Crawling Towards a Cashless Economy
Banks and MFBs experienced a year-over-year growth of 28.6% in transaction volume and 21.4% in transaction value during FY23.
In FY23, electronic banking transactions accounted for 85% of the overall payments handled by banks, with the remaining 15% attributed to paper-based transactions. Various experts have suggested that by next year, more Pakistanis will prefer using their debit cards than withdrawing cash from ATMs. RAAST and other governmental policies that promote electronic money institutions have contributed to Pakistan’s move towards a cashless economy. Fortunately, these figures are not isolated; instead, other aspects of the economy are progressing in the same direction.
For one, Pakistan’s e-commerce space has grown significantly over the past year. Moving consumption from traditional brick-and-mortar stores to online markets is one of the steps needed for financial globalization. The e-commerce revolution is making the global business environment fairer and more inclusive, offering increased opportunities for small businesses. Currently, SMEs contribute 40% of the GDP of Pakistan and 25% in overall exports. Therefore, these businesses can further boost their growth through digitization.
Digitalization of money also facilitates the growth of fintech businesses. In short automating payments has the potential to turn money from a physical exchange into digital data, which can further drive fintech growth. All in all, digitizing the payment infrastructure in Pakistan not only drives economic growth by facilitating businesses but also ensures financial inclusion.
Therefore, in Pakistan, overcoming mobility and logistics challenges for business growth makes a cashless economy even more beneficial than it seems.
GRAPHIC
According to the World Health Organization (WHO) a child is killed in Gaza every 10 minutes.While this graph below represents the number of children killed in Gaza in 33 days (from October 7, 2023 to November 10, 2023). No other conflict or war zone (to date) in the world has seen this death toll of children in 2 years even compared to Israel's Gaza bombing of 33 days!
On November 15, 2023 for the 5th consecutive day, following the collapse of services and communications at hospitals in the north, the Ministry of Health (MoH) in Gaza did not update casualty figures. The reported fatality toll of Palestinians in Gaza as of 10 November, 2023 at 14:00 (latest update provided) stood at 11,078, of whom 4,506 were said to be children and 3,027 women. Another 27,490 Palestinians have reportedly been injured.
Pakistan’s FDI has been relatively stagnant over the last 5 years, averaging to a little under $2 billion. The need of the hour is to not only increase foreign investment but also redirect this investment to critical areas to ensure lasting growth and resilience. As we navigate the global investment landscape, Pakistan must rally behind the potential of sectors shaping a sustainable and prosperous tomorrow.
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