Only 15% of Pakistanis Have Moved to Digital Payments: Survey

Despite the closure of brick and mortar stores, only 15% of consumers have moved to digital payments in Pakistan.

COVID-19 has fundamentally changed the way people live their life with people concerned about the impact of COVID-19 on their health and the economic situation. Most consumers are worried, as most of them have never witnessed such a crisis and are reacting differently to the situation, which is leading to a change in buying behaviors.

Dun & Bradstreet Pakistan and Gallup Pakistan collaborated to jointly publish a report, incorporating the views of 1,291 residents via telephonic surveys conducted from June 04 to June 16, 2020.

Due to the lockdown, non-essential physical stores have been closed. Businesses have introduced online channels to compensate for the drop in sales from their traditional brick and mortar stores. Consequently, consumers are shifting towards online shopping to follow social distancing norms. However, only 15% of the consumers have made digital payments for the first time during the pandemic.

Consumers have been hesitant to adopt digital payments as Pakistan is primarily a cash-based economy. According to the data provided by the State Bank of Pakistan(SBP), digital payments account for only 0.2% of Pakistan’s 100 billion transactions annually.

State Bank of Pakistan (SBP) had waived off transactional charges on various modes of online payments for customers on a temporary basis in order to curtail the risk of the spread of COVID-19. The pandemic has pushed the masses to switch to contactless, free of cost, hassle-free modes for personal and commercial purposes.

Sindh Has Been Quick to Adopt Digital Payments

The report stated that around 1 in 5 respondents in Sindh have used digital payments for the first time. According to the May 2020 estimates, Pakistan has 166 million cellular subscribers with 80 million having 3G or 4G services. The broadband penetration in Pakistan was around 39% in May 2020, this indicates that despite having the resources, respondents did not use digital payments.

17% Male Respondents used a digital payment method while 13% were female.

Source: D&B-Gallup Report

More Than 80% Are Still Not Using Online Mediums

Consumers are hesitant to use online services. More than 80% of respondents are still not using online mediums to order, learn or communicate, said the report.

Source: D&B-Gallup report

Buying Behavior

The report said that one-third of the consumers have reported an increase in expenditure on groceries during June 2020.

During June, consumer spending on entertainment and education declined severely, while consumer spending on Medicines and Household Cleaning items increased.

The report said that 33% of consumers have increased their grocery expenditure during the month, some consumers have resorted to panic buying in anticipation of extended periods of lockdown and uncertainty while 39% of consumers have decreased their expenses on apparel and footwear.

32% increased their expenditure on household cleaning while most are buying products like sanitizers and disinfectants to keep their families safe from the virus.

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