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Pakistan Country Report

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  • Published Date: October 2021

PAKISTAN CARDS & PAYMENTS REPORT

The market report gives a comprehensive overview of the cards, payments and consumer banking market in Pakistan, with clearsighted commentary backed by relevant data.
This market is primed for a massive shift toward digital payments thanks to the convergence of government policy, banking establishment ambitions and an exponential rise in mobile phone usage.
With an enormous unbanked population, new low-cost bank accounts for lower-income groups and the 2016 launch of a domestic payment card scheme PayPak (extended in 2021 for e-commerce use) have proved decisive.
New players, armed with this report, will fare better if partnered with local financial institutions.

What you can learn from this Pakistan cards market report:

How government strategy is transforming Pakistan payments
Which initiatives have worked – and which have not
Why Pakistan is a greenfield market for credit cards
How the domestic debit scheme has fared since launching

PAKISTAN COUNTRY REPORT | KEY FACTS

  • At almost 90 percent of all transactions in the country, cash is the most popular payment option in Pakistan. Just 28 percent of adults had a bank account in 2020.
  • Branchless banking, a mobile payments option for the unbanked, operates through a little under half a million agents, serving some 37 million active accounts as of 2020.
  • There were only 1.7 million credit cards and 27.6 million debit cards in circulation in 2020; combined purchase volume reached $3 billion from 107m transactions in that year.
  • Online spending volumes have increased markedly, spurred by pandemic-related restrictions.
  • Five local issuers dominate credit cards: Bank Alfalah, HBL, MCB, Askari Bank and UBL. This quintet was responsible for some three-quarters of the market at the end of 2020.
  • Pre-tax profits in credit cards reached an estimated $49 million in 2020--the preponderance of Premium credit cards, with high rollover rates and fees, fuels this performance.
  • Visa and Mastercard are the leading networks. However, UnionPay has grown over the past few years to become the second-ranked debit card network by cards in issue. The domestic debit scheme PayPak is also present.
  • Merchant acquiring services in Pakistan are offered by just nine banks, who are also the country's major card issuers.
  • To promote greater competition in merchant acquiring, the central bank has capped the merchant service fee for POS payments at between 1.5 and 2.5 percent since April 2020.
  • Branchless banking is growing at a phenomenal rate, with the number of customers trebling to 15 million in 2015.
  • Despite three years of strong growth, consumer credit outstandings in Pakistan remain below pre-crisis levels.

Pakistan Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Pakistan Payments Data Tables

Appendix I: Demographic and economic indicators

Data table 1: Demographic and economic indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Estimates and forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Estimates and forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates to 2022.
Data table 5: Account penetration: 2015-2020. Estimates and forecasts to 2024.
Data table 6: Consumer payment: trends 2015-2020. Estimates and forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Estimates and forecasts to 2022.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 15: Prepaid/e-money cards metrics: 2015-2020. Estimates and forecasts to 2024.

Appendix IV: Mobile payments

Data table 16: Mobile proximity payment metrics: 2017-20. Estimates and forecasts to 2024.
Data table 17: Mobile P2P payments: 2015-20. Estimates and forecasts to 2024.

Appendix V: Profit pool

Data table 18: Pakistan market profit pool: 2015-20. Estimates and forecasts to 2024 including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 19: Networks' credit card market shares: 2015-20. Estimates and forecasts to 2022.
Data table 20: Networks' credit card data numbers: 2015-20. Estimates and forecasts to 2022.
Data table 21: Networks' credit card billed volume: 2015-20. Estimates and forecasts to 2022.
Data table 22: Networks' number of credit card transactions: 2015-20. Estimates and forecasts to 2022.
Data table 23: Networks' average credit card transaction value: 2015-20. Estimates and forecasts to 2022.
Data table 24: Credit card interchange fees by network: 2015-20. Estimates and forecasts to 2022.
Data table 25: Networks' debit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 26: Networks' debit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 27: Networks' debit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 28: Networks' number of debit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 29: Networks' average debit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 30: Debit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.

Appendix VII: Key retail banks and issuers

Data table 31: Key credit card issuers market shares by credit card numbers: 2017-2020. Estimates and forecasts to 2022.
Data table 32: Key issuers market shares in credit card outstandings: 2017-2020. Estimates and forecasts to 2022.
Data table 33: Key debit card issuers market shares by debit card numbers: 2017-2020. Estimates and forecasts to 2022.

Appendix VIII: Acquirers and processing

Data table 34: Merchant acquirer credit card market share: Estimates for 2021.
Data table 35: Credit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 36: Merchant acquirer debit card market share: Estimates for 2021.
Data table 37: Debit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 38: Credit card issuer/issuing processor relationships
Data table 39: Credit card acquirer/acquiring processor relationships
Data table 40: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 41: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix IX: Online acquiring

Data table 42: Online merchant acquirer market share. Estimates for 2021.

Pakistan Country Report | Selected Extracts

Demographics and Economy
Around nine million people of Pakistani origin live and work outside the country. They are a critical part of the economy, with foreign remittances supporting the country's balance sheet. In the first half of 2021, remittance inflows totalled $14 billion.

Payments Environment
Payment cards are not a popular payment option in the country. In 2020, there were just 1.7 million credit cards and 27.6 million debit cards in circulation, with a combined transaction value of $43 billion from 592 million transactions.

Cards market
At the end of 2020, there were 41 million payments cards in circulation in Pakistan. Payment cards here include credit, debit, proprietary, social welfare and prepaid cards.

Mobile Payments
With mobile wallet penetration expected to increase substantially over the next few years, it is expected that social welfare payments and other B2C payments will increasingly be disbursed through this channel.

Profit Pool
At the end of 2020, there were 1.7 million issued credit cards in this market: it is estimated that this total will increase by around 7% to reach 1.8 million cards in 2024.

Card Networks:
Visa is the market leader in terms of the number of credit cards in circulation and billed volume with a market share of 73% and 68% in 2020, respectively. At about 70% in 2021, Pakistan has one of the highest proportions of unbanked adults in the world. There are just 30 million debit cards in circulation among 135 million adults in 2021.

Key Retail Banks and Issuers
There were 33 retail banks and 11 microfinance banks operating in Pakistan as of June 2021. The top five retail banks, in terms of asset value, are Habib Bank Limited (HBL), National Bank of Pakistan (NBP), United Bank Limited (UBL), Muslim Commercial Bank (MCB) and Allied Bank.

Acquiring and Processing
Merchant acquiring services in Pakistan are offered by nine banks, which are also some of the country's major card issuers. Major issuers in the country have traditionally kept all issuing-processing operations in house and typically only outsource card printing and embossing operations

Online Acquiring
E-commerce is at an early stage of development in Pakistan and falls significantly behind its peers in the region. Pakistan's B2C online sales were estimated at $1.3 billion in 2020, boosted by the country's lockdown measures.

Regulatory and Markets Information
As the official regulatory body overseeing the banking sector in Pakistan, the SPB (State Bank of Pakistan, central bank of the country) ensures that banks comply with local and global regulatory standards

Pakistan Payments Report | Entities Referenced

1Link
Abu Dhabi Group
Allied Bank
American Express
Arab Financial Services
Askari Bank
Bank AL Habib
Bank Alfalah
Bank of Khyber
Barclays Bank
China-Pakistan Economic Corridor
Citibank
Credit Information Bureau
Daraz.pk
DataCheck
DCL
Direct Sales Agents
DSAs
Dubai Islamic Bank
Easypaisa
EasyPay
eCIB
Electronic Credit Information Bureau
Faysal Bank
First Data
Foodpanda.pk
Habib Bank
HBL
HSBC
International Finance Corporation
JazzCash
JCB
Karandaaz
Keenu
Mastercard
Masterpass
MCB
Meezan Bank
Mobilink Microfinance Bank
Muslim Commercial Bank
National Bank of Pakistan
NBP
Network International
Orix Leasing
Pakistan International Airlines
Pakistan Telecommunication Authority
pakwheels.com
PayPak
PIA
Raast
shophive.com
Silkbank
Social Security Programme
Soneri Bank
SPB
StanChart
Standard Chartered Bank
State Bank of Pakistan
Tameer Microfinance Bank
Tasdeeq
Uber
UBL
UnionPay
United Bank Limited
UPI
Visa
World Bank

MORE ASIA-PACIFIC CARDS & PAYMENTS REPORTS

Reports include detailed market and competitor intelligence on payments cards, e-money, acquiring, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and finance experts.

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