KARACHI: The coronavirus pandemic is accelerating Pakistan’s shift toward a cashless future as more people have been forced to overcome the fear of using digital payment methods, senior bankers said on Wednesday after a survey showed a significant rise in online shopping.
The survey by financial giant Visa on the impact of the COVID-19 pandemic on payment behavior in Pakistan revealed on Monday that 43 percent of consumers have reduced in-store shopping since the virus outbreak, while for their e-commerce purchases more than half (55 percent) were using cards instead of cash on delivery (COD).
“When the consumers started using technological platforms for the payment during the pandemic, they realized that it is easy and secured way of making transaction,” Syed Ibne Hassan, vice president of National Bank of Pakistan, told Arab News. “The fear related to the use of technology has subsided now and consumers are more familiar (with it).”
Pakistan’s economy has been dominated by cash as this payment method is considered safe by both buyers and sellers. Most wages and salaries are paid in cash as well. The pandemic, however, has forced more people to use cards and contactless payments due to movement restrictions and lockdowns following the outbreak. People also not want to have to touch cash and risk contracting the virus.
The Visa survey showed that 55 percent of online shoppers expressed their willingness to continue to make more purchases online, and 49 percent said they will continue to opt more for paying with card over COD. For in-store purchases, 56% of consumers say they will continue to use QR code payments with their mobile phones more.
“This trend accelerated during the COVID-19 pandemic. For perspective, at Habib Bank Limited (HBL), digital transactions on HBL Mobile and Internet banking have risen by almost 90 percent compared with the same period last year. This growth proves that COVID-19 fueled a rise in digital payments in Pakistan,” Sagheer Mufti, chief operating officer at HBL, told Arab News.
Pakistan’s central bank expects that migration to electronic means will boost the country’s gross domestic product (GDP) by 7 percent, create 4 million jobs, and result in $263 billion in new deposits — representing a potential market of $36 billion by 2025.
With increased usage of digital payments, however, rises the probability of cyberattacks.
“With increased usage both among experienced and first-time users, cybercriminals too are keen to capitalize on the increased activity and vulnerability, especially of first-time online shoppers,” Neil Fernandes, Visa’s head of risk for the Middle East and North Africa, said.
“That is why educating consumers about safe payment behavior is critical not only for the moment but as we move forward and adapt to the new normal.”
Coronavirus accelerates Pakistan’s shift away from cash to digital payment, bankers say
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Coronavirus accelerates Pakistan’s shift away from cash to digital payment, bankers say
- 43 percent of Pakistani consumers surveyed by Visa have reduced in-store shopping since the virus outbreak
- Pandemic has forced more people to use cards and contactless payments due to movement restrictions and lockdowns
Washington says working with Pakistan to enhance civilian and military anti-terror capabilities
- Pakistan’s northwestern Khyber Pakhtunkhwa province has seen surge in militant attacks in recent months
- Southwestern province of Balochistan has also seen increase in strikes by separatist ethnic militants this year
ISLAMABAD: US State Department Spokesman Matthew Miller said this week Washington was working closely with Pakistan to enhance the counterterrorism capabilities of its civilian and military agencies, amid a rise in militancy in the South Asian nation.
Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province has seen a surge in militant attacks in recent months, which Islamabad says are mostly carried out by Afghan nationals and their facilitators and by Tehreek-e Taliban Pakistan (TTP) and other militant groups who cross over into Pakistan using safe haven in Afghanistan. The Taliban government in Kabul denies the charges, saying Pakistan’s security challenges are a domestic issue.
The remote southwestern province of Balochistan has also seen an increase in strikes by separatist ethnic militants this year.
“We continue to have an important bilateral counterterrorism partnership with the Government of Pakistan, and it includes regular high-level dialogues and working level consultations dedicated to enhancing both civilian and military capabilities to detect and counter these type of threats,” Miller said at a press briefing on Tuesday evening.
Responding to a question about media reports that eight Pakistani soldiers had been killed in the country’s northwest, and seven police officers abducted near the Afghan border, Miller said the US “condemned these and all terrorist attacks.”
“I would just say, as these horrific attacks against the Pakistani people continue, we remain committed to engaging with government leaders and civilian institutions to identify opportunities to build capacity in detecting, preventing, and responding to threats posed by militant terrorist groups,” the spokesman added.
On Tuesday, Pakistan said it had approved a “comprehensive military operation” against separatist militant groups operating in Balochistan. The government did not provide any details of the military operation such as when it would be launched and in which parts of the province and which security agencies would participate.
Pakistan, Saudi Arabia discuss ‘beggar mafia’ menace, vow crackdown — interior ministry
- Beggars abusing visas to beg in foreign countries has Pakistan worried it could impact genuine visa-seekers and religious pilgrims
- Interior minister says names of 4,300 beggars added to no-fly list, “zero tolerance policy” being adopted against beggar mafia
ISLAMABAD: Pakistani interior minister Mohsin Naqvi on Wednesday met Saudi Deputy Interior Minister Dr. Nasser bin Abdulaziz Al-Dawood in Islamabad and discussed the growing menace of Pakistanis traveling to the Kingdom on pilgrim and other visas and resorting to begging, the interior ministry said.
The trend of beggars abusing visas to beg in foreign countries has Pakistan worried that it could impact genuine visa-seekers and particularly religious pilgrims to Saudi Arabia. According to widespread media reports, Riyadh has raised this issue with Islamabad at various forums.
“Discussions on suppressing the mafia that sends beggars from Pakistan to Saudi Arabia discussed,” the Pakistani interior ministry said in a statement after Naqvi met Al-Dawood. “A zero tolerance policy has been adopted against beggars going to Saudi Arabia.”
The interior minister said the names of 4,300 beggars had been added to a no-fly list and an “effective crackdown” was being carried out across the country.
The two officials also agreed to implement a prisoner exchange agreement, with Naqvi saying legal proceedings for the repatriation of 419 Pakistani prisoners in Saudi Arabia would be “completed soon.”
Previously, Naqvi had tasked the Federal Investigation Agency (FIA) with cracking down on the network of beggars traveling illegally, saying it was damaging Pakistan’s image abroad.
Pakistanis are the second-largest expatriate community in the Kingdom, with over 2.5 million living and working in Saudi Arabia, the top source of remittances to the South Asian country.
Pakistani privatization chief pitches sale of PIA, other state entities to Azerbaijani officials
- Pakistan is looking to sell debt-ridden state enterprises as envisaged under $7 billion IMF program approved in September
- Pakistan wants to position itself as pivotal trade and transit hub connecting China and Central Asia with the rest of the world
ISLAMABAD: Pakistan’s privatization chief Abdul Aleem Khan on Wednesday met Azerbaijan’s economy minister Mikayil Jabbarov and discussed, among other issues, the sale of national carrier PIA and other loss-making state entities.
Cash-strapped Pakistan is looking to offload a 51-100 percent stake in debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund program approved in September. The process, however, hit a snag last month when the final bidding round attracted just one bid of Rs10 billion ($36 million) for a 60 percent stake in the national flag carrier.
PIA’s existing liabilities stand at approximately Rs250 billion ($896 million).
Pakistan is also trying to sell power distribution (discos) and other loss-making state owned companies that are a main hole in its $350 billion economy.
“Discussions with the Azerbaijani government on government-to-government and business-to-business partnerships regarding privatization in Pakistan were discussed in the meeting,” Khan’s office said in a statement after he met Jabbarov in Baku.
“Participation in privatization of PIA, Agricultural Development Bank, discos, utility stores and other projects offered.”
According to the statement from the Pakistani side, Khan said Pakistan and Azerbaijan could make “mutual investments” in the LNG and renewable energy sectors.
“There can be huge investments in the IT sector, telecom, agriculture, energy and other sectors,” Khan said, apprising the Azerbaijani official of cooperation opportunities in Pakistan’s communication sector as well. “We have to take concrete and practical steps to increase the volume of bilateral trade.”
Khan is in Azerbaijan on a two-day visit, and will attend various meetings aimed at discussing investment opportunities and strengthening bilateral relations.
Pakistan wants to position itself as a regional trade hub, leverage its strategic geopolitical position and enhance its role as a pivotal trade and transit hub connecting China and Central Asia with the rest of the world. In recent months, there has been a flurry of visits, investment talks and economic activity between Pakistan, China and Central Asian states, including Uzbekistan, Azerbaijan, Tajikistan and Turkmenistan.
Pakistan, Saudi Arabia discuss exchange of police, paramilitary forces, joint trainings
- Military and security cooperation is a strong aspect of close relationship between Islamabad and Riyadh
- They regularly engage in joint exercises, training programs to enhance their respective defense capabilities
ISLAMABAD: Pakistani interior minister Mohsin Naqvi on Wednesday met Saudi Deputy Interior Minister Dr. Nasser bin Abdulaziz Al-Dawood in Islamabad and discussed the exchange of police and paramilitary forces, as well as joint training programs between the two brotherly nations.
Military and security cooperation is a strong aspect of the close relationship between Islamabad and Riyadh. They regularly engage in joint military exercises and training programs to enhance their respective defense capabilities. Pakistan is also a member of the Saudi-led Islamic Military Alliance, which aims to combat terrorism and promote regional security. Since the 1970s, Pakistani soldiers have been stationed in Saudi Arabia to protect the Kingdom while Pakistan has also been providing training to Saudi soldiers and pilots.
“Discussion held on mutual exchanges of paramilitary forces and police and joint trainings,” the Pakistani interior ministry said in a statement after Naqvi’s meeting with Al-Dawood.
A day earlier, Pakistan’s Prime Minister Shehbaz Sharif also met Al-Dawood and expressed “satisfaction” over the implementation of recently signed business agreements between the two countries.
Pakistani and Saudi businesses signed 27 memorandums of agreement (MoUs) worth $2.2 billion on Oct. 10 during the Saudi investment minister’s visit to Islamabad. On Oct. 30, while Sharif was visiting Riyadh, Saudi Arabia announced it had enhanced the number of business agreements from 27 to 34 and increased their value to $2.8 billion.
Pakistan approves winter power package to spur demand, cut gas use
- Move to provide relief to businesses and citizens after steep increases in electricity tariffs following energy reforms pushed by IMF
- Utilities in Pakistan, many of which have had to curtail or completely cease operations in winter months, will also benefit
ISLAMABAD: The Economic Coordination Committee (ECC) of the Pakistan government on Tuesday formally approved subsidy-neutral discounted electricity rates during winter in a bid to boost consumption and cut the use of natural gas for heating, the finance ministry said.
The move is expected to provide relief to businesses and citizens, who have suffered from steep and sudden increases in electricity tariffs following energy sector reforms suggested by the International Monetary Fund (IMF). Utilities in Pakistan, many of which have had to curtail or even completely cease operations in winter months due to demand dropping by up to 60 percent from peak summer levels, will also benefit from the move.
Pakistan relies heavily on expensive natural gas and burning wood for heating during winter. Power consumption in Pakistan has declined 8-10 percent year on year over the past three quarters, according to energy ministry figures.
The new winter package, which will apply between Dec. 2024 to Feb. 2025, has been approved for the industrial, domestic, commercial and general services consumers of state distribution companies (discos) and K-Electric, the main utility in the port city of Karachi, “to enable optimum use of system generation capacity besides reducing gas demand due to shifting of favorabe demand toward electricity.”
“The ECC discussed the proposal and approved it, calling the subsidy-neutral interim relief initiative worked out by the Power Division as being timely and relevant in view of recent surge in electricity tariffs and the reduced demand across various consumer categories,” the finance division statement added.
The package would apply to incremental consumption over the past years and includes 18-50 percent discounts depending on various consumer categories and consumption slabs.
Incremental consumption will be calculated using a weighted average formula based on the last three years’ usage.
According to the power division, the base rate for domestic consumers is a minimum of Rs37.49 per unit and a maximum of Rs52.07 per unit, but additional consumption would be charged at Rs26.07 per unit for both categories. This would be 30 percent cheaper (Rs11.42 per unit) compared to a minimum rate of Rs37.49 and 50 percent (Rs26 per unit) compared to the maximum rate.
The energy ministry has previously said the move to slash winter tariffs will help industries reduce electricity costs by 7-8 percent at an optimal level, while stimulating industrial growth in the process.