In a move to expand Pakistan’s digital financial infrastructure, the State Bank of Pakistan (SBP) has granted a commercial license to SafePay to operate as a Payment System Operator/Payment Service Provider (PSO/PSP). Simultaneously, the central bank has allowed YAP Pakistan to begin pilot operations for its innovative e-money wallet service. These developments mark a significant boost for Pakistan’s digital payments ecosystem and fintech sector.
SafePay now becomes one of only six PSO/PSP operators in Pakistan with commercial licenses to operate e-commerce payment gateways. This approval follows its initial licensing in 2022 and positions SafePay among a select group of fintechs that have met SBP’s rigorous compliance standards. The first PSO/PSP license was awarded a decade ago in 2015 to 1LINK Guarantee Limited, followed by Virtual Remittances Gateway, Webdnaworks Pvt. Ltd., NIFT Pvt. Ltd., and Avanza Premier Payment Services. Notably, SafePay is the first to receive a commercial license in five years, making its entry particularly notable in the ongoing evolution of Pakistan’s regulated payment infrastructure.
SafePay is also recognized as the first Pakistani fintech to graduate from Y Combinator, the world-renowned US-based startup accelerator. The company further strengthened its credibility through a strategic partnership with Visa’s Cybersource, enabling it to offer secure, scalable, and compliant payment solutions for the local e-commerce landscape.
According to SBP’s latest updates, one PSO/PSP is currently in a pilot phase, while three others have received in-principle approval. At the same time, licenses of three operators were revoked due to regulatory non-compliance, underscoring the regulator’s strict oversight in this space.
Meanwhile, YAP Pakistan, a division of Dubai-based fintech YAP Global, has received regulatory clearance to initiate pilot operations as an Electronic Money Institution (EMI). The company is set to introduce its digital wallet app that aims to provide a new wave of innovative financial solutions to Pakistani consumers and SMEs. The app will function as part of YAP’s larger fintech suite, which includes the YAP Store, YAP Financial Marketplace, and YAP Hub, offering an all-in-one digital banking experience.
YAP Pakistan received its in-principle approval from SBP in November 2022. The fintech has since formed a notable partnership with Bank Alfalah to deliver digital wallet services tailored to the needs of small and medium enterprises. Through this collaboration, YAP aims to bring greater financial inclusion to underserved segments of the market, leveraging technology to deliver user-friendly and accessible financial tools.
Alongside YAP Pakistan, Hubpay was also granted permission to commence pilot operations in October 2024. Hubpay intends to offer similar e-money wallet services targeted at both consumers and merchants, highlighting a growing trend of diversified fintech activity in Pakistan’s payments space.
The SBP’s dual announcement not only reflects its ongoing commitment to fostering innovation and competition in the financial services sector but also showcases its evolving regulatory approach that balances innovation with compliance. As Pakistan’s digital economy gains momentum, these new entrants are poised to play a crucial role in enhancing the accessibility, efficiency, and trustworthiness of financial transactions in the country.
