With A Larger Population Than Brazil, Pakistan’s Newly Digital SMBs Offer Huge Opportunity

Editor’s Note: Erwan Gelebart, who was JazzCash’s CEO at the time of this interview, is no longer with the company.

It’s the fifth-largest country in the world based on population, but Pakistan and its millions of small merchants have been overlooked as the shift to digital hasn’t always meant giving them an easy way to accept cashless payments, according to JazzCash CEO Erwan Gelebart.

It’s one of the many reasons that small- to medium-sized businesses (SMBs) are central to JazzCash’s business.

“Even if consumers have the money and the willingness to pay for goods and services and the mobile wallets to use, merchants are the ones either accepting or declining” the method of payment based on what they can support,” he said.

Like many countries, Pakistan saw an eCommerce boom in the last 15 months due to the global pandemic, and retailers who were previously not using digital payments or selling online were forced to move online and open an account.

“They understood that for their business to survive, they needed to be less dependent on their physical outlets and accept digital payments,” Gelebart told PYMNTS’ Karen Webster.

Launched in 2012, the payments company has reduced the burden on merchants by making it easier to activate business accounts on the JazzCash platform, making self-registration more seamless and digital payments more efficient for business owners and merchants. Merchants download the app to capture relevant documents for standard know your customer (KYC)/anti-money laundering (AML) checks. In a few hours, merchants have an account and are ready to accept digital payments, Gelebart said.

An important feature in the business app is an invoicing system that allows businesses to bill their customers directly from their business app for services from a payment link received via email.

In a span of 15 months, the company has grown to be the leading mobile wallet platform and payment acceptance network in Pakistan, making it easy for merchants who started their own delivery service for example, to receive payments after deliveries to consumers’ homes.

Solving Merchant Onboarding In Developing Markets

Pakistan is known to be highly cash-dependent, so getting merchants comfortable with accepting digital payments — and then receiving funds into their bank accounts — also became an important part of the onboarding process. Many of these merchants don’t have a bank account, and for others, JazzCash is usually the first non-cash system they’re exposed to.

Gelebart said that “field soldiers” go storefront to storefront, explaining all of the reasons that cashless is a better, more secure payments option, and one that has the potential to bring more consumers with JazzCash apps to their doors.

Merchants who accept a JazzCash payment receive the funds immediately in their JazzCash account.

This onsite onboarding option, as well as the business applications that these now digital merchants need to operate their businesses has been key to JazzCash’s expansion across the country, building trust in the process, as “the same person will visit the same merchant until he’s comfortable using the system,” Gelebart said.

Regional Challenges For Digital Transformation

Even though smartphone penetration has significantly increased over the last few years, launching a super app in locations like Pakistan can solve more than just the app fragmentation challenges that pique the interest of consumers in developed markets, he said.

The prevalence of low-cost smartphones with limited storage capacity in emerging economies makes a super app with the key functionality powered by mini-apps more efficient and less costly. Gelebart said the super app that will prevail will end up being “the gateway to pretty much everything.”

“That’s obviously a position you want to have in this market,” he added.

Looking ahead, JazzCash plans to offer more dedicated services for the hundreds of thousands of merchants it currently serves. Instant loans that have been offered to consumers for years have now been extended to merchants, for example.

Gelebart said companies operating in these geographies can’t simply stop at being FinTech or digital firms; they have a duty to educate millions of Pakistanis on how to use a mobile account in addition to extending that information to merchants and helping them better understand why it’s convenient for them.

“We’ve learned a lot about these merchants, and the more we discuss with them, the more feedback we get from them,” Gelebart said. “We see how important the opportunities are to better serve them.”

Read more: Mobile Payments Bridge Cash And Digital Divide In Pakistan