A recent initiative initiated by the Pakistani government surrounding digital wallets has been hailed a success by Prime Minister Shehbaz Sharif. PM Sharif commissioned the partial release of last month’s Ramadan Relief Package through digital wallets for the first time.
Approximately Rs 20 billion was handled by the IT & Telecommunications Ministry and sought to make aid and welfare distribution a more “efficient” and “respectful” process. The move was in alignment with the Digital Nation Pakistan Bill, which parliament passed in the New Year, aiming to transition Pakistan into a digitally empowered country.
The data behind the digital release of April’s Ramadan Relief Package
PM Sharif said almost four-fifths (79%) of April’s Ramadan aid package was sent via digital wallets, describing the transactions as concluded “seamlessly and transparently”. PM Sharif confirmed that all welfare distribution would be completed via digital wallets by 2026.
It’s said that more than 900,000 locals received their aid via newly created digital wallets, dished out across almost two million transactions. The PM added that a large percentage of new digital wallet owners are women, with the government succeeding in its mission to close the digital gender and diversity gap.
IT Minister, Shaza Fatima Khawaja, also went to great pains to insist that the recent initiative was anything but a gimmick. Khawaja said the initiative was about encouraging “long-term digital habits” that give individuals more fiscal freedom.
Digital wallet demand is on the rise in Pakistan
In Q4 2024, retail payments via digital wallets rose 12% according to new information from Pakistan’s central bank. More than three billion transactions were placed in the final three months of last year to the tune of Rs 154 trillion.
Many of the world’s leading digital wallets are making their services available to Pakistanis. E-wallet platforms like Skrill and Neteller have already started to support various services like money transfers and online payments in Pakistan. These platforms have established themselves as convenient digital wallets in all four corners of the globe, acting as an efficient shield between individuals’ bank accounts and online portals and service providers.
Today, Skrill’s most popular use cases include paying for video gaming fees and services online, sports betting, forex trading, and iGaming. Skrill is already trusted by many of the world’s leading forex brokers, including FxPro and FXTM, while established online casinos like Wildz have also been supporting Skrill deposits and withdrawals for some time, alongside additional payment methods like PaysafeCard, MuchBetter, and Payz.
Pakistan is also attracting some of the biggest fintech brands in the world right now. Just a couple of months ago, Google Wallet confirmed it would be entering the Pakistani market. Google Wallet has joined forces with multiple local banks, making it possible for account holders to make online payments via the Google Pay app.
There are still several roadblocks for the country to overcome before it can declare victory in the push to digitise the country and its economy. One of the biggest hurdles is Pakistan’s largely undocumented economy, which the government believes is as large as the formal economy.
Currently, operators and traders in the cash-based undocumented economy exist out of reach of the government and therefore avoid paying taxes on their income and profits. Digital payments would therefore be a direct threat to this economy, since the transparency of digital transactions would leave the undocumented market severely exposed. This would naturally have significant benefits to Pakistan’s tax take, improving the level of funds it can provide for public services nationwide.
Statista believes the total transaction value of digital payments in Pakistan will hit $35.62 billion by the end of this year. It also expected this market to grow at a compound annual growth rate (CAGR) of 21.12% between now and the turn of the next decade, reaching a value of $92.83 billion by 2030.