FinTech: Checkout.com and Pakistan Payment Gateway NIFT Sign Deal
The Memorandum of Understanding is for collaboration between the two entities for Pakistan’s payment systems.
Incorporated in September 1995 as a joint venture between a consortium of six major Pakistani banks and entrepreneurs from the private sector, NIFT operates the first domestic payment gateway for Pakistan. Its NIFT ePay service allows for the aggregation of all different digital payment instruments available in Pakistan. It also enables consumers to pay for eCommerce purchases or against business invoices digitally.
Meanwhile, checkout.com is a global payment provider offering transactions in more than 150 different currencies. It accepts payments from all major international cards, and other digital methods such as PayPal, Wechat, Apple Pay, and Google pay to facilitate payments to and from Pakistani merchants and businesses.
Unaddressed opportunity in Pakistan
Under the agreement, the two partners will leverage each other’s infrastructure to provide digital payment services in Pakistan. The country’s residents mostly lack access to modern, digital financial services, while the informal economy is widely prevalent.
The arrangement will provide better payment options to Pakistani businesses and firms, particularly Pakistani exporters.
Pakistan has one of the lowest financial inclusion ratios in the world. Currently, only 21% of the population has access to traditional banking services in the country, just 7% of whom are women. One reason for this is financial literacy, which stands at a low 13% according to the Tribune, Pakistan.
In fact, World Bank Country Director for Pakistan Patchamuthu Illangovan claims that an average Pakistani citizen performs just one digital transaction every year.
According to McKinsey Consulting, the potential size of Pakistan’s digital financial market could be as large as $36 billion. Encouraging the countrywide use of digital payments could improve the country’s GDP by 7%. In the process, it would create 4 million jobs and draw more than $250 billion worth of deposits into circulation.
“Pakistan represents one of the biggest opportunities for global enterprise companies and is home to some of the most innovative businesses in the region,” said Guillaume Pousaz, CEO at Checkout.com. “Together with NIFT, we’ll offer seamless localized payments, supporting merchants with better customer experiences and more revenue opportunities.”
A boost to Pakistan’s digital payment landscape
“This would strongly support the vision of allowing Pakistani exporters to collect payments through different local and international payment instruments,” said Haider Wahab – CEO NIFT. “The collaboration is not only important for NIFT but also creates value for a new Pakistan’s digital payment landscape.”
Related Story: UK-based Checkout.com Lands $150M at a $5.5B Valuation
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