Major Developments in Pakistan’s Fintech Landscape During 2023

Innovative fintech service providers are still in high demand, and they are able to expand their businesses both practically and virtually through sustainable means.

However, fintech businesses that primarily intended to offer traditional services faced many difficulties, such as fierce rivalry and limited profit margins.

Ten fintech companies are operating commercially, offering a range of services and goods.

Four of the companies—also known as electronic money institutions—are subject to regulation by the State Bank of Pakistan (SBP). At the same time, the remaining six are licensed by the Security Exchange Commission of Pakistan (SECP).

These are some significant advancements in Pakistan’s fintech market.

ABHI Expands Its Footprints in the UAE

Pakistani Fintech ABHI furthered its global reach, primarily in the United Arab Emirates, by launching an account-to-account payment service in collaboration with Visa Inc. and YellowPepper, two well-known international corporations.

A few months ago, the government of the host country chose the fintech company to be one of the Future 100 companies in the United Arab Emirates.

For the fintech operator, 2023 was a busy year filled with numerous collaborations, awards, and projects. The company became the first in MENAP to be recognized by the World Economic Forum as a technology pioneer on a worldwide scale.

Furthermore, Omair Ansari and Ali Ladhubhai, the founders of ABHI, were chosen as Endeavour Entrepreneurs.

ABHI used its distinctive “AA” long-term and “A1+” short-term ratings to secure a ground-breaking Rs. 2 billion through Sukuk Islamic bonds. This is a first for a non-banking financial institution in Pakistan and the surrounding area.

Throughout the previous year, the fintech operator increased the reach of its offerings by means of investments and products. Under the BlueEX brand, ABHI purchased 2.7 million shares of Universal Network Systems Limited.

Additionally, it introduced AbhiKarobar, which offers COD financing to companies dealing with inflation issues.

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

Following its successful pilot launch and fulfilling all commercial and regulatory requirements, Akhtar Fuiou Technologies was granted a commercial license by the State Bank of Pakistan to operate its services.

The brand Digitt+ knows the business. The operator introduced e-wallet farmers, a novel tactic used by fintech companies to get a competitive advantage in the market.

Throughout the period of the previous year, the operator also inked numerous agreements for collaboration and partnerships with various organizations.

In June 2023, EP Systems received authorization from SBP to begin pilot operations inside its service zone, which includes an e-wallet for customers and merchants.

The operator’s wallet software, OneZapp, also gave the go-ahead for pilot operations.

With the strong backing of Systems Limited, its parent business, EP Systems developed many ways of functioning in the market.

In 2020, EP Systems also introduced OneLoad, a digital e-commerce platform, in collaboration with the International Finance Corporation.

The Bill & Melinda Gates Foundation contributed an additional $11 million to the company. In 2024, the EMI will receive approval to debut commercially.

SadaPay Allows Independent Contractors to connect with ApplePay and GooglePay.

With the debut of an exclusive service, SadaPay made it possible for independent contractors to get paid via ApplePay and GooglePay.

With the ability to fill the gaps more fully and meet the needs of the expanding community of freelancers who can now more easily receive payments from their global clients, this can be an important service in Pakistan’s financial system.

With 550 million users, Apple Pay is estimated to have more users than PayPal, which has 450 million.

In addition, Apple Pay’s payment volume is expanding exponentially and is four times more than PayPal’s.

With more than 2 billion iPhones with Apple Pay installed worldwide, the reach is enormous.

Freelancers can use this service to save their USD earnings and convert them to PKR at a later time. Additionally, they guarantee to settle the funds into your account in less than 48 hours and to provide the greatest exchange rates in the nation for this conversion.

CareemPay and CheckOut Retrendered Their Licenses

CareemPay and CheckOut have made the decision to discontinue their operations in the Pakistani market.

The two well-known fintech companies both withdrew their licenses independently, with approval in principle. This decision is allegedly the result of increased competition in financial institutions and economic uncertainties.

Their altered plans were bad news for the nation’s fintech scene because these two organizations have established operations in other nations, including developed economies.

The economy is doing much better than it was a few years ago, and there is a ton of room for growth in the local market already.

With their global reach, these two companies could introduce remittance services and allow independent contractors to use their skills to make a substantial contribution—something that other fintech companies could only partially accomplish.

In order to create policies that will allow them to introduce cross-border financial services, the banking regulator should persuade them to reconsider their choice.

Finja Sells its E-Money Wallet Division to OPay

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

Since its founding in 2019, Finja has helped more than 25,000 SMEs in 35 cities receive over 200,00 loans, facilitating approximately Rs. 11 billion in funding.

OPay, the new operator, has experience operating in several markets within comparable economies, and the Pakistani market is anticipated to gain from its introduction as well.

Paymax Intends to Wind up Operations in Pakistan.

After operating for more than a year, CMPECC, which goes by the name Paymax, likewise made the decision to scale back operations.

In March 2022, the operator received a commercial license to begin offering e-wallets to customers and retailers.

According to the Regulations for Electronic Money Institutions (EMIs), M/s CMPECC (Pvt) Ltd. is currently in the “Commercial stage.” SBP advised the company to promptly return any outstanding payments to the owners of its e-money wallets.

The regulator may eventually cancel the operator’s license, or it may be sold to another operator.

Although the Chinese operator’s departure from the financial sector is not a positive choice, a Chinese operator with ties to the same company did not manage to maintain its branchless banking business in the nation before.

The competition across fintech companies is expected to grow over time, particularly for those offering specialized services like e-wallets and nano loans.

The local market will even respond favorably to the fintech operator that offers unique and tailored services to a certain consumer category.

With its most recent laws, the central bank permitted fintech companies to introduce international remittance services, which will present a significant chance for these companies to move forward.

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