System Limited, another big name in the local IT industry, has entered the e-money business through its subsidiary EP Systems which has been granted approval by State Bank of Pakistan to operate as an Electronic Money Institution (EMI).
State Bank’s approval allows EP Systems to operate as EMI, subject to certain terms and conditions, said an official announcement to Pakistan Stock Exchange.
The EMI approval will enable EP Systems to connect the unbanked population to the formal banking system allowing them to transact and use the financial system easily and seamlessly.
EP Systems owns and operates OneLoad, a digital commercial and financial settlement app for small retailers across the country. Over 35,000 active retailers use OneLoad as an access point for digital payments such as internet packages, mobile airtime, media, and entertainment subscriptions.
More than 150 million consumers have been served through OneLoad to date, making it one of the largest digital commerce platforms in Pakistan, according to Systems Limited.
What is EMI?
In order to speed up financial inclusion through different services, the State Bank of Pakistan has planned to regulate fintech and companies dealing with electronic money as Electronic Money Institutions (EMIs) throughout the country.
Entities who issue e-money are known as Electronic Money Institutions (EMIs) that offer innovative, user-friendly and cost-effective low-value digital payment prepaid instruments like wallets, prepaid cards, and contactless payment instruments including wearables.
These innovative payment instruments have been instrumental in promoting cashless payments like merchant checkouts, e-commerce, transportation, and toll payments, etc.
EMIs may engage in the following activities:
- Issue e-money payment instrument.
- Distribute e-money payment instruments
- Redeem e-money payment instruments.
- Any other activity permitted by SBP.
An entity that wants to become an EMI is required to hold an initial capital of Rs. 200 million. Existing PSOs/PSPs that intend to become an EMI and undertake e-money business shall hold an additional capital of Rs. 100 million.
Prominent companies that acquired the same approval earlier are NayaPay and Finja. It is expected that more local and foreign companies associated with financial and technology business will join the foray in the emerging field of electronic money which will not only attract investments but also speed up the financial inclusion in the economy.