Can the future of Pakistan be cashless?

Byline: Amna S. Sandhu

Currently, only about 21% of Pakistan's adult population has formal access to financial services whereas, 34% of Pakistan's population uses a smartphone with a broadband connection and this number is expected to grow significantly due to increasing availability of inexpensive smartphones and internet services in near future. This discrepancy provides an opportunity to accelerate financial growth without the need for major investment in costly additional infrastructure. A recent study revealed that there are 27.3 million mobile wallet users in Pakistan with 87% year on year increase. Google, in a study, projected Pakistan as quickly becoming a digital-first country expectedly the fourth fastest growing digital economy by 2030.

The major players for e-wallets in Pakistan are linked with Telecoms such as Easypaisa, UPaisa, Omni and JazzCash among other service providers. Given Pakistan's current dynamics, development and use of digital financial services, the market is just ready for transition to cashless payments.

One of the major advantages of a cashless society is convenience in terms of ease of transactions. One no longer needs to carry cash, debit cards or even queue up for ATM. It is a safer and widely accessible option as it provides the freedom to transact from anywhere at anytime. Cash in hand is valuable but most vulnerable to theft ranging from individual crimes like muggings and robberies to institutional level crimes such as corruption, tax evasion, organized crime and other fraudulent activities. Even though, cyber fraud and hacking act as major threat in going cashless, they are easier to tackle with proper technology and setup in place whereas the worst part about cash is that it's mostly untraceable so once it's gone, it's really gone. It can be easily hidden and circulated without accountability.

Thus, linking all the citizens to an online database and all transaction being done through organized channels will enable the authorities to keep track of money and identify unusual activities in bank accounts. For example, tax agencies can effectively tackle tax evasion as all transactions, which were previously done illegally in cash will have to flow through the banking system helping government to increase tax revenue and target money laundering, a priority set by the current government.

Moreover, especially in developing countries like Pakistan, transparent cashless digital transactions can instil...