Pakistan’s economic situation has become better over the past decade with the country’s GDP hitting $304 billion in 2017, up from $170 billion in 2008.
While these growth trends are in line with regional markets — well, marginally lower than neighboring China and India — the size of Pakistan’s GDP is quite insignificant when you compare it with its potential.
A wide range of sectors, including the cottage industry, e-commerce, freelance, small and medium-sized, thrived during the past 10 years without any support from financial institutes.
Imagine a freelancer who can not open a bank account. Image a woman from a far-flung small town doing matchless embroidery work who has not been able to get payments from international buyers as she has no access to a payment system.
This is going to change now!
And the reason is yesterday’s historic deal between Ant Financial and Telenor Bank.
What is Ant Financial?
For reference, Ant Financial — the company behind AliPay and an affiliate of AliBaba Group — is the world’s largest, most valuable fintech company and directly competes with PayPal.
Valued at around $80 billion, Ant Financial offers an array of financial services ranging from peer to peer payments, online payments, offline payments at stores, loans, wealth management and credit scoring.
To help you understand, AliBaba could never be as big as it is today without AliPay — which was the name of Ant Financial before its rebranding in 2014. The need arose due to the distrust international buyers had of the Chinese vendors. They didn’t want to pay before getting the goods and similarly, Chinese manufacturers didn’t want to ship products before they were paid for the goods.
AliPay arose out of this deadlock and it responded by introducing an Escrow service that resolved the issue. The rest, as they say, is history.
AliPay further helped AliBaba by offering small-scale short and medium-term loans to AliBaba vendors based on their history, helping uplift the Chinese cottage industry.
Thanks to Ant Financial, here’s how cash is now transacted in China:
- All your funds are stored in a mobile wallet through which you can
- Pay at any store by scanning a QR code, entering the amount, and pressing the pay button
- Pay a taxi or utility bills
- Make online payments
- Lend money to someone in real time
All without involving any cash at all. And more importantly, there are no transaction charges on the transfers for majority of the payments.
What to Expect?
Now imagine Easypaisa offering similar services to Pakistanis. Here’s what you can expect in the coming months:
- Make payments by just scanning a code (through your smartphone camera)
- Make payments to Careem and Uber directly from your mobile wallet
- Pay utility bills by scanning a code on the bill
- Pay your friend by scanning a QR code on his mobile device
- Accept payments (through credit cards) on your website
- Request for small loans with a processing time of just a few seconds
- Get greater returns on your funds stored in the mobile wallet — as they will be invested in stocks, companies and startups on your behalf
- Get insurance for yourself and other products from within an app
- And so much more, all without having a single physical currency note in your pocket!
While the integrations may take some time, the roll-outs are expected to begin in 2018.