Cashless payments can help Karachi generate billions of dollars: study

Pakistan's financial hub Karachi can generate around $1.5 billion (Rs181.5 billion) annually if the port city adopts digital payment service, according to a study commissioned by payments-technology company Visa.

According to the study “Cashless Cities: Realizing the Benefits of Digital Payments”, the increase in the use of digital payment modes that is through credit cards, mobile and internet banking could potentially yield a net benefit of $1.472 billion (Rs 181.5 billion) annually to consumers, businesses and the government.

The study, which comprised 100 cities in 80 countries from Chicago to Laos, estimates that increasing digital payments in all of them could result in total direct net benefits of $470 billion a year.

The consumers in Karachi can save nearly $0.1 billion or Rs12.1 billion in time savings by using digital banking, retail and transit transactions, with the added benefit of reducing cash-related frauds, said Majeed Hujair, senior director of Visa School of Public Policy for Central and Eastern Europe, Middle East and Africa, quoted Arab News.

“Businesses can recover about $1.1bn or Rs133.1bn in time saving while processing incoming and outgoing savings and increase their sales revenues,” he added. “The government can save up to $0.3 billion, or Rs36.3 billion, from increased tax revenues, economic growth and cost savings from administrative efficiencies,” informed Hujair.

Overall, the study revealed that by 2032, the digital payment would result in an increase of 3.3pc to the GDP, and would generate 198,100 additional jobs annually.