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An overview of online payment methods in Pakistan

  • It is the digitization era, and e-commerce is at its peak. From the standpoint of Pakistan, e-commerce has great potential. Trustworthy online payment methods are essential for expanding the trend of E-commerce and online companies in Pakistan. It helps customers have confidence in doing transactions using various payment methods. With that, sellers or merchants obtain a major chunk of customers to market and set up their e-business.

    Online Payment Methods Significance and Types

    If we look at today’s operations, every traditional business person has shifted business to digital. The internet has grown unexceptionally, and these reliable transaction purposes of online payment platforms play a crucial role.

    Now let’s discuss from basic what the online payment method means. An online payment is simply the exchange of money or the payment for goods or services via the internet. In essence, it is simply a method of processing transactions electronically, with a direct database connection between the parties selling and purchasing the product. There can be many methods, such as credit card payments, ACH payments, wire transfers, and payments made with a mobile wallet.

    How do online payments work?

    Let’s discuss the complete procedure of how online payment method work. It begins with checking or authorization, where the consumer first inputs their payment information into an online checkout form to pay for anything. The payment gateway securely transmits the data to the payment processing business, which subsequently transmits it to the card scheme. The card scheme verifies with the customer's bank to ensure that they have enough money to complete the transaction and that their card is not banned.

    At the sales stage, the money is collected from the customer's bank account and kept by the merchant's payment processing business. The payment gateway notifies both the buyer and the seller. 

    The funds are usually deposited into the merchant's bank account within a few business days. 

    Available Payment Methods in Pakistan


    1. Credit Card Payment

    Credit cards were widely utilized for online payment methods in Pakistan by both companies and consumers. The credit card company settles the purchase debt with the vendor, and the cardholder pays off their whole credit card balance at the end of the period. Although many consumers prefer to pay via this medium, businesses that take credit cards both online and in person have an edge over those that do not. According to Ecofiney, numerous private banks in Pakistan charge a per-transaction fee that can vary between 3% and 4.5% of the total transaction cost.


    2. Wire transfers

    Wire transfers are an electronic method of transferring payments through a network that is operated by hundreds of banks worldwide. These are typically sent from one bank to another using a SWIFT code. They also have higher transaction fees, which typically range between $20 and $30 per transaction. People from all over the world can safely transfer money to locations and financial institutions.


    3. ACH payments

    ACH transfers are a sort of online payment conducted through the ACH network, which is an electronic network that acts as an intermediary between financial institutions. It is another type of payment method in Pakistan administered by NIFT Clearing Operations in Pakistan. ACH transactions are carried out in batches. This reduces fees but makes ACH payments take longer to complete than other types of online payment methods.

    ACH payments usually take one to three business days to process, although wire transfers and credit card transactions are done within 24 hours. Businesses regularly utilize ACH direct deposit to pay employees, and many bank institutions provide this service for free.


    4. Digital App-Based Payment Methods


    It is the first digital payment method in Pakistan and has grown to become the world's third-largest mobile payment method, with 7.4 million users in 2013 according to CGAP. It is a money transfer service that has made life easier for folks who do not have access to bank accounts for payment transfers. EasyPaisa payments can now be transferred to other accounts without any hassle. Any mobile subscriber can open an EasyPaisa account and use the services such as money transfers and receipts, bill payments, and online shopping. Customers can also get virtual debit cards from them.


    It is the greatest international option for receiving payments from anywhere in the globe to Pakistan. It operates internationally in over 200 countries and provides an alternate option to pay individuals directly without ever using a third-party payment provider. Payoneer users receive a Mastercard ATM debit card that allows them to withdraw cash from any ATM. Payoneer now provides a guaranteed low transaction charge and cash withdrawal flexibility.


    It is another growing payment gateway launched in 2018 and now has many big partners and a good number of consumers using it for their payment purposes. It has numerous big partners, including multiple banks, using it to issue invoices and collect payments and fees via mobile banking, online banking, and over-the-counter locations. PayFast provides modern solutions for resolving many challenges that Pakistan consumers have with online payments, and as a result, it is to become one of the top payment methods in Pakistan. Check out their website for more information on the best payment options they have to offer based on your needs. 


    5. Digital Wallets

    The term "digital wallet" refers to any method of electronic payment stored on a user's device or in the cloud. Digital wallets are not exactly the payment methods but they are some sort of source that enable customers to use existing payment methods in the absence of a physical card.


    It is one of Pakistan's wallet-based payment systems, allowing users to send/receive money, make online bill payments, and load mobile phones. It can also be linked to Payoneer transfers and used for digital payment services such as bus tickets, tax payments, and so on.


    It's another app that allows users to easily make financial transactions, pay utility bills, send/receive payments, mobile easy loads, bank transfers, and insurance payments, among other things. Upaisa also provides a debit card that can be used to withdraw cash from local ATMs.


    It is a debit card-based payment system introduced by the National Bank of Pakistan (NBP) and is Pakistan's first and largest QR-based discount app. GolootLo functions similarly to an online wallet in that it must be recharged to be used. However, this debit card can only be used to make payments to registered retail stores that offer a discount.


    Suggestion for Selecting the Best Payment Method in Pakistan

    If you are a business owner, freelancer, etc., and want to choose an online payment gateway solution to conduct transactions, consider their needs and preferences. Younger clients are more likely to utilize digital wallets and be familiar with a variety of payment processing partners, whereas older customers may choose to use credit and debit cards. But one thing that both sorts of customers, elderly and young, have in common is that they both want to utilize a method that is simple to use and maintain.

    So, before adopting your payment method, you can first take your consumers’ feedback, and then, as per their demand, you can select the best-suited payment method. Or you can adopt more than one payment method in Pakistan to work more effectively as per your clients’ feasibility.