PayPal will enter Pakistan’s local market in February

According to the State Bank of Pakistan(SBP),Pakistan’s share of gross domestic product (GDP) in the Internet, mobile and digital industries has risen from 52% to 60%.

In addition, against a backdrop of rising penetration of Internet services and smartphones, Pakistan’s e-commerce industry is growing at an unprecedented rate, with the B2C market growing even faster than the B2B market.

It is understood that Pakistan’s e-commerce market in just one year to achieve 93% growth, increased from 20.7 billion rupees in 2016-2017 to 401 billion rupees in 2017-2018.

According to the annual report of the National Bank of Pakistan for fiscal year 2018, the exchange data includes only digital channels, including credit and debit card transactions, bank transfers, mobile wallets and payments via prepaid CARDS and other online payment systems.

And behind the huge turnover, there is a large number of orders paid through the cash to payment system, so this kind of data is not included in the State Bank of Pakistan. According to the report, cash on delivery accounted for 80% to 90% of total sales, accounting for about 60% of Pakistan’s e-commerce value. This indicates that total e-commerce in Pakistan can reach Rs. 51.8 billion and Rs. 99.3 billion respectively in fiscal 2017 and fiscal 2018.

Online retail makes it easier for Pakistani consumers and sellers to link together, while lowering the cost of traditional retail channels, as a result, many companies in Pakistan are now focusing on multi-channel online retailing that offers products such as clothing, food, electronics and smartphones.

PayPal will enter Pakistan’s local market in February

Despite the rapid growth of the e-commerce market in Pakistan, there are still three major obstacles to Internet services, postal services and payment services.

Currently, 73% of the population has mobile phones, but only 59% use Pakistan’s 3G/4G services. The country has just 62 million Internet users. It is clear that problems with Internet speed, coverage and services have also hindered the development of e-commerce.
In addition, obstacles to delivery mechanisms, long delivery times and high payment costs also make it harder for sellers and buyers to make choices.

In the absence of a fast, secure and extensive payment system in the Pakistani market, it emerged earlier that PayPal would enter the Pakistani market next February.

It is understood PayPal has now reached a cooperation agreement with the price Pakistani bank.

Clearly, if the Pakistani e-commerce market can remove the three major obstacles mentioned, it will be able to expand its operations to other regions,

The McKinsey Global Institute (MGI) reports that Pakistan’s gross GDP will grow by 7% per cent (to $36 billion) and will create about 4 million jobs in 2016-2025 years through the spread of digital financial services