Published in Sep-Oct 2021
In September, NayaPay became Pakistan’s first electronic money institution (EMI), subsequent to having completed a year-long pilot phase and inspection by the State Bank of Pakistan (SBP)
“We are of the firm conviction that Pakistan needs a robust, local payment platform for individuals and businesses which can provide similar conveniences to those provided by online payment platforms abroad, such as Alipay, PayPal, Square and WeChat Pay,” says Danish A. Lakhani, Founder and CEO, NayaPay.
Citizens over 18 can activate a basic NayaPay wallet on their smartphones by downloading the app and entering their CNIC (and bank account details if they choose to link NayaPay with their bank account). The SBP has set a monthly limit on all transactions; basic accounts of Rs 50,000 and upgraded accounts of Rs 200,000 (upgraded accounts require biometric verification) and daily cash withdrawals are limited to Rs 10,000.
Signing up takes three to five minutes after the information is verified (which can take up to two days); a Visa debit card is then issued, which can be used wherever Visa cards are accepted; NayaPay estimates that there 46 million merchants across the world, including online platforms such as Amazon and AliExpress – and NayaPay are the first mobile wallet to offer this service. NayaPay can also be used to pay utility bills, school fees, split bills at restaurants, donate to charity, schedule monthly payments, and send gift envelopes.
The response has been promising and according to Raaj Faheem, Head of Strategy, NayaPay, “pilot-users have linked their bank accounts with NayaPay and are using it to make routine payments, such as streaming services, without having to worry about exposing their primary bank account. The second most popular way that NayaPay is used is to transfer funds to ‘unbanked’ family members.”
Regarding the app design, Lakhani points out that “we have built a fully functional messaging application, which enables users to conduct all their transactions while chatting to people they are sending the money to.” The decision to include a chat feature was arrived at after conducting in-depth research. “We found that when people make online payments, they tend to use a banking app and a messaging app to confirm the payment has been made. To reduce the hassle of switching between apps, we introduced both features within NayaPay,” explains Faheem
Loading money into NayaPay wallets can be done in two ways. Individuals who have a bank account can link it to their NayaPay wallet and top it up via the bank’s app or online portal. Those who do not have bank accounts can go to any branch of Askari or Meezan banks and top-up their account by paying in cash. (The company is currently working on partnering with more banks.)
Another service provided by NayaPay is Arc, which caters to small business owners. With this service, these businesses can accept payments of up to Rs 500,000 a month via credit cards, interbank networks (such as 1Link), mobile wallets such as Easypaisa, JazzCash and designated banks in Pakistan including HBL, Faysal Bank, JS Bank and Meezan Bank.
According to Lakhani “Arc aims to facilitate 70% of the SMEs that do not have a formal business structure yet. In terms of financial services, this sector is highly underserved and we hope to remedy this. Most SMEs are not registered and therefore unable to open a business bank account; with Arc, they can do so.”
Arc users will be able to access several business tools, including those that allow them to create invoices and manage their cash flow and finances. “Every second spent on tracking sales and expenses is lost revenue; our goal is to enable them to focus on growth while we do the rest,” says Lakhani. “By helping small businesses harness the power of technology, we believe we can transform Pakistan’s economy.” So far, approximately five percent of NayaPay users have subscribed to Arc; the remaining 95% are regular customers.
Speaking about the competition from mobile wallets, Lakhani says, “what motivated us was the fact that while successful platforms such as Easypaisa and JazzCash exist in the same space, not everyone uses them, and they are mainly used to make intercity money transfers. At NayaPay, our approach is different – we believe in partnering with banks rather than working in competition with them. Instead of focusing on disruption, we are building a financial ecosystem with a network of partnering banks to provide our common customers with both value and convenience.”
Marketing is mainly limited to digital platforms at this point. However, once NayaPay completes its soft launch phase, they intend to use mainstream media, such as TV and print in order to build further credibility for their financial services. The app will also be marketed through partnerships with banks and merchants, be they utility companies, fashion brands, internet providers or cable companies.
In the future, NayaPay plan to empower young adults by helping them begin their ‘financial lives’. “Many students do freelance work for companies outside Pakistan. We are working with foreign remittance and exchange companies so they can receive their salaries on time and at a good exchange rate,” says Lakhani. In addition, NayaPay plan to introduce services that will allow Pakistan-based businesses to receive foreign remittances easily, as well as individuals whose family members send them money from overseas on a regular basis. To achieve this, NayaPay plan to give their users internationally routable bank accounts (IBANs) to receive foreign earnings directly by using a NayPay SWIFT code. They also plan to collaborate with foreign remittance companies such as Payoneer to achieve this.
(Clarification: Individuals can sign up with Naya Pay within three to five minutes after their information has been verified, while the process can take up to two days for businesses.)