Major Developments in Pakistan’s Fintech Landscape During 2023

Fintech operators with innovative services continue to thrive, including sustainability in the expansion of business on the ground and on paper alike. 

On the other hand, fintech operators that mainly planned to provide traditional services faced immense challenges, including intense competition and low profit margins. 

10 fintech operators are working commercially with different services and products. 

Six companies are licensees of the Security Exchange Commission of Pakistan (SECP), and four are regulated by the State Bank of Pakistan (SBP), which are also called electronic money institutions. 

Here are a few major developments in Pakistan’s fintech landscape 

ABHI Expands Its Footprint in The UAE

Pakistani Fintech ABHI further expanded its footprint globally, mainly in the UAE, with the launch of an account-to-account payment service in partnership with globally renowned companies Visa Inc. and YellowPepper. 

In the UAE, the fintech company was selected as one of the Future 100 companies by the government of the host country a few months ago. 

The year 2023 was eventful for the fintech operator, with various partnerships, recognitions, and initiatives. The company garnered global recognition as a technology pioneer by the World Economic Forum—the first from MENAP to receive this honor. 

Additionally, the founders of ABHI, Omair Ansari and Ali Ladhubhai, were selected as Endeavour Entrepreneurs. 

ABHI secured a groundbreaking Rs. 2 billion through Sukuk Islamic bonds, leveraging its unique ‘AA’ long-term and ‘A1+’ short-term ratings—a historic achievement for a non-banking financial company in Pakistan and the region. 

The fintech operator also expanded its outreach through investment and products in the outgoing year. ABHI acquired 2.7 million shares in Universal Network Systems Limited, operating under the brand name BlueEX. 

Also, it launched AbhiKarobar, providing COD financing to businesses facing inflation challenges.

Akhtar Fuiou and EP Systems Get Approval for Commercial and Pilot Launches

The State Bank of Pakistan awarded a commercial license to Akhtar Fuiou Technologies for operating its services after it successfully met the regulatory and commercial requirements during its pilot launch. 

The company operates under the brand name Digitt+. The operator launched e-money wallet farmers, which is a unique strategy for fintech operators to get a competitive edge in the market. 

The operator also signed multiple agreements of partnerships and collaborations with different entities during the period of last year. 

SBP granted permission to EP Systems to commence its pilot operations within its domain of services, such as an e-money wallet for merchants and consumers, in June 2023. 

The operator also received approval from OneZapp, its wallet application, for pilot operations. 

EP Systems came up with different modes of operations in the market with the sound support of its parent company, Systems Limited. 

EP Systems also launched the digital e-commerce platform OneLoad in 2020 with the partnership of the International Finance Corporation. 

The company also raised $11 million from the Bill & Melinda Gates Foundation. The EMI will get approval for a commercial launch in 2024. 

Kistpay Goes Global

Pakistani fintech Kistpay made significant waves not only in Pakistan’s fintech scene but also worldwide. Kistpay expanded its global reach by starting its operations in Rwanda, Africa. The operator won recognition from two global institutions in 2023.

It was recognized among the top 10 positions globally in the SDG Digital GameChangers Awards held by UNDP and ITU. Kistpay was also recognized by the World Bank Group for its unique approach to financing smart devices. The operator was highlighted by the GSMA report for handset affordability due to its commitment to sustainable and impactful digital and financial solutions.

Kistpay has become a member of the P2C Digital Coalition with ITU to pursue collaborative efforts for meaningful connectivity and community empowerment in Pakistan and other countries.

Additionally, Kistpay achieved a significant milestone with the launch of its first-ever retail outlet, further enhancing its commitment to accessibility and convenience.

SadaPay Enables Freelancers to Connect on GooglePay and ApplePay

SadaPay launched an exclusive service enabling freelancers to get their payments through GooglePay and ApplePay. 

This can be a significant service in Pakistan’s financial setup, filling the gap to a greater extent while facilitating the requirements of the growing community of freelancers who can receive payments much more easily from their international clients across the world. 

According to an estimate, Apple Pay’s user base, at 550 million, has surpassed PayPal’s 450 million. 

Not only that, but the payment volume via Apple Pay is four times greater than PayPal’s and is growing at an exponential rate. 

The reach is massive, with over 2 billion iPhones globally equipped with Apple Pay. 

The service allows freelancers to save their earnings in USD and convert them to PKR when it suits them. They also claim to offer the best exchange rates in the country for this conversion and settle the money in your account within 48 hours. 

CheckOut and CareemPay Withdraw Their Licenses

CheckOut and CareemPay have decided to stop launching operations in the Pakistani market. 

The two renowned players in the fintech world withdrew their licenses (within principle approval) separately. Economic uncertainty and growing competition among financial institutions are said to be the reasons behind this decision. 

Their change in plans was not good news for the fintech landscape of the country because these two entities have established businesses in several countries, including developed economies. 

The situation of the economy has comparatively improved compared to the past, and there is huge scope already available in the local market. 

These two players with international presence could launch services for remittances and freelancers to contribute a significant role with their strengths, which other fintech operators could do little. 

The banking regulator should convince them to review their decision, devising conducive policies for them to launch cross-border financial services. 

Finja Sells its E-Money Wallet Division to OPay

Finja sold out its operations at Electronic Money Institution (EMI) to Opay International as part of its consolidation plan to focus more on its lending business. 

Operating since 2019, Finja has facilitated over Rs. 11 billion in financing through over 200,00 loans disbursed to over 25,000 SMEs across 35 cities. 

The new operator, OPay, maintains experience working in different markets in similar economies, and its entry is expected to benefit the Pakistani market too. 

Paymax Planning to Wind up Operations in Pakistan.

CMPECC, operating under the brand name Paymax, also decided to roll back its business after carrying out its operation for more than one year. 

The operator was awarded a commercial license in March 2022, which launched the service of e-money wallets for merchants and consumers. 

SBP advised M/s CMPECC (Pvt) Ltd., currently in the ‘Commercial stage’ under Regulations for Electronic Money Institutions (EMIs), to refund all outstanding funds to its e-money wallet holders immediately. 

The operator can sell out its license to a new operator, or its license will ultimately be revoked by the regulator. 

The exit of the Chinese operator is not a good move in the financial sector; however, a Chinese operator with roots in the same group did not sustain its business of branchless banking previously in the country. 

Going forward the competition among fintech operators will increase gradually, mainly among those providing services such as nano-loans and e-money wallets in a limited area of operation. 

The fintech operator with customized and innovative services for a target segment of customers will even get a good response from the local market. 

The central bank allowed fintech operators to launch international remittance services in its recent regulations, which will provide a big opportunity for fintech operators to work in this direction.

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