A recent study by Visa, a global leader in digital payments, reveals a significant shift among Small and Medium Enterprises (SMEs) in Pakistan toward embracing digital payment methods as a vital strategy for business growth. According to Visa’s ‘Value of Acceptance’ study, 78 percent of surveyed businesses now view digital payments not just as an option, but as an essential investment to drive expansion and improve operational efficiency.
The study, which focused on SMEs across Pakistan’s major cities including Lahore, Karachi, and Islamabad, explored the impact of digital payment acceptance, the barriers merchants face compared to cash, and the openness among cash-only businesses to adopt electronic payment methods. Visa partnered with 4SiGHT Research & Analytics to conduct in-depth interviews with 250 small retailers, of whom 60 percent currently accept digital payments alongside cash, while 40 percent remain cash-only.
Leila Serhan, Senior Vice President and Group Country Manager for the North Africa, Levant, and Pakistan (NALP) region at Visa, emphasized the growing importance of digital payments. She noted that acceptance of electronic payments is evolving from a ‘nice-to-have’ feature to a ‘must-have’ for business success. Over 70 percent of businesses accepting card payments reported positive effects on revenue and customer footfall, highlighting the tangible benefits digital transactions bring to local merchants.
The study found that 85 percent of respondents have experienced challenges with cash payments, such as theft, embezzlement, and general inefficiencies. In contrast, merchants who accept digital payments reported increased convenience for customers (43 percent), higher sales (32 percent), and greater operational efficiency (26 percent). Notably, 75 percent of these businesses saw an increase in revenue, and 87 percent observed higher customer visits since adopting digital payment options.
Despite the clear advantages, several barriers remain that hinder wider adoption. Around 39 percent of merchants pointed to a lack of transparency regarding transaction fees, as well as limited awareness of the value proposition of digital payments in terms of security and convenience. The onboarding process for Point of Sale (POS) systems was another pain point; 40 percent of merchants described the experience as neutral or difficult, though 37 percent still plan to obtain POS devices. Visa suggests that improved education and government support, especially financial literacy programs, could help overcome these hurdles and accelerate digital payment adoption.
Security concerns also play a significant role in shaping merchants’ attitudes. The study revealed that over 45 percent of merchants face risks such as robbery and cash mishandling. Meanwhile, 58 percent expressed a desire for better guidance on secure payments, particularly for business-to-business transactions. Interestingly, only about 20 percent of merchants raised concerns about fraud related to card payments, compared to 46 percent worried about handling cash. This indicates that digital payments are perceived as safer by many businesses, which could further encourage their use.
Visa is actively supporting Pakistan’s efforts to build a robust digital payments infrastructure that offers seamless and secure experiences for consumers and merchants. The country’s rapid digital adoption is reflected in the State Bank of Pakistan’s quarterly payment systems review for March 2025, which reported a 12 percent increase in transaction volume and a 28 percent rise in transaction value across mobile banking apps, branchless banking wallets, and e-money wallets. Together, these platforms processed 1.45 billion transactions amounting to PKR 24 trillion, underscoring the expanding role of digital payments in Pakistan’s economy.
Overall, Visa’s ‘Value of Acceptance’ study highlights a pivotal moment in Pakistan’s fintech landscape, where SMEs increasingly recognize digital payments as a key growth enabler. With continued investment in payment technology, education, and regulatory support, Pakistan’s business sector is poised to benefit from a more inclusive, efficient, and secure financial ecosystem.
