Visa, a global leader in digital payments, reveals a massive opportunity for digital transformation in Pakistan’s SME sector. A new whitepaper highlights that 85% of B2B transactions in Pakistan still rely on cash, representing over $121 billion ripe for digitalization.
Cash Still King: The Challenge for Pakistani SMEs
Despite a growing digital landscape, Pakistani SMEs face significant payment challenges. Outdated banking solutions, lack of awareness about digital options, and complex compliance hinder adoption. The State Bank of Pakistan (SBP) reports 55.6 million payment cards in circulation, predominantly debit cards, yet cash dominates B2B transactions. This reliance on cash creates inefficiencies and limits SME growth. Key sectors like agriculture, retail, and manufacturing, along with the IT sector’s international payments, are particularly impacted.
Unlocking SME Potential with Commercial Cards
Visa’s report emphasizes the transformative potential of commercial cards for SMEs. With $121 billion in SME B2B transactions ready for digital adoption, commercial cards offer a secure and efficient alternative to cash.
Key Benefits of Commercial Cards for Pakistani SMEs:
- Interest-Free Working Capital: Improve cash flow management.
- Simplified Cross-Border Payments: Facilitate global trade and international business.
- Business Credit Building: Enhance long-term financial stability.
- Real-Time Expense Tracking: Gain better financial control and insights.
- Enhanced Spending Controls & Data-Driven Insights: Optimize business spending.
Visa’s Vision for Digitalizing B2B Payments in Pakistan
Visa advocates for a comprehensive commercial card suite, offering flexibility, security, and financial control to SMEs. This initiative, coupled with partnerships between banks, fintech companies, and regulatory bodies, aims to drive financial inclusion, boost SME growth, and modernize B2B transactions across Pakistan. Umar S. Khan, Visa’s Country Manager for Pakistan & Afghanistan, emphasizes the crucial role of SMEs in Pakistan’s GDP and job creation, highlighting the transformative power of digital payments.
