China Mobile Pakistan (CMPAK) and Electronic Commerce Company Limited (ECCL) obtained the Electronic Money Institution (EMI) License from State Bank of Pakistan (SBP) in March 2022. After that move, it decided to enter the market of digital financial services.
Following the acquisition of the license, CMPAK ECCL launched its commercial digital payments system. It was branded as PayMax and aimed to further its vision and mission of a more financially and digitally inclusive Pakistan.
In order to offer financial products that address consumer pain points PayMax plans to collaborate with financial institutions and solution providers from a variety of industries. This means that the company should be able to offer products such as nano loans, handset financing, cross-border payments, insurance, channel interoperability, and merchant financing.
With PayMax, users can register their mobile account by completing a straightforward know your customer (KYC). Besides, users can carry out Cash Deposits and Cash Withdrawals, transfer money to or from any bank or wallet in Pakistan, and pay more than 1700+ online Billers.
In Pakistan, a developing country, a sizable portion of the economy is still undocumented and ran through conventional channels that mainly rely on the use of cash. This restricts economic potential and growth. Paymax seeks to offer smooth digital payment options to the approximately 60% of adults who lack bank accounts.
According to the World Bank, Pakistan has the third-largest adult population without a bank account in the world – over 100 million adults. In other developing nations like Kenya, China, and India, phone-based banking has become popular with the lower classes.
Moreover, in Pakistan, 82% of women lack access to banking services. Therefore, a banking on equality policy now requires banks and financial institutions to open 20 million accounts for women by 2023 in order to guarantee greater financial inclusion. However, due to enduring obstacles such onerous documentation requirements, distance from bank branches, lack of accessibility to suitable products, and constrictive social and cultural norms, women's participation in financial services has remained low.
The international financial institution thinks Pakistan's market for digital transactions has enormous potential. Widespread use of digital payments, according to McKinsey, ‘may boost GDP by 7%, creating four million jobs and circulating more than USD 250 billion in deposits’.
Pakistan is notorious for being heavily dependent on cash, but the country is developing, and there is a new trend where people are embracing digital payments.
According to SBP, digital payments surged dramatically in Pakistan during the fiscal year 2021–2022 as a result of rising internet and mobile phone use. A report states that during the time period, there were 8.4 million users of mobile phones and 12.3 million users of internet banking. It also states that, in terms of transactions, mobile phone banking increased by 100.4% to 387.5 million during the year, while internet banking increased by 51.7% to 141.7 million.
The country's rapid adoption of digital payment systems, according to the central bank, is the result of initiatives like promoting and developing interoperable payment infrastructure, issuing enabling regulations, particularly for retail payment providers, ensuring the trust and security of digital payment channels, and promoting new technologies.
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