KARACHI: Nationwide adoption of digital payments by 2025 can boost the size of the economy by seven per cent, create four million jobs and generate $263 billion in deposits.

Speaking to a group of journalists at a recent press briefing, UN-backed Better Than Cash Alliance Pakistan Lead Raza Matin said digital payments adoption by micro and small and medium enterprises (MSMEs) will improve their cash flows and reduce costs while letting them gain new customers, transact remotely and access credit. “Digital payments can be a key tool to help entrepreneurs overcome systemic challenges,” he said.

The Better Than Cash Alliance is a United Nations-based partnership of governments, companies and international organisations that accelerates the transition from cash to responsible digital payments to advance the sustainable development goals (SDGs).

Unveiling a detailed report titled “Realising the promise of responsible digital payments for merchants in Pakistan,” the alliance’s country lead said even though MSMEs represent over 90pc of businesses in Pakistan, they remain hamstrung by their dependence on cash. “Expanding digital offerings to women customers represents a market opportunity of more than $650m or Rs101bn,” he said.

Women-led MSMEs are marginalised and unrepresented in policy forums even though they form half of the country’s population. Societal norms hold women back, making it harder for them to travel or conduct business, he said. Their exclusion means the needs of their enterprises also go unheard.

The report estimates that only one-fifth of the population accesses the formal banking system. MSMEs do not get served by the financial sector as exorbitant interest rates — topping 30pc — cripple the few financial products offered to such enterprises.

Cash usage remains “stubbornly high” as political instability undermines well-intended efforts to modernise the payments ecosystem and erodes trust in business owners.

Published in Dawn, October 3rd, 2023