- Working together for creating digital ecosystem to benefit all Pakistanis
Interview with Mr M. Mudassar Aqil — CEO, Telenor Microfinance Bank/Easypaisa
PAGE: Please tell me something about yourself and your organization?
Mudassar Aqil: I started my career in commercial banking in the United States and in my experience working in this sector for over two decades both abroad and in Pakistan, I have had the pleasure of working in diverse areas such as organizational restructuring, digital finance, FinTech partnerships and business growth. Before joining Telenor Microfinance Bank in 2019, I was the President & CEO of Finca Microfinance Bank. Since I joined this organization, we have been able to make significant headway in Pakistan’s transformation to a cashless and financially inclusive society. Telenor Microfinance Bank is designed to operate as a Fintech providing digital financial solutions to Pakistanis through two main businesses, i.e. payments and lending. Backed by Telenor Group and Ant Group, one of the leading telecommunications and Fintech companies in the world respectively, we aim to digitally enable and empower the unbanked population of Pakistan through collaboration and technology.
Our country’s financial system has been heavily reliant on cash for a long time. Easypaisa, Pakistan’s first branchless banking service was launched by Telenor Microfinance Bank in 2009 as a peer to peer money transfer service. It revolutionized the way people sent money over long distances at a time when money transfers without banks was a relatively unknown concept. Over the last decade, the platform has evolved into the country’s leading payments solution offering a diverse range of services. As of December 2020, the platform had more than 8 million active mWallet accounts and counting. Our annual throughput has surged past PKR 1.5 trillion and we are witnessing some incredible achievements across other domains as well.
PAGE: Could you tell us about the performance of Easypaisa in the given circumstances of pandemic and lockdowns?
Mudassar Aqil: The Covid-19 pandemic has been a challenging time for individuals and businesses not just in Pakistan but across the globe. Most of all, it has been difficult due to closure of physical economic activities as social distancing is the only effective measure to prevent the spread of this highly contagious disease. As a result of the restrictions imposed on individuals and businesses, digital transactions have taken center stage to ensure stability within the financial system and keeping the economy running. Platforms such as Easypaisa offer simple and convenient access to financial services to the masses through mobile wallets, and do not require users to submit extensive documentation or travel to a bank far away. In a situation where it was virtually impossible to head out and visit a bank branch to conduct financial transactions, mobile wallets offer an alternate solution without any hassle.
Furthermore, Easypaisa has been designed to be telco-agnostic, which means that users of all telecom networks can conveniently use the Easypaisa App on their smartphones. As a platform, Easypaisa witnessed tremendous growth during the pandemic. Our value of transactions saw an overall increase of 64% year-on-year, partially owing to the prevalent situation. At the same time volume of transactions grew by 23%. Easypaisa App users also rose by 54% from 2.23 million to 3.45 million at the end of the year.
To provide more convenience and accessibility to users, we increased our network of registered agents across the country by 14%, reaching 174,000 by the end of December 2020. We also focused towards introducing tailor-made services that would simplify everyday transactions for users. With Ramazan and Eid both falling during the first lockdown, our donations service and Eidipaisa initiative allowed customers to fulfill their religious and social obligations without risks to their health or well-being. Similarly, during lockdowns when businesses were shut and small businesses had a hard time conducting transactions, we introduced ‘Easybusiness’– a suite of services for Small and Medium Enterprises through a fully loaded web portal to carry out daily operations as well as open future growth prospects. The initiative empowers businesses to go digital by making salary payments, vendor payments and disbursements, and collecting receivables through an easy to use e-invoicing system.
PAGE: What is your expectation in terms of growth of your product during this year in the prevailing conditions of Covid-19?
Mudassar Aqil: Easypaisa has always been a pioneer in terms of introducing cutting-edge technology enabled financial products in Pakistan. Over the years, we have grown to become a comprehensive platform which offers more than just basic financial transactions and there are plans for the service to develop even further. We are steadfast towards our mission of transforming Pakistan into a cashless and financially inclusive society. Given Pakistan’s current state of financial inclusion, there are a lot of expectations pinned on Easypaisa, given the convenience with which more and more people can enter the realm of digital financial services. When it comes to mobile broadband and smartphone penetration, Pakistan is making rapid development and therefore there is a lot of room to grow in terms of financial inclusion through digital offerings. Presently, 95 million individuals in Pakistan use mobile broadband, an increase of 50 million in the last five years, and the majority of adults have access to internet, which serves as a backbone for the country’s development of a digital payments ecosystem.
Simultaneously, 96 percent of people have a government-issued biometrically verifiable ID, showing that a strong regulatory framework is in place, backed up by credit regulation authorities. These figures show that the Pakistani economy is ready to embrace digital financial solutions on a wider scale, as it takes less than a minute to open a mobile wallet account on a smartphone or feature phone especially with Easypaisa. We experienced significant growth during 2020 and are hopeful for the same trend to continue going forward as well. However, for significant growth and transformation towards a digital financial ecosystem in the country, different players would have to come together and collaborate as this is a task that cannot be achieved alone.
PAGE: In your opinion, how is Easypaisa transforming the digital financial landscape across Pakistan?
Mudassar Aqil: Easypaisa was introduced at a time when a significant chunk of Pakistan’s population did not have access to formal banking channels. Starting from a peer-to-peer money transfer service, Easypaisa initially enabled people to simply send amounts to each other through their phones. The service redefined money transfers. The strides made by Easypaisa paved the way for branchless banking to become the highlight of the National Financial Inclusion Strategy of 2015.Over the years, Easypaisa has enhanced its offerings to customers on every network through the mobile App, which brought a diverse range of services to users. Today, with 8 million-plus active users and an annual throughput of PKR 1.5 trillion, Easypaisa has become the most widely used digital payments platform in Pakistan and leads the fintech revolution in the country. Through a range of unique partnerships, Easypaisa has enabled customers not just during the pandemic but otherwise as well to perform various transactions including bill payments, money transfers, mobile top-ups, food delivery, ride-hailing fees and various others. These efforts are paving the way for more and more people to adopt digital payments, thus enabling greater financial inclusion among the masses.
PAGE: Your views on Pakistan’s Digital Economy?
Mudassar Aqil: The past year and a half has been quite difficult for global economies with many countries officially facing a recession. Pakistan has been fortunate enough to avoid some major economic setback. The positive side of this crisis is the increased adoption of digital means by Pakistanis. The pandemic and its impact has actually accelerated the shift towards digital services, such as e-commerce and digital banking. The first wave also brought about a spike in digital transactions across the country, with people preferring digital to conventional methods of transacting. This was because during the first wave, when lockdowns were initiated, life came to a standstill for those without access to digital financial services. This made most people realize the need for having mobile wallets. During the first wave of the pandemic, from March till April of 2020, we recorded an increase of 35% in new account registrations on Easypaisa while old users returning to the platform grew by 25%. At the same time, daily transactions saw a rise of 17% and bank transfers via e-wallets increased by a staggering 184%. These numbers point towards the shift Pakistan is making towards digital means. Although the trend seems to be continuing, what we need to understand is that it was not individual players that brought about this change, but it was a committed effort from different players, including technology and financial services providers, the government and regulators coming together.
With Pakistan being a country dominated heavily by cash, we need to do more for a sustainable shift towards digital payments, by taking steps to reduce higher costs associated with digital transactions and address other relevant barriers that keep customers from using these services on a regular, long-term basis. A few basic steps in this direction would be to incentivize use of digital payments, mandate providing alternate payment options at all major retail points across the country and make more use cases available on digital channels. Transforming Pakistan into a cashless and financially inclusive society is a herculean task that no player can achieve alone. We at Easypaisa remain committed to working in collaboration with other players and use technology to create a digital ecosystem that benefits all Pakistanis.
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