How does PayFast aim to dominate the eCommerce payments landscape in Pakistan?

There is an ambitious fintech startup in town and it is called PayFast! PayFast, a group company of Premier Systems Limited, is poised to become a homegrown fintech company paving its way not only in Pakistan, but across the globe. Its plans are calculated and precise, its efforts supplemented by an enabling ecosystem and its spirits heightened after the endorsement from the State Bank of Pakistan (SBP) to operate as a licensed entity.

PayFast, also known as Avanza Premier Payment Systems (APPS), was conceived by Mahmood Kapurwala (Late), the CEO of Avanza Solutions. Having envisioned that there was a lack of indigenous payment gateways in Pakistan, a country that was inevitably going to see a surge in digitisation of payments, Kapurwala approached Mr. Arshad Raza– CEO and Director of Premier Systems Limited, another privately held technology company that has a presence in the banking and telecommunications sector. Premier, being the largest ICT provider in the country and looking to diversify their portfolio, understood the need to establish a robust digital payments solution that has its roots in Pakistan and a presence globally.

PayFast was created in 2018. Shortly thereafter, Adnan Ali joined as founding CEO. With the company hopeful to appoint seasoned bankers with experience in fintech and digital payments and whose vision aligned with their goals, Mr. Ali created a team mixed with industry veterans and ambitious young professionals. Through their joint commitment, the company successfully received commercial approval from the State Bank to launch an eCommerce payment gateway in May of 2021. It was immensely unfortunate that only a month after they received commercial approval from the central bank, Kapurwala passed away.

Nonetheless, the past year has seen the company not only succeed, but thrive. Even without one of the founding fathers of the company and one of the partners exiting at the very onset, with Premier looking to wholly acquire PayFast from Avanza, it remains resolute about becoming a top-notch fintech company of Pakistani origin.

The need for PayFast

The purpose of existence of any fintech company is to digitise traditional banking functions through innovation and to minimize the domination of cash usage, which accounts for 90-95% of the ecommerce transactions in the country. This would likely help improve the financial inclusion ratio in Pakistan, especially amongst marginalized communities, which is a core goal for PayFast.

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The working hypothesis is that a cash economy underpins many of Pakistan’s setbacks. Pakistan’s macroeconomic problems have been a subject of news headlines and expert analysis not because it is doing great. If the government gets stuck every now and then with budget deficits, it is because a cash-based economy encourages tax evasion which consequently results in declining revenues for the government.

“We are in a debt trap where we go to the IMF again and again which then commands our economy according to their rules,” says Adnan Ali, CEO and director of PayFast.

So if the massive economy is digitised, tracking tax evasion and collecting revenue would be easy for the government which would then be able to spend more on measures that would alleviate people from poverty and improve financial inclusion rather than worrying only about repayment of debts. The fintech companies see themselves at the core of solving the problem of digitisation of cash and would likely go down as protagonists in the country’s economic history.

PayFast facilitates online payments for businesses of all sizes through its robust digital payment gateway solutions, which include PayFast Checkout for e-commerce merchants; PayFast Billing for billing institutions; and Payment Links for SMEs and freelancers without a website. The idea is that there is no business too big or too small to go digital. The company firmly believes that revolutionizing how payments are made by introducing simple and safe online payment methods would drive overall growth for the economy as well as facilitate an increase in financial inclusion for the masses.

“Globally the role of digitisation of economies has been played majorly by fintech companies. At the back of the digital economy, you will find fintech companies in many countries. In Egypt, for example, you have Paymob. You will find PayPal in the US and RazorPay in India,” says Mr. Ali.

They have support, too, from a prudent central bank in Pakistan which has been very progressive about bringing new technologies to the fore to enable digitisation of the financial system in the country. The State Bank has passed numerous regulations to allow innovative fintech companies to operate in Pakistan, all starting with PSO/PSP regulations announced by the central bank in 2014.

It is these PSO/PSP regulations that power payment gateways like PayFast. SBP’s rules for Payment System Operators (PSO) and Payment Systems Providers (PSP) define PSO/PSPs as financial technology companies that are “engaged in operating and/or providing payment systems related services like electronic payment gateway, payment scheme, clearing house, ATM Switch, POS gateway, eCommerce Gateway etc. acting as an intermediary for multilateral routing, switching and processing of payment transactions.”

PayFast has successfully licensed itself as an eCommerce payment gateway, regulated by the SBP.

Until at least 2019, however, digital payments did not see a spur in Pakistan largely because the digitisation was being driven solely by the traditional banking sector. The pace of adoption of digital payments in the country had not seen widespread growth, as such innovations were mainly bank-led, which proved to be restrictive in terms of cost and service offering due to widespread inefficiencies.

Until 2020, there were only two commercially operational PSO/PSP entities in Pakistan, both backed by commercial banks. Fortunately, the interest to set up PSO/PSPs swelled post-2020 because of two major developments. Firstly, the central bank had already conceived the idea of an indigenous instant payment gateway – RAAST – that would bring ease to end-to-end digital payments. Secondly, the rise of venture capital funding has grown tremendously in the country.

“If you look at the PSO/PSP list earlier, many global companies had applied. Fundraising was not easy earlier. We also did fundraising,” says Adnan. “Now in Pakistan, like global markets, after Covid, there was a huge impetus which increased the fundraising activity. When the interest rate fell in global economies, Pakistan emerged very quickly as a cheaper market where startup valuation was very low. The SBP introduced RAAST as well, EMI, and a progressive governor like Reza Baqir made the fintech space exciting. Syed Sohail Jawad of the SBP was also a large proponent of these advancements.”


These factors contributed to the rise of interest in fintech companies. Enabling regulations, an abundance of venture capital and a global pandemic set the stage for PayFast to be more than well positioned to take a risk in the Pakistani market. Accordingly, it decided to take this initial risk in the eCommerce sector. Despite barriers to entry being lowered and PayFast facing competition from peer fintech companies with the same aspirations, they remain confident in their abilities, letting the evidence speak for themselves.


The PayFast playbook

At the centre of PayFast’s ambitions is to become the story of a local company that went on to achieve the vaunted verb status in digital payments by making online payments the norm in its home country,  before representing Pakistan worldwide. At the moment, the plans are local but ambitions are regional (think MENA).

PayFast likes to call itself a purpose-built company which came into existence knowing the scope of PSO/PSPs and which was built specifically to fulfill that purpose. The market it operates in is heavily cash-dominated. About 90 per cent of eCommerce transactions in Pakistan are done in cash. The hazards of majority of the payments in cash are well recognised by eCommerce merchants: long cash recovery cycles restrain working capital while settlement is costly and time consuming. These issues constrain the growth of merchants and take time, money, and resources to oversee and address– especially when they are handled solely by large banking corporations.

Alternatively, having a dedicated fintech whose sole purpose is to provide ease and efficiency of its core service, a payment gateway, is sure to boost efficiency and promote revenue maximization by providing businesses with a range of convenient and reliable payment options for their customers to pay them with.

The indicators of customer interest towards digital modes of payment for eCommerce also show an encouraging trend. According to data obtained from the State Bank of Pakistan, e-commerce transactions are increasing rapidly. In terms of volume, eCommerce transactions conducted through eBanking channels in 2021 were 21.9 million as compared to 10.2 million in 2020. In terms of value, these transactions were worth Rs60.6 billion in 2021 as compared to Rs34.9 billion in 2020.

There is also a rise in the number of eCommerce merchants. Till June end 2021, there were 3,003 registered eCommerce merchants, according to the data from the central bank. That is an increase of 75% from the previous year when the central bank reported the number of registered eCommerce merchants at 1,707. Since 2017, the earliest for which numbers are available, registered eCommerce merchants increased from 571 to 3,003 till June 2021, averaging 54% growth since 2017.

On a quarterly basis, too, the first quarter of 2022 witnessed 86% growth (by volume) in ecommerce transactions as compared to the corresponding quarter of the year before that. PayFast’s growth aligns with these positive trends. According to Mr. Ali, they have witnessed hockey-stick growth..  Since its commercial launch, the company has experienced 5x growth on a month-to-month basis, onboarding notable startup fintechs like Chikoo, bSecure and Dukan to help advance their mission.

Part of the reason for this growth is because of the PayFast ethos of working closely with merchants and designing solutions to help them accept payments with ease. They have partnered with some of the biggest names of the business to diversify their suite of digital payment services. These include Bank Alfalah for card based transactions, 1Link for billing solutions and Union Pay international for mobile payments. “We have accumulated various payment acceptance options, ranging from debit and credit cards like Visa and Mastercard to popular mobile wallets to account-based payments with our banking partners,” says Adnan.


“Proliferation of cards is lackluster. So we recently introduced an alternative method of account based payments. That is something innovative. Once you shop from our partners like Telemart, Chikoo or bSecure, you can put in your bank account number to make a payment. You will get an OTP number on your phone and once you enter that, you’re through. Simple.” explains Adnan.

“We tell the merchants that your payments and backend operations are our problem,. You only focus on your business.”

So according to the PayFast playbook, if cash is to be disrupted, the alternative to cash needs to be comprehensive and as easy to use. In keeping up with this core narrative, PayFast is doing its best. To promote diversified payment options acceptance, it works with the top three international payment schemes – Visa, Mastercard and UnionPay –  covering the entirety of the population with a payment card for acceptance of payments on merchants it works with. It also enables t the domestic PayPak payment scheme which further broadens its payments offerings, and partners with several renowned banks for account based payments. PayFast is integrated with the most popular plugins, has a seamless online sign-up process that takes a matter of minutes to complete, and even has a dedicated 24-7 customer service team available for its clients.

“Our merchant acceptability has increased very quickly. Our integrations are easy and we have plugins for almost every shopping cart. The idea is to create the most holistic solution for merchants when it comes to payments so that we can live up to our becoming their partners in growth,” says Adnan.

PayFast is still a nascent entity having started commercial operations just about a year back. The company claims that it has been growing at an encouraging pace, having onboarded 100 merchants last month and aiming to multiply that number this month, it foresees itself as among the top fintech companies for large corporations, SMEs, and freelancers in Pakistan.

A growing space for all

Would the going get easy for PayFast? There are a number of notable companies attempting to receive SBP approval for an eCommerce payment gateway. Stripe-backed SafePay, ZingDigicom and MobiDirect are the companies which are aspiring to become licensed PSO/PSP entities. Some of these companies have been at an in-principle approval stage since 2017 and might have lost interest by now but enabling regulations, market opportunity and access to venture capital money means more companies would be jumping into the fray.

Egypt-based Paymob, for instance, is a very well funded fintech company which has recently launched in Pakistan. Backed by venture funding, it plans to onboard merchants for ease of payments acceptance.

While acknowledging that this does squeeze the market for everyone, Mr. Ali showed optimism that since its war on cash, everyone’s share will expand as cash turns digital. “Think of it this way: the total eCommerce industry is $4-5 billion out of which cash payments are 80-90%, while prepayment is 20%. All of us will have to work to convert the 80% cash pie into the digital economy. If that is expanded, the pie increases for everyone. Rather than all of us are fighting for the initial 10-20% that is already digital, all of us need to convert the cash first and that will benefit everyone– plus, we’re not one to shy away from competition,” says Adnan.

While its not sure what’s in store for PayFast,  their commitment to digitize Pakistan’s payment landscape and improve financial inclusion is admirable.


  1. There is an ambitious fintech startup in town and it is called PayFast! PayFast, a group company of Premier Systems Limited, is poised to become a homegrown fintech company paving its way not only in Pakistan, but across the globe. Its plans are calculated and precise, its efforts supplemented by an enabling ecosystem and its spirits heightened after the endorsement from the State Bank of Pakistan (SBP) to operate as a licensed entity.


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