Page 82 - CMA Journal (July-August 2025)

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Strategic SWOT Overview of Digital

Payment and E-Commerce Sector

The following provides a brief overview of the sector using the
SWOT framework and does not represent a detailed analysis

STRENGTHS WEAKNESSES

 Pakistan’s digital payments reached 2 billion transactions  Persistent cash reliance hinders digital payments, limits
accounting for 89% of total retail payments during the Q3 of FY25. e-commerce growth, sustains informality, while delayed
 Pakistan achieved Tier 1 status in the ITU Global Cybersecurity RAAST merchant payment features compound challenges.
Index, climbing from 79th to the top 46th position globally.  Card-based payments remain a minor share of e-commerce
 Mobile banking, the fastest-growing channel, processed compared to cash transfers, e-wallets and mobile banking.
1,686 million transactions worth Rs. 27 trillion in Q3 FY25,  E-commerce volumes fell 40% YoY despite merchant growth.
reflecting 16% growth in volume and a 22% surge in value.  Digital divide persists, with limited internet penetration in
 Internet banking throughput grew 58.6% YoY, with high-value rural areas.
transactions averaging Rs. 84.9k.  Weak logistics networks hinder last-mile delivery efficiency.
 POS network expanded to over 132,000 devices, boosting  Inconsistent enforcement of e-commerce and digital
acceptance infrastructure. transaction laws.
 RAAST processed 371 million transactions worth Rs. 8.5 trillion  Low financial inclusion and digital literacy restricts uptake.
in Q3 FY25.  SME reluctance due to onboarding complexity and
 Branchless banking wallets reached 64.3 million users, driving compliance costs.
transaction growth.  Limited capacity of regulators to monitor fintechs and
 Youth-heavy population (64% under 30) fuels rapid digital venture capital.
adoption.  Exclusion of informal, OTC, and branchless data limits overall
 E-commerce transaction value grew 29–30% in Q2 FY2025 market visibility.
despite volume shifts.  Fragmented inter-agency coordination slows digital policy
 JazzCash boasts 48 million registered users, 350,000 merchants, execution.
and an annual value equal to 9% of GDP.  Digital banks struggle with high startup costs, delayed
 Daraz leads e-commerce with US$857 million GMV and profitability, entrenched bank competition, and weak dispute
34,500 sellers. resolution.
 Entry of Mashreq as Pakistan’s first SBP-approved digital retail  Regulatory uncertainty, particularly around taxation, deters
bank shows regulatory openness. investors.
 SadaPay’s acquisition by Papara validates fintech market  Lack of standardized brokerage and payment integration
attractiveness. software.
 E-commerce revenues reached US$504 million in July 2025, up  Over-reliance on bank-led innovation, with fintechs still
5–10% from June. small-scale.
 National E-Commerce Policy (2025–2030) prioritizes QR code
standardization and logistics upgrades.
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 Doubling of e-commerce users from 6.9 million in 2024 to  B an k i ng g c o
to
 Banking complaints surged to 16,915 in H1-2025, straining
14 million by 2029. consumer
consumer trust.
 Projected digital commerce market growth to US$32.94 billion n  Cybersecurity risks, including phishing and AI fraud, persist.
by 2030.  Weak logistics contribute to congestion and environmental
 Digital payments market projected to reach US$92.83 billion issues.
by 2030.  Fragmented tax system complicates compliance for SMEs.
 Centralized KYC/AML onboarding could reduce duplication and d  Resistance from legacy banking models could slow fintech entry.
speed adoption.  Gaps in digital ID verification hinder onboarding, especially for
 Expanding QR code and pull-payment use cases via Raast. women.
 Integration of SECP, FBR, NADRA, and provincial data for seamless  Weak payment dispute resolution discourages daily users.
ess
seller onboarding.
 Growing EMI penetration, led by brands like SadaPay  Global e-commerce giants pose competitive pressure on local
platforms.
and Nayapay.
 Public procurement adoption of digital payments can set  Macroeconomic instability may limit fintech scaling, particularly
in lending.
industry precedent.
 IFMP-led training reforms to professionalize digital  Merchant discount rate changes could slow POS growth.
 New tiered transaction taxes may dampen e-commerce and
finance workforce.
payment adoption.
 Expansion of Mashreq and other digital banks could diversify  Over 500,000 gig workers remain outside social protection
competition.
schemes.
 National Financial Inclusion Strategy (NFIS) 2024–28 will drive  Regulatory bottlenecks delay digital banking licenses.
digital microfinance, boosts liquidity, and would reduce  Inadequate cross-border payment frameworks for
operating costs. exporters/importers.
 Rising mobile internet coverage unlocking rural markets.  Consumer shift back to cash-on-delivery in times of uncertainty.
 E-commerce CAGR forecast at 17% in 2027.
 Emergence of fintech-led merchant credit innovation for SMEs.
 Potential cross-border B2B platforms like Shoplus for
export growth.
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