“The situation has challenged the existing financial practices and has brought in new opportunities as well”, said Yasum Mirza, Chief Business Officer at Access Group (DigitalPass), during an exclusive Q&A session with our Editor in Chief on the impact of COVID-19 in their business and on the financial sector in Pakistan.
1. How do you imagine financial sector post COVID-19?
In a way, COVID-19 has given a much-needed push to the consumers to opt for cashless and contactless payment methods in their day-to-day transactions. To me, post-COVID-19 looks promising on the acceptance front as it is reshaping the consumers’ behavior.
We as an organization have reassessed the market and introduced some new practices to sustain and to ensure the smooth running of operations for businesses and retailers. I have also noticed startups with innovative digital payment ideas emerging in the market as well, some of them seem future-promising and it’s always good to have a healthy competition.
In my view, the financial sector would be more resilient post-COVID-19, if we all, the financial institutions, payments schemes and most importantly the regulator; understand the real concerns and work together as an industry to mitigate them. SBP has taken good initiatives to work towards a digital economy, it is upon the consumers to adapt to them.
2. What are the challenges and opportunities for FinTech in the current crisis?
I believe the major challenge for FinTech in Pakistan has been its lack of acceptance by the consumer and retailers both. The population that uses banking channels is only about 20%, compared to an average of over 60% in South Asia, leaving an untapped market for FinTechs to grow if they have the right product for the right consumer. I think Telcos made a remarkable impact by providing the ease of money transfer targeting lower-income individuals but again there is so much more that can be done.
FinTechs will always have this opportunity even more at the time of crisis. There has been a surge of FinTech in Pakistan over the past few years with companies at the forefront of payments, and then there is Access Group with the network of DigitalPass works closely with financial institutions like banks, payment institutions and corporates to build operational technology, network acceptance and payment innovation. The majority of the retail outlets are still not equipped for accepting digital payments because the overall ecosystem in the country is predominantly cash-based. During this time of crisis, we play a critical role in the transition from cash-based to fully digital financial systems.
3. In your opinion, what is the best utilization of data in current scenario, in terms of its monetization?
Data has indeed changed how people do business. Surely data has been one of the key factors behind the success of FinTech as well. I think the purpose of collecting data is not to monetize but to better understand consumer behavior and serve the customers. Companies like Amazon, Alibaba are a prime example of how effective utilization of data can be, and at times like these only a few companies have not only sustained but saw huge gains in their sales.
The best utilization would be in terms of improving services, innovating products and for the operational betterment. The numbers help us identify potential customers and deliver value-added customized solutions.
4. Have you noticed a surge in digital payments? What future do you see of digital banking platforms in Pakistan?
There has been a significant rise in digital payments and a rather drastic switch in how people make payments and that is a positive sign. Digital banking has a lot to offer, with the number of individuals especially the youth, which comprise of over 64% of the population of Pakistan are using smartphones and have access to the internet; the future is digital banking.
The learning is curve moving upward with the behavioral change in how people are conducting business online and adopting digital tools for meetings, conferences and education. Amidst the lock-down, people are exploring the digital channels offered by Banks and Telcos and I doubt they will go back to using conventional channels.
5. How are you helping financial institutions face this current crisis?
DigitalPass (a part of Access Group) is a third-party service provider, bridging the gap between the retailers, banks, payment schemes and financial institutions that contribute to the financial inclusion in Pakistan. With our dynamic digital payment ecosystem, we craft forward-thinking digital payment strategy for all our stakeholders that opens unique opportunities for collaboration and innovation.
We are partners of the most prominent financial entities be it a bank or payment scheme, enabling digital transactions and contactless payments for their customers. Only recently we enabled the NFC capability for UnionPay cardholders, allowing the customers to make contactless payment transactions at retail outlets. We are also the digital payment partners of Mastercard for increasing the QR acceptance footprint at major brands across Pakistan. In addition to this, we are also working with other leading banks and telcos under a similar arrangement.
