PAKISTAN PAYMENTS

LANDSCAPE
MEETING WITH ARAB FINANCIAL SERVICES

MARCH 21, 2019

MEETING AGENDA

• Pakistan – Banks Overview

• Way Forward of Payments in Pakistan
• About – Payments360
• Discussion with AFS Business Division
• Discussion with AFS Acquiring Division
• Discussion with AFS Fintech Division &
Presentation on Payments Systems Providers
Pakistan – Banks Overview
Financial Institutions:

45 Banks (With 14, 970 Branches)

Categorization of Banks:

Local Private Banks: 22

Government Banks: 6
Foreign Commercial Banks: 5
Islamic Banks: 5
DFI & Investment Banks 7
Pakistan – Banks Overview

Product offering - Banks

ATMs 32
Debit Cards 32
Internet Banking 28
Mobile Banking 20
Call Center/IVR 21
Credit Cards 12
POS 09
Pakistan – Banks Overview

Prominent Alternate Delivery Channels - % Share

Volume Value (Rs.
Payment Channel (Million) Bilion) % Share
ATMs 470.6 5,549.40 62.07%
RTOBs 165.7 39,857.70 21.85%
POS 63.5 297 8.38%
Internet Banking 31.2 1,262.40 4.12%
Mobile Phone Banking 21.8 409.8 2.88%
e-Commerce 3.4 18.7 0.45%
PRISM System 1.7 361,048.20 0.22%
Call Centers/IVR Banking 0.3 8.7 0.04%
• Period: July 2017 - June 2018
• Source – Central Bank Report
 Pakistan – Current Market Size

14,019 Installed ATMs

Transactions count: 470.6 Million

Amount Disbursed: Rs.5.5 Trillion

53,511POS Terminals

Transaction count: 63.5 Million

Amount: Rs. 297 Billion

• Period Ending June 2018

• Source – Central Bank Report
 Pakistan – Current Market Size
40.9 Million Cards

Debit Cards -- 21.71M

Private Label Card -- 8.58 M
Social Welfare Card -- 8.91 M
Credit Cards -- 1.47 M
Cards Base % Share
Prepaid Cards -- 0.23 M

1%
4%
Debit Cards
22% Private Label Card
Social Welfare Card
Credit Cards
53% Prepaid Cards

21%

• Period Ending June 2018

• Source – Central Bank Report
 Top 5 Banks of Pakistan

H – Habib Bank • ATM - 53% Contribution

U – United Bank • Debit Cards - 52% Contribution
M – MCB Bank
A – Allied Bank • Branches - 51% Contribution
N – National Bank • POS - 55% Contribution
Market Size - Top Banks with ATM install base
NUMBER
NUMBER BANK OF ATM Top 10 Banks % share in ATM Install Base
1 Habib Bank Limited 2,044
2 United Bank Limited 1,450
14.8%
3 Allied Bank Limited 1,388
4 MCB Bank 1321
5 National Bank Limited 1,155
6 Bank AL Habib Limited 778 10.5%
10.0%
7 Bank Alfalah Limited 750 9.5%

8 Askari Bank 590 8.3%

9 Meezan Bank Limited 580

10 Bank of Punjab 479 5.6% 5.4%
11 Faysal Bank Limited 413
4.3% 4.2%
12 Habib Metro Bank 351 3.5%
13 Bank Islami 320
14 Soneri Bank 316 316
15 Summit Bank 281
Top 10 Banks – Cards Issuance
Debit Cards
NUMBER BANK (Million)
1 Habib Bank Limited 3.30 Debit Card - % Contribution Top 10 Banks
2 MCB Bank 2.91
15.0%
3 United Bank Limited 2.22
4 Tameer Microfinance 1.95 13.2%
5 National Bank Limited 1.80
6 Mobilink Microfinance 1.70
10.1%
7 Allied Bank Limited 1.43 8.9%
8 Bank Alfalah Limited 0.99 8.2%
7.7%
9 Askari Bank 0.85 6.5%
10 Bank AL Habib Limited 0.80
4.5%
11 Meezan Bank Limited 0.71 3.9% 3.6%
12 Faysal Bank Limited 0.55
13 Ufone 0.50
14 Habib Metro Bank 0.33
15 Bank of Punjab 0.22
 Top 10 Banks - Credit Cards Issuance

Credit Cards
NUMBER BANK (Thousands)
1 Bank Al Falah 406 Credit Cards % Market Share
2 Askari Bank 245
27.5%
3 Faysal Bank Limited 178
4 Standard Chartered 167
5 Habib Bank 145 16.6%
6 United Bank Limited 128
12.1% 11.3%
7 Silk Bank 95 9.8%
8.7%
8 MCB Bank 78 6.4%
5.3%
9 Allied Bank 21 1.4% 0.7%
10 Bank AL Habib Limited 11
 Top POS Acquirer

POS
NUMBER BANK Machines
1 Habib Bank Limited 21000
2 Bank Alfalah Limited 16000
3 MCB Bank 7000
4 Wemsol 7000
5 United Bank Limited 3800
6 Telenor 1900
7 Mobilink 1400
Prominent Payment Service / Solution Provider
1. TPS Pakistan
2. Euronet Pakistan
3. Avanza Solutions
4. Sungard Ambit (Credit Card & POS)
5. TSYS (POS driving)
Market Share - ATM Driving

67%

20%
13%

0% 0%
Euronet TPS Avanza TSYS Sungard
Payment Service / Solution Provider
Market Share – Debit Card
72%

21%
7%
0% 0%
Euronet TPS Avanza TSYS Sungard

Market Share - POS Driving

59%

28%

8% 5%
0%
Euronet TPS Avanza TSYS Sungard
Payments Landscape – Way
Forward
Initiatives by SBP - Financial Inclusion
 EFT Act was approved in 2007 by the parliament to supervise, standardize and
regulate Payment Systems and Electronic Fund Transfers in Pakistan
 Outsourcing Guidelines
 Branchless Banking Guidelines
 Rules for Payments System Providers & Operators
 Regulations for Electronic Money Institutions
 Mobile Agents Interoperability through TPSP
 White Label ATM Deployment Guidelines
 Circular on Cards Security and prevention on data theft
Click icon to add
picture
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Way Forward in Payments Landscape
• Huge Potential to serve unbanked especially automation of account opening
• Contact less and Bio metric base issuance and acceptance
• Offer cost effective, reliable, scale able and secure products for existing products like
ATM, Debit Cards, Credit Cards, POS acquiring, etc.
• Focus on increase in QR code base and ecommerce acquiring
• Digitization of Governments Payments and Receipts (G2P and P2G)
• Offer products focusing unserved segments like Blue Collar Employee, SME, nano
credits, student fee collection, etc.
• Trusted Partner to take the financial institution to the next level of serving its clients
and increase its portfolio and earnings
 About Us

Payments360 enables financial market players to make winning strategy,

consumer centric product offerings, technically and operationally viable
solution that ensures timely and lucrative Return on Investments.

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What Payments360 Offers
 Payments360 offers Payments Consulting and Fintegration Services for banks &
Fintechs, PSP & EMI
 Assist in Developing new product offerings
 Subject Matter Experts in the area of Issuing, Acquiring, Loyalty and Backoffice
Management
 Support in the testing, integration and implementation of ISO based and Open
API based interfaces with VISA, MasterCard, UPI, 1LINK and Billing Aggregators
Why Payments 360
 Payments360 has the capability to design, implement and operationalize the
Payment Systems
 Platform Understanding and Technical Expertise
 Implementation – Interfaces with International & Local Payment Schemes, Core
Banking systems, PSP/PSO
 Compliance/s – SBP - PCI-DSS – AML
 Experience to Successfully Demonstrate large scale Payments Systems
 Dispute Management, Escalation Procedures, Fraud Management
 Expertise to distinguish between the need and wish of the market
 Presentation
AFS Fintech Team

Presented by:
 Opportunity
SBP has authorized Fintechs to
participate in the Financial Inclusion as
Payment Bank

 80% of the banks will go out business or be

irrelevant by 2030 – Gartner

 SBP Vision 20/20 is to enable 50% of the

countries adult into the financial services

 Banks are not keen to serve low balance

account holders

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Existing Players Analysis
Jazz Cash – Mobilink Finja
Easy Paisa – Telenor

Account with Parent Bank Limited Acceptance on POS

They need to open account with their Partner Acceptance limited to International Branded
Bank Cards – Rs. 500 fee

Initially attracted through Limited Card Not Present

Loyalty Services

Loyalty and retention is mainly through offering Mainly through Agents

of discounts through merchants and partner
telecom products
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New EMI Players – Overview
Foree Oneload

MobiDirect Nayapay

Apparently no solution for

Mainly focused on P2P & Top-ups Acceptance
Claimed as EMI, but focused on transfers and It appears that acceptance over the POS is not their
Top ups offering in first phase
Not clear about QR Code Acceptance

Offering P2G payments with

limited scope No evident collaborations

Some players have plans to collaborate with At this stage, its not known if they are
certain Government Agencies to facilitate their collaborating with other partners and existing
payments players like Wemsol, NIFT, etc.
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Go To Market Strategy
complete eco system / suite of services
Once fiat money is converted to EMI, maximize the retention within the eco system

1 Digital Town / Tehsil

2 Maximize Touch
point / Acceptance 3 Issue EMI wallet / cards
to the masses

Identify the location with Onboard merchants of all Open Wallet for as minimum
most unbanked and under kinds such as grocery / milk as Rs.100
served community shop / bakery / café /
Individuals working on restaurants
Like Telco, offer one stop
weekly or monthly wages online boarding using
28 Biometric Validation within a
minute
USP – Unique Selling Point
Keep it Simple, easily expandable and quick deployment (ahead of competition)

Issuer Model Acceptance Model

EMI issued against cash using Wallet and Un- Acceptance at Merchant using QR Code & POS
personalized Debit Card
Acceptance via Mobile APP & ATM (via 1LINK)
Closed Loop – Domestic Card

Collaborators Any to Any Model

Partnerships with Bill Aggregators, 1LINK, Connectivity via ISO8583 & ISO 20022
NADRA and Government Agencies Connectivity via API – PSD/2

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iCash EMI Solutions – Components

Card Management Chip Card POS Acquiring & QR Mobile APP Call Centre
system Personalization Code Acceptance

Procured or • Outsourced to Procured or White label Outsourced

Outsourced IDEMIA or Outsourced Outsourcing with
FINJA • ZRG / TRG
1LINK • Keenu or
• incremental
• Instant MasterCard Developed by
issuance Folio3 or Vendor

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iCash EMI Solutions – Auxiliary Components

Settlement & Incident Dispute Resolution Marketing – Social Surveys

Reconciliation Management & Tickets Tracking Door to Door

Procured or • Software Software Hiring Segment Specific

Outsourced purchased Purchase from Advertising or • Income Group
from local Avanza or Local Marketing
market Market Companies on • Digital
Commission Awareness &
basis Acceptance
• Buying power

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victoria@fabrikam.com 404-555-0115 www.fabrikam.com