When it comes to EMIs, many have tried. Few have succeeded. Here's why

Over the past two decades, Pakistan has emerged as a dynamic landscape of digital financial innovation, navigating a complex journey of regulatory evolution and technological disruption. The transformation began in 2008 with the introduction of branchless banking—a pivotal moment that laid the groundwork for a comprehensive digital financial services ecosystem.

The central bank's strategic interventions have been instrumental in this metamorphosis. The National Financial Inclusion Strategy (NFIS) initiated a systematic approach to expanding formal financial services, while subsequent regulatory frameworks dramatically reshaped the digital payments landscape. Key milestones include the 2019 introduction of Electronic Money Institutions (EMIs), the 2021 Payment Service Provider licenses, and the 2022 launch of the micro-payment gateway "Raast"—each representing a calculated step towards digital financial democratization.

The results have been striking: digital payments by value surged from a mere 6% in 2020 to 17% in 2024, signaling unprecedented growth. However, this journey is far from a straightforward success story. While pioneers like JazzCash and Easypaisa have thrived, the EMI segment reveals a more nuanced narrative of opportunity and challenge.

Only a handful of EMIs, such as Sadapay and Nayapay, have successfully navigated Pakistan's complex digital financial terrain. Multiple entrants have been forced to exit, underscoring the sector's volatility. Yet, the recent in-principle approvals for new players like Toko Lab and PayMob suggest an enduring belief in the market's potential.

So, is the EMI sector destined for failure, or a dormant goldmine awaiting strategic unlocking? Profit explores.