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Experts call for efficient and inclusive payments systems in Pakistan

Experts call for efficient and inclusive payments systems in Pakistan

Senior Government officials, financial service providers recognize the importance of digitizing person-to-government payments

ISLAMABAD – Experts call for efficient, sustainable and inclusive payments systems for government receipts such as taxes, fees, and fines at a seminar in Islamabad.

The dissemination event for the “Global Landscape Study on Digitizing P2G Payments” was organized by Karandaaz Pakistan, chaired by the Federal Secretary for Communications, Mr. Khalid Masood Chaudhry.

The event presented numerous person-to-government (P2G) initiatives from across the world and the steps required to set up efficient, sustainable and inclusive payments systems for government receipts such as taxes, fees, and fines. Given the myriad benefits of digitizing P2G payments, Karandaaz Pakistan gathered together senior policy makers and practitioners from organisations such as the World Bank, IFC, CGAP, and United Kingdom’s Department for International Development (DFID) and private sector providers and thought leaders such as Telenor, Mobilink, Pakistan Microfinance Network and NRSP, for collective learning from similar global initiatives. Dalberg Global Development Advisors (Dalberg), the leading research organisation that authored the report, presented key findings in a live video conference followed by an interactive question and answer session.

Mr. Ali Sarfraz Hussain, CEO Karandaaz Pakistan stated, “Given that there is a dearth of systematic documentation of P2G digitization initiatives, the Global Landscape Study was commissioned with the primary objective of filling the knowledge gap on P2G payments.” Mr. Hussain added that Karandaaz Pakistan hopes to catalyze the endeavor to digitize payments.

The P2G report is the first-ever study to comprehensively examine the opportunities and challenges associated with digitizing P2G payments, including mandatory payments (taxes, bill payments and fines), payments for government services (fees for passport, visa), as well as co-payments for social benefits (pensions). To this end, a preliminary global scan of 61 initiatives, and in-depth analysis of 9 diverse P2G initiatives across 7 countries, including Rwanda, the Philippines, India, Tanzania, Ghana, Kenya, and Pakistan, has been conducted.

The report showcases P2G digitization initiatives ranging from setting up a national payments switch, e-governance platforms, and school payments, etc. Also while the report suggests that strategies for digitization need to be articulated using country specific scenarios in terms of infrastructure, regulatory environment, customer readiness, and stakeholder buy-in, it provides a practical framework which can enable policymakers to ascertain the country’s readiness and provide direction in its progress towards achieving the milestones required for complete digitization of its P2G payments landscape. The report also provides critical recommendations for Governments, Businesses, and Consumers, illuminating the path to a systematic digitization process.

The event was closed with remarks from Secretary Communications who stated ‘P2G payment flows are estimated at USD 375 billion for low- and lower-middle-income countries. This is not a small number and constitutes a significant proportion of government receipts, in many cases comparable with remittance, trade and FDI earnings. Digitizing these payments carries significant incentive for the government, financial service providers, and consumers.

Karandaaz Pakistan promotes access to finance for small businesses through a commercially directed investment platform, and financial inclusion for individuals by employing technology enabled digital solutions. The Company has financial and institutional support from leading international development finance institutions; principally United Kingdom Department for International Development (DFID) and the Bill & Melinda Gates Foundation. The Company has three work streams, Digital Financial Services, Corporate Investment and Credit and Knowledge Management and Communications. Karandaaz Pakistan is sponsored and governed by eminent Pakistanis and is managed by an experienced team with core expertise in international investment management and digital finance.

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