In a series of panel discussions on digital payments in Pakistan, an information packed webinar was held by Badar Khushnood and Asfandyar Farrukh. While the previous two webinars touched upon Freelance payments and Account based payments, this one was about card based payments.  For those not aware of card based payments,

Card-based payments refer to payments made by using a Credit, Debit or an ATM Card. Cards based payments work on POS (Point of Sale) devices, ATM Machines as well as on websites.

You will need a good amount of time to go through 3 hours long discussion and we strongly suggest you should but we have picked up some points from the discussion to share with our readers.

Aymen Khan Kharal who is a business leader in VISA started his part by sharing the challenges being faced in Pakistan to accept cards based digital payments both by merchants and customers. 

Friction points in Card based payments

Biggest friction or challenge in Pakistan is that debit cards are blocked for e-commerce payments by issuing banks. In case a customer wants to purchase something online he will need to call his bank’s helpline to get it activated. Customer will be asked some questions for verification of identity. Once this is done the card will be activated for a few minutes (time varies from bank to bank) for the customer to immediately make the payment.  Though this practice is in place to safeguard customers from possible security breach and thefts yet this is one of the barriers. Many customers don’t even know this process and assume something is wrong with either the website where they are trying to make payments or with their cards. This, simply put is a barrier to trial generation which is critical to convert customer from cash based to digital payments.

Once a card is enabled for online payments, the next hurdle is high rejection rates. There are a number of reasons for rejection. Starting from very basic reasons like entering incorrect credentials or not having enough funds in account to an account being blocked for online payments. This is more of a headache for the merchant that discourages him to promote digital payments. 

Poorly designed checkout pages where customers have to enter a lot of details and limited knowledge on what to do in case of any dispute are two one of the major reasons customers don’t feel confident to try digital payments. 

Last but not the least, the complex and long onboarding process of merchants discourages them to move towards payments other than cash.

VISA‘s efforts to streamline value chain

Talking about VISA’s efforts, Aiman shared with the panel how VISA is collaborating with stakeholders in the value chain. Working with card issuing banks, their focus is to minimize risks by implementing simple yet effective rules to increase success rates.  Side by side, VISA is working with merchant acquiring banks to ensure a streamlined and simple onboarding process for merchants and payment gateways. 

Stay Secure campaign by VISA was aimed at educating customers about safe and secure digital payments. The said campaign is claimed to have reached 3 million pakistani users. Taking care of the other side of the equation i.e. merchant, Where you shop matters, and alliance with daraz are some of the key efforts made.

Changing trends 

Customers are getting comfortable entering their details on e-commerce websites and that is very important for building trust and helping shoppers incase of disputes. 

The boundary between In-store and online e-commerce transactions is blurring. Careem payments being a very relevant example where customers make in-app digital payment while being in real world

The new regime is quite tech friendly and is responsive to feedback and suggestions made by stakeholders and this is a very positive sign. 

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