiring
financial institutions to provide free POS devices and About the Author: The writer is a Fellow member of ICMA and an
remove transaction charges to encourage wider entrepreneur and runs a management accountancy firm. He has
over 15 years of diversified experience in financial reporting, tax
adoption of digital payments.
consultancy, corporate services, and real estate investment
advisory. He also has experience in providing freelancing services in
6) Regulatory Problems: Although the Government of
financial reporting and management accounting.
Pakistan is continuously developing a regulatory
28 ICMA’s Chartered Management Accountant, Jul-Aug 2025