By 2022, fintech had firmly established itself as one of the most promising and rapidly growing sectors in Pakistan’s digital economy. The shift from cash-heavy transactions to digital payments was no longer just a vision—it was a necessity driven by financial inclusion imperatives, smartphone penetration, and a vibrant startup ecosystem.

The Regulatory Foundation: SBP’s Proactive Role

The State Bank of Pakistan (SBP) played a critical role in laying down the regulatory groundwork for fintech to thrive. Key developments included:

• Digital Bank Licensing Framework: In early 2022, SBP issued guidelines for fully digital banks, allowing new entrants to offer branchless services.
• Raast – Instant Payment System: Pakistan’s first real-time payment system was launched by SBP to enable secure, low-cost transactions for individuals and businesses.
• EMI Licensing: Electronic Money Institutions (EMIs) like Sadapay, Nayapay, and Finja were granted licenses to offer wallets, P2P transfers, and merchant payments.

These initiatives reduced friction in the financial system and gave fintech players a clearer path to compliance.

Boom in Fintech Startups

Pakistan saw a surge of fintech startups that targeted everything from personal finance to SME lending, payment gateways, and buy-now-pay-later (BNPL) models. Some notable companies included:

• Sadapay: Offering a mobile wallet and Mastercard-powered debit card with no hidden fees.
• Nayapay: Focused on digital payments and launching a “super app” targeting students and young professionals.
• TAG: Raised millions to build neobank services, including early salary disbursement.
• Finja: Using alternative credit scoring to offer loans to micro and small enterprises.

Venture capital poured in—Pakistan’s fintech sector attracted nearly $100 million in 2021 and 2022 combined, an unprecedented milestone.

Financial Inclusion Still a Challenge

Despite the progress, financial inclusion remained a daunting challenge. According to the World Bank Findex Report, only 21% of Pakistani adults had a formal bank account in 2021. Women and rural populations were especially underbanked.

Fintechs attempted to bridge this gap through mobile-first solutions and agent banking models that did not require traditional infrastructure. However, digital literacy, smartphone affordability, and trust in digital systems continued to hinder rapid adoption.

The Interplay with E-commerce and Ride-Hailing

The growth of fintech was tightly coupled with adjacent digital sectors. E-commerce platforms like Daraz integrated mobile wallets and BNPL options. Ride-hailing giants like Careem and Bykea enabled in-app wallets, making it easier to pay drivers or transfer money.

This digital ecosystem effect was pivotal—fintech wasn’t growing in isolation, but as a utility that supported broader digital transformation.

Cybersecurity and Data Privacy Concerns

With the digitization of financial services came heightened concerns around data protection and cybersecurity. Pakistan lacked comprehensive data privacy laws akin to GDPR, leaving users vulnerable to breaches and misuse of personal data.

SBP issued some baseline cybersecurity guidelines, but enforcement remained weak, especially among smaller EMIs and startups operating at high velocity.

Looking Ahead

By the end of 2022, Pakistan’s fintech scene had evolved from a fringe movement to a central pillar of the country’s digital future. Key priorities moving forward included:

• Expanding services to the unbanked and underbanked
• Promoting interoperability among digital wallets
• Strengthening the regtech infrastructure
• Aligning fintech growth with the broader National Financial Inclusion Strategy (NFIS)

Pakistan stood at a critical inflection point—if momentum was sustained, fintech could become the backbone of inclusive economic growth in the coming decade.

References:

State Bank of Pakistan – Digital Bank Licensing Framework

https://www.sbp.org.pk

Karandaaz – Fintech Landscape in Pakistan (2022)

https://karandaaz.com.pk

World Bank – Findex Database 2021

https://globalfindex.worldbank.org

TechCrunch – Pakistan’s TAG raises funding to build neobank

https://techcrunch.com

Dawn – Pakistan’s digital payments ecosystem gets a boost

https://www.dawn.com