Pakistan set to expedite branchless banking with Fintech by mid-2018

Fintech is going to revolutionize the financial sector of Pakistan by the mid of 2018, as the telecom regulator, PTA is expediting online transactions across all mobile phone networks, in a quite similar manner we make a phone call from one network to another. PTA is planning to award Third Party Service Providers’ licenses by June or July 2018 to ramp up financial inclusions across the country, as reported by Express Tribune.

Fintech which is the short-form of financial technology is an umbrella term used for digital banking services. In the current discussion, it can mean the ability of users to make financial transactions from one platform to any other account of a different mobile network, all over the country.

As of now, Jazz’s Mobicash, UBL’s Omni, Telenor’s Easypaisa are providing mobile-based branchless banking services, but online transactions cannot be made from one service to another.

PTA has moved forward by accepting applications for the Third Party Service Providers’ licenses to promote Fintech and develop a better system of connection between different service providers. According to a statement by PTA,

“We have received two applications and the Third Party Service Providers’ system is expected to be launched in mid-2018. The third-party framework will also be critical for the launch of Asaan Mobile Account under the National Financial Inclusion Strategy.”

This step will reduce hard cash transactions and will eliminate the threat of cash theft. The system will allow users to make transactions easier from one wallet to another, or from a wallet to the bank account.

According to PTA, it is an open licensing offer and can be expanded according to the need of the market. The fee of licensing of the Third Party Service Provider is Rs. 1 million to Rs. 10 million. Meanwhile, the performance bond is also mandatory. There are other regulatory dues like annual license fees, which is 0.5% of the total revenue of the license.

Pakistani market expects to see more digital financial services after the rollout of Third Party Service Providers’s platform.