After 3G/4G, Pakistan Now Needs an Online Payment Gateway

Around four years or so ago I had written this piece titled: “Why Does a Pakistani Website Earn 32 Times Lesser than any American Counterpart?

In this post I explained that why e-commerce infrastructure is important and how it could boost Pakistan’s economy in general and online businesses in specific.

This e-commerce infrastructure — in layman’s language — includes following things:

  • A way for businesses to open merchant accounts with local banks
  • A way for them to accept credit cards payments on their online websites
  • A way for these businesses to transfer online revenues (collected through credit cards) to their local bank accounts

Unfortunately, my whole article — written four years ago — is still valid for almost all things that I discussed then. During all this time the market demand for online payment gateway has only increased many folds. Just look at the number and magnitude of online stores and other online businesses that we have in Pakistan and imagine that they all have to rely on “Cash on Delivery” for their payments, its a pity.

There are some exceptions, I agree but such exceptions are using their (foreign based) parent groups that allow them to accept credit cards; otherwise “Cash on Delivery” is ruling Pakistan’s e-commerce industry as of today.

Branch-less banking solutions is one way of handling the payments but hassle involved in the process and the transaction charges totally kill the idea of employing mobile financial solutions for your online store.

Now let’s have a look at following stats to give you an idea that how badly we need an online payment gateway:

  • Pakistan has over 140 Million phone subscribers
  • Three 3G and two 4G operators (considering Warid is set to start operations in few weeks)
  • Over 4 million 3G users (with-in first six months of 3G operations)
  • Over 30 million internet users
  • Pakistanis Ranks in top five nations for online work on various freelanceing websites
  • Foreign investment valuing millions of dollars for Pakistan focused ecommerce portals
  • Pakistani startups making their way to global markets

This all depicts that market is over-ready for an online payment gateway and we must be provided one working, easily available, feasible and fully featured payment gateway for a market that can turn this current million dollar ecommerce business in to a multi billion dollar industry.

This online payment gateway is part of ecosystem that I recently talked about. This is how your communication networks (such as 3G and 4G) can get you 900,000 job offerings and trillions of rupees to be added to GDP of the country.

We hope that Ministry of IT and PTA have similar thoughts in mind and they are working on something to get us a payment gateway that will help our freelancers to get the top dollars from foreign clients directly into their local accounts without any hassle.

Please note: For records, there are three payment gateways in Pakistan, but getting services from them is next to impossible for a mid-sized business/startups. I will soon talk about these currently available payment gateways and why they are not designed for mid-scale businesses or for common persons, startups, individuals. Keep watching this space for more on the topic.

For now, let us urge public and private sector authorities, organizations and associations to look into the matter and do something positive for the making of next multi-billion dollar industry in Pakistan.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • bash

    every thing u say is true and we really need an online portal to transfer money but honestly when u say the ministry of i.t and pta and the word hope….. u lost me there

    come on man u are a experienced person and when u write like that it makes every one laugh out loud.

    i wish i could buy stuff from amazon ebay newegg groupon etc but the fact remains we dont have anything to pay for when it comes to electronic transfers. and i think its not gonna change that quickly. u wrote an article 4 years ago on the same topic and after 4 years u are writing the same thing have u noticed any change….

    • aamir7

      I am just a blogger, not a policy maker or an activist who can enforce ideas. My job is to get the message to the right people. I just hope that chairman PTA, who I believe is capable of delivering, would do something positive.

      Pasha should also feel concerned. So let’s hope my friend.

      • Muhammad Yasir

        As a bloggger , you must have contacts with OTHER writers/bloggers , even some prominent ones..
        why dont u spread the message there?!
        im sure SOMEONE will come across it

        • Shahid Saleem

          Oh believe me, everyone who handles financial stuffs like this and talks to regulators and State Bank ——- THEY ALL KNOW.

          In fact our State Bank went STEP BACKWARDS just a few weeks ago when they said financial startups (local companies for payment solutions) will need paid up capital of Rs 20 crore. Now, who has that kind of money sitting around???

          Compare that with Europe or Canada or US where companies start up offering payment solutions with just a small amount of money.

          • Muhammad Yasir

            Hmm.. someone at the top must be REALLY retarted or fed wads o’ cash by some anti-state agency to suppress our budding startups!

      • realistically

        Our banking industry is rotten. Do you know State Bank had to enforce IBANs by issuing a circular? Chairman PTA cant do anything. State Bank can. They just need a green signal from the govt.
        In absence of a proper online payment channel/gateway etc, who is making money? It goes without saying that banks are.

      • insider

        Telecos have already started working on these lines

  • It’s a goin-on discussion for years. Why can’t we still have PayPal in this country !

    • Muhammad Yasir

      typical extremist and mullahism backward bullshit in this goddarned country , thats why.

      • What does mullahism/extremism have to do with PayPal ? I am not an informed expert on this but if this is a deliberate attempt to undermine the massive potential of Pakistani talent and market, it could very well be from the outside rather than from inside. But this is also true that our financial institutions like the state bank have some of the toughest and most ridiculous conditions for foreign bodies to come and implement their infrastructure here. If this were an honest society and our policy makers were honest and sincere they would surely have come forward by now and explain why we are still kept deprived some of the most basic of facilities here privileges of which are being enjoyed for years even by the countries that are more developing even by Pakistani standards. They need to answer us on this. But then again ye wo jagah hai jahan kisi ki maut aur qatal ka koi jawab nai to PayPal bechara kis khayt ki mooli hai.

        • Muhammad Yasir

          exactly bro. dont you see , what happens here daily is bloodshed and all kinds of wrong bewlshit. Pakistan is bearing the brunt of a country(Afghanistan) that hated it and REFUSED to help its people (Hijrat tragedy of khilafat movement). At this state of mini-civil war , no global company would risk its assets to set up in a country where violence is a daily occurence. All the US has ever given us is wars , wars and wars (along with weapons). Never did it EVER try to introduce anything to help the budding potential of Pakistan.

      • Dr. Aamir Liaquat Hussain

        chotay log or choti baten…grow up

        • Muhammad Yasir

          aray amir bhai aap kahan agaya yahan.
          jaen backstage p galiyan bakkein :D

          • Khan

            M yasir…..you will find many of such kind of sadists.

            • Muhammad Yasir

              yeah , exactly , the dark side of our community :/

          • Dr. Aamir Liaquat Hussain

            apke coment nay sabit kr dia k mene jo kaha wo thek tha.
            you were in pipeline when I was young

            • Muhammad Yasir

              aray choriye na , ap jaen mamool k mutabiq karen jo ap karte hain…

      • Khan

        Agreed, today we(Pakistan) is suffering and very much backward in all respects. The responsibles are only these sadists mullas, who generated a typical nursery in this beautiful country, and these mullas been supported by some so called friendly counties.

    • Noaman Ahmed

      There are many illegal money exchanger in pakistan….and they will shutdown….if paypal comes to pakistan…..

  • Faraz

    If we just get the PayPal support in Pakistan, it would be great start for eCommerce in Pakistan. I have been using the online payment stuff for Gaming which is lil good, but receiving payment in Pakistan from outside World is such big hassle. Because the companies like Western Union and MoneyGram charge you much for Global Payment etc. However its easy on Paypal if its available in Pakistan. Hope for the best.

    • ahmad

      Sorry for the noob question, I also want to shop online but don’t know which bank offer such facility in Pak. Can you explain me a bit please? (urgent question)

      • Mustafa Ayub

        Most, if not all banks offer online transaction services. The difference is in the interest rate they charge. Online transactions can be done on a debit/credit card, although some banks may allow it on a credit card, only. Furthermore, again, all of this is specific to the individual bank’s policy. I recommend that you visit your bank and inquire about how to enable online buying against your debit/credit card.

        Regards.

        • ahmad

          Thanks

  • Bilal Aahil

    now this is damn well true Aamir, it’s no surprise that an article you wrote 4 years ago is still too valid to ignore, online payments in Pak is such a hassle to deal with, those who do offer, us consumer don’t trust them as much and those who don’t are our only option and that makes Cash on delivery the best option available to us.. it’s like ordering a really expensive Pizza when ever you do online shopping with cash on delivery.

  • Ali

    why not paypal???

    • Muhammad Yasir

      answered your query in reply to Faisal’s comment

  • Sitara Samoon

    zara sochye to 3g 4g achkukay ha, zara 2011 yaad karay :)

  • Jobr

    because pakistani people deserve this :/

    • Muhammad Yasir

      wut

      • Shaykh ul Islam Tahir ul Qadri

        Inqalab

  • Sara

    Hope we will get paypal soon, we don’t need any other local solution. We all should work and try together to get paypal in Pakistan. Amir ata as a leading IT blogger of Pakistan you can run a campaign to force Pakistani Government so that he take series action to bring Paypal in Pakistan.

  • Bilal Javed

    I am receiving wires from International banks or Odesk in my Standard Chartered accounts both local and foreign currency then what is Payment gateway here? And whats the difference between receiving wires as compared to Payment gateway?

    • Dr. Aamir Liaquat Hussain

      electric wires or optical fiber?
      I couldn’t understand why you receive wires in bank ;)

    • Shaykh ul Islam Tahir ul Qadri

      YA dakho Pakistanio is admi ko bhar ka mulk sa paisy aaty hai. Or log meri zaat pak pa ilzam lgaty hai…

  • shakeeltariq

    Here’s an interesting take on this, written by Faisal Khan aka @babushka99:
    http://www.faisalkhan.com/2014/10/27/murder-on-chundrigar-road-how-sbp-killed-the-paymentsfintech-startup-industry/

    • Shahid Saleem

      It’s what tells us that our State Bank is broken, amazingly broken. Who has Rs 20 crore sitting around doing nothing???

  • waiting for Paypal for ages now.. hope they will start in Pakistan soon, and Skrill they are biggest lier they block account without any reason and I have lost many $ which are still in skrill account, which i cannot use or withdraw..

  • Riz

    Dear what you thinking about PayPal!!!! It’s more then a skill working on same pattern!
    They will block your amount without notice!!!!keep that in mind!

    • At least we can withdraw money to bank account from limited paypal account , but cant in skrill. Skrill is organized scammers.

  • credulousgeek

    PayPal is available in Yemen even we can’t have it in Pakistan what a shame

    • Aik Pakistan

      It’s not government’s responsibility to start PayPal in Pakistan. The business owners of PayPal will decide it themselves considering the level of risks in this country.

      • credulousgeek

        FYI Owners are ready to invest but nobodys willing to bring them in and also ebay is too interested but who cares its pakistan and please talk some sense next time!

      • credulousgeek

        FYI Owners are ready to invest but nobodys willing to bring them in and also ebay is too interested but who cares its pakistan and please talk some sense next time!

      • credulousgeek

        Google has invested Apple is launching iPhones what’s more what risks?

      • Then it very IS government’s responsibility to minimize those risks and take necessary steps to win their trust and convince all the entrepreneurial stakeholders to come build their infrastructure here for the good of a common man. If authorities are not responsible then why do authorities even exist ? Ebay aur paypal yahan aa jayen to in so-called pathetic authorities ke apne market shares na warr jayen ? Inko kahan hazam ho sakti hai ye baat. Nonsense talk !

  • merlini

    actually you can buy online using SCB debit or credit card

  • Ali

    I have been following the progress of Gateway roll out for years and there is always some small news but never any development. I have suggested this to many people as well but no one seems to be serious about it. Why do we have to wait for someone else to establish the gateway. What is stopping some good developers or software house getting together to set up a payment gateway. Clearly the government is not capable of doing it. Ill help out in any way I can. And it can be a profitable business as well.

  • Eli Ehsan

    In a country where even ATM networks are still not fully developed?! Jeeeez.. that’s a LONG LONG way to go for sure…

    • Muhammad Ashraf

      Need of ATMs are replaced with branch less banking agents like, easy paisa, etc. Further, as per world bank data, growth of atm machines has also increased, pls refer to worlbank data

  • Muhammad Ashraf

    There are several hurdles on the way of online payment gateway, first one is cyber security of Pakistan, the fact is average internet user in Pakistan doesnt know enough about secure internet browsing, second problem is government policies which are not willing to introduce innovative payment solution but despite many problems, solutions are always available, instead of installing global electronic gateway our local banks can establish local payment gateway just like link 1 and mnet, which can enable Pakistani e-store to collect eletronic payments from pakistani customers having mnet or 1 link enabled atm cards,This will some how help many Pakistani webstores to make some money.

    • Aik Pakistani

      I appreciate this idea. I is seriously workable.

    • Shahid Saleem

      State Bank wants you to have Rs 20 crore before you can open a business related to funds transfer.

      Tell me who has that much money sitting around and is going to open a payment gateway.

      • Muhammad Ashraf

        i also advised a solution for it, instead of establishing global payment gateway, we can start with local e-payment gateway which can enable Pakistani estores and customer to make transaction electronically hence no body has to invest more.

      • Muhammad Ashraf

        i also advised a solution for it, instead of establishing global payment gateway, we can start with local e-payment gateway which can enable Pakistani estores and customer to make transaction electronically hence no body has to invest more.

        • Shahid Saleem

          State Bank will not let you do even that without 20 Crore.

          • iwonder

            kitni baar bolo ge aik hi baat

            • Shahid Saleem

              until you realize how FUTILE it is to trust our current government.

          • Muhammad Ashraf

            This is another problem,

          • Muhammad Ashraf

            This is another problem,

  • Ubaid Ur Rehman Khan

    I have my MBA thesis on E-commerce provides additive advantage in Pakistan Economy, I have myself worked on e-commerce website and web designer, I also feel/need the e-commerce gateway that will lead Pakistan’s Economy.

  • Ubaid Ur Rehman Khan

    The very important thing we need to understand that our Govt should take part in this game, I do not know perhaps State Bank still sleeping or Federal’s :)

    • Aik Pakistani

      State Bank and the Government have already appropriate policies in place e.g.
      Payment Systems and Electronic Fund Transfer Act, 2007. All we need is to gain trust of investors and increase cyber security.

      • Ubaid Ur Rehman Khan

        Good, they should work to implement in local Banks, and then these local Bank force will educate our investor to invest in this business, now there are many strategies to scatter this information

        Second, Cyber Security is one of major threat, we can ask help to Singapore who claim world first E-Economy.

        Many we can discuss, here perhaps it would be the brainstorming for who develop this plan.

  • Mustafa Ayub

    Forget Pakistani banks or creating a new e-commerce portal. Online payment systems exist and are remarkably effective. PayPal or Apple Passbook require partnership with banks whose credit cards they will support. Given the politico-economic condition of our country that won’t happen in the foreseeable future.

    As for myself, because I use Android, I have my online banking credentials in Google Wallet. Albeit it’s not useful for online shopping in Pakistan, that method still utilizes cash on delivery (COD), but for established websites like Amazon, Ebay, Newegg etc, Google Wallet works flawlessly. An additional benefit that Google Wallet has to offer is that it doesn’t use a commission per online transaction method to the concerned banks, in contrast to PayPal or Apple Pay. This can be of benefit to Pakistan if the government wants to tap developed and working online payment portals.

    Moreover, Google customer care regarding Wallet is very good. I’ve tried it and was very satisfied.

    All said and done, the crux of the conversation is that Pakistan isn’t a country where credit cards are widely used. We still rely on cash. So much so that in most commercial settings, it is necessary to inquire prior to making a purchase if the business accepts a credit card. We are not used to “using” plastic, online transactions are a far-cry. Haha.

    • How are you able to use gWallet on ebay when almost all the sellers over there accept only PayPal ? I am severely limited by this as I get to shop frequently from ebay and there’s normally no way out to this. Please educate me on this, I am new to gWallet.

  • Parvez Iftikhar

    I think it is because our State Bank regulations are very tough, which is probably due to efforts to choke funding of terrorist networks.
    But I also think that one reason for popularity of cash-on-delivery is that people have yet to start trusting the on-line sellers.

  • Umar

    Hi,
    First of all it is a Quality blog and Thumbs up for you for that. I hope we will keep reading more informative blogs written by you in future.
    Even though you mentioned that you are going to write another article on existing three Payment Gateways soon, but just for the sake of curiosity can you please share your knowledge and just mention their names here?
    Thanks.

    • aamir7

      there are three online gateways that offer services in Pakistan, namely UBL, NIB and there’s third one that I need to confirm. But getting their services is almost impossible. Keep watching this space for more updates on this topic.

      • Umar Shabbir

        Thanks Aamir,
        I am not sure, but aren’t UBL and NIB just offering Merchant Accounts, and payment processing gateways used by them are same international gateways?
        And if that is the case that we have local payment gateways, why are we still craving for more PayPal or alike gateways? I mean other than their tough policies, is their anything else that they lack in?

      • Umar Shabbir

        Thanks Aamir,
        I am not sure, but aren’t UBL and NIB just offering Merchant Accounts, and payment processing gateways used by them are same international gateways?
        And if that is the case that we have local payment gateways, why are we still craving for more PayPal or alike gateways? I mean other than their tough policies, is their anything else that they lack in?

      • Umar Shabbir

        Thanks Aamir,
        I am not sure, but aren’t UBL and NIB just offering Merchant Accounts, and payment processing gateways used by them are same international gateways?
        And if that is the case that we have local payment gateways, why are we still craving for more PayPal or alike gateways? I mean other than their tough policies, is their anything else that they lack in?

        • Umar Shabbir

          What I am trying to say is that as we can see everybody begging PayPal to offer its services for Pakistan, or we are asking MoIT and PTA to offer such services. If we already have these 2,3 Pakistani gateways already, what more are we looking for? I hope you can clear my confusion here.
          Thanks.

          • Again, I might not be as informed as Aamir and others are but as someone who buys frequently over the web and who desperately looks forward to sell random goods to the global market, I am very much confident in saying that paypal is accepted and trusted globally and it’s something buyers and sellers all over the world swear by when it comes to the online transactions. Ebay is one such example where I find multiple items of my interest from different international merchants and sellers almost all of whom only accept paypal as a form of payment and would only ship to paypal verified addresses with no exceptions. If you ask me, I feel extremely limited and frustrated because my country and our government and our financial institutions would go to any lengths to make a common man’s life miserable. I am sure there would be other political and legal reasons for it but those don’t make us any less at loss. If steps in this directions are ever taken, it would only put our land and our people in advantage and prosperity and nothing bad could ever be anticipated out of it. A helpless lot we are !

            • Umar Shabbir

              I agree with your point of PayPal being more authentic and given priority over other gateways that International clients opt for. But I have following concerns;
              1. Making a PAKISTANI gateway is not going to give us a higher rank than PayPal. A US/ or International client may even be more hesitant to sending money through a platform that he for sure knows is Pakistani.
              2. Making a Pakistani gateway to make outbound transactions overseas, same issue. How will Top notch platforms like Amazon, or merchants on Ebay going to allow a Pakistani platform to be integrated/allowed with their Stores as we have same authenticity issue.
              3. I understand there are some benefits like it can allow payments acceptance facility to small businesses/freelancers who in other case can not have a facility to charge payments online.
              4. Another benefit can be that as it is a local gateway, so service charges may be less than the international gateways.
              5. MOST IMPORTANT QUESTION: (Lets please keep political/ policies debate etc aside.) What is ACTUAL reason that this solution has still not been developed in Pakistan so far? We don’t lack in technical skills as we have development companies that are offering Enterprise level software solutions worldwide. Capital is also not the actual problem, as I am sure it is not going to cost more than a corporate business solution. So what is holding it back?
              Is it that those who have brain/vision they don’t have resources, and those who have resources they don’t have vision?

              In short I have absolutely no doubt it is going to benefit us as in Pakistan, but we need to identify the actual potential that this solution can have. That may attract the attention of the concerned authorities and we may be able to have this solution in Pakistan.

  • Nabeel

    I don’t think the online payment solution is something we still need to hope for, it’s very much here. Big banks like HBL, UBL and MCB have already started offering such services and other banks are also in process.

    The big question here is that, are the consumers comfortable paying for services through online modes. Daraz.pk is the most successful e-commerce business in Pakistan for now (in my opinion) and it offers payment modes of COD, online transfers and online card payments. Yet 97% of the transactions are done through COD, 2% through online transfers and mere 1% through online cards.

    That simply tells us that majority of the consumers want to see & feel the product they are buying before they pay and trust factor isn’t that great.

    So online payment solutions are here but will take some time for the consumers to get used to. Just my two bits on this topic.

  • Adil Mazher

    First of all we need to bring Paypal in Pakistan.Look even our neighbour contry India have Paypal but we dont :/ that is total dissapointement for every resident of our country who is willing to accept payments online for their buisness but than he see Paypal everywhere and not In Pakistan so first we need Paypal In Pakistan :/

  • Bilal

    MCB is launching in coming days ..

  • Nommi

    Hi Aamir,

    Can u please tell us the three Payment Gateways currently in Pakistan.
    As far as i know two are:

    1) UBL Go-Green Internet Merchant Acquiring
    2) MCB

    Which the third one is.

    I just heard that HBL is also launching Merchant service with the collaboration of CyberSource

  • Nommi

    Hi Aamir,

    Can u please tell us the three Payment Gateways currently in Pakistan.
    As far as i know two are:

    1) UBL Go-Green Internet Merchant Acquiring
    2) MCB

    Which the third one is.

    I just heard that HBL is also launching Merchant service with the collaboration of CyberSource

  • Nommi

    Hi Aamir,

    Can u please tell us the three Payment Gateways currently in Pakistan.
    As far as i know two are:

    1) UBL Go-Green Internet Merchant Acquiring
    2) MCB

    Which the third one is.

    I just heard that HBL is also launching Merchant service with the collaboration of CyberSource

  • Gull

    This is not a rocket science and can be done putting salt in state bank eyes (for 20 crore if any) in a very legal way just registering pvt ltd that is allowed to keep “Amanats” biggest problem is Banking sector transaction fee where it is 50PKR per transaction with limit of 15,000pkr
    this makes the whole process useless
    so if some wants to buy a piza of PKR100 or less he will also have to pay 50 so no one will try this

  • Aliraza Khan

    i am work on payment gateway.

    Very soon Pakistan have a own payment gateway.

  • Imran

    NIFT is bringing first Pakistani payment gateway very soon