Fintech in Pakistan

Fintech – A Promise of a Richer Life

Not all lives are equal

Few resources are as evenly distributed as time. With all else kept equal, you and I have the same amount of time in a day, a week, a year and more or less, over our lifetimes. As clichéd as it sounds, the real difference lies in how we spend our time. With that being said, not all lives are equal. They are certainly not equal if you compare the generations before us where travelling a thousand miles took a week, whereas now it is a day trip. Even today, there is a bifurcation between contemporaries due to the rise of digitalization. With a promise to make lives more efficient and ultimately richer Fintech came into the limelight.

It’s how you use it

Though we may not be able to add another hour to our day, we can surely try to do more within the same timeframe. Take the basic idea of ‘Value of Time’ used in multiple industries including transport, where the value of time is the amount a person is willing to pay in order to save time. If you make $10 an hour at your 9-5 job and it takes you an hour go to work and back, essentially, you are making $8 an hour for the ten hours you dedicate to your work. Though you may not have necessarily spent those two extra hours of travel making more money, they could have been spent elsewhere improving the overall quality of your life. The point is, a reasonable amount of time is spent around activities rather than on activities. It might have been considered a part of the package till recently, but now entire industries have been formed that cater to reducing the time wasted through the day which adds up to days at the end of the year. If I spend an hour a day running errands such as paying my bills, standing in line at the ATM or returning money to my friend, by the end of the year, I have spent 15 days worth of time that could have been utilized to better my well-being.

So, how do you use it?

Here enters Fintech, with a promise to make lives more efficient and ultimately richer. Financial Technology or Fintech is very simply the elevation or streamlining of financial transactions through technology. Though the benefits of financial technologies extend in multiple directions, what I want to focus on is the invaluable return of time to the end consumer. Case-in-point would be local transfers or interbank transactions which tend to be a bane for most people. Suppose you have to pay your child’s school fee but unfortunately your bank and their bank are not the same. The traditional method would be to go to the ATM, get money out of your account, go to the school’s bank and make the payment. This is exactly the type of time that is savable. Fintech and more specifically, bill aggregators like Paypro,

Imagine you could simply receive the invoice on your phone. You would access your bank online and you would select Paypro and pay through the same portal any bill or fee, sitting from home. This is what Paypro is doing today by aggregating a range of industries on their portal. From education to health services, Fintech, via companies such as Paypro, is streamlining and simplifying transactions that shave off valuable minutes, if not hours, for the end consumers. On the other side of the transaction, businesses tend to value time as much as the end-user. Paypro also helps in reducing the work required to generate, receive and tally transactions as well.

Photo Courtesy: Djim Lioc

Fintech extends beyond just billing. All your personal transactions, crowdfunding, mobile payments and blockchain wallets fall under the same umbrella. The time you save ordering and paying for household goods, which has seen a massive increase during the lockdown, is all thanks to Fintech.

Early-adapter’s delight

Countries like China and India are much ahead in creation and adaption of such processes and technologies. Pakistan seems to have a dependence issue on paper money. There is a myriad of reasons for this but none justify resisting the change. From the factors that create resistance, sticking to our comfort zone and low levels of education seem to be the major hurdles. Even with successful companies like Easypaisa, the average person is dependent on the corner shop employee to help him through the transaction. Technology illiteracy is as big an issue as formal education and Pakistan’s masses are at a disadvantage on both ends. Those that adapt to the change, that manages to incorporate technology on multiple levels in their lives will outperform, outplay and eventually outlive those that do not.

Photo Courtesy: Morgan Housel

A warning for those who do not

The burden to fight this resistance will have to be placed on the government who will have to ensure no one is left behind. They must help the rest of us break our old habits for the greater good by driving behaviour, with either carrot or stick. A small example of what is working is the creation of E-pay by Punjab Information Technology Board for online tax payments. This was further incentive as they initially offered 25 per cent discounts on Car Token taxes. Though it does not address the lower economic classes as much as others, I feel it is a step in the right direction. If nothing else, the documentation created justifies the effort. But the success of the impact speaks through the numbers alone, with over Rs. 10 Billion volume through 2 million unique transactions in less than a year. The adaption has had a snowball effect with transactions increase tenfold over the last few months.
Perhaps we need to kill certain habits cold turkey such as ‘Cash on delivery’, but the decision must come from the government in coordination with larger corporations. This is not a habit we can taper. But it is definitely one that has stagnated our quality of life.