Visa (NYSE: V), a global leader in digital payments, has released a whitepaper emphasizing the immense potential for digitizing small and medium-sized enterprise (SME) transactions in Pakistan. The report reveals that an estimated $121 billion worth of SME B2B activities in the country are primed for digital transformation, yet a staggering 85% of Pakistan’s total B2B transactions remain cash-based.
According to Visa’s Country Manager for Pakistan & Afghanistan, Umar S. Khan, SMEs form the backbone of Pakistan’s economy, contributing 40% to the national GDP and playing a critical role in employment generation. However, their reliance on cash-based transactions continues to hinder business efficiency and scalability. He highlighted that Visa sees digital payments as a transformative tool for overcoming these challenges, with commercial cards offering streamlined financial processes and access to essential financial solutions.
Khan emphasized the importance of collaboration among key stakeholders, including government agencies, banks, and fintech firms, to enhance digital payment adoption. By building awareness and improving access to financial infrastructure, SMEs can transition away from traditional cash transactions, unlocking greater efficiency and growth opportunities.
The State Bank of Pakistan’s Payment Systems Quarterly Review for Q1 2025 underscores the growing trend of digital payments, with 55.6 million payment cards in circulation—88% of which are debit cards. However, despite this expansion, SMEs continue to face significant barriers in transitioning to digital transactions. Many businesses remain unaware of commercial card solutions, while cumbersome application processes and regulatory compliance requirements further complicate adoption. Additionally, banks and financial institutions often perceive SMEs as high-risk clients due to their limited credit history and lack of collateral.
The report provides further insights into Pakistan’s B2B payment landscape, noting that while only 15% of SME B2B payments are currently digital, there is a gradual shift towards adoption. While card transactions among consumers and small businesses have increased, much of this activity remains limited to cash withdrawals rather than digital purchases. Sectors such as agriculture, retail, and manufacturing dominate SME payables, while the IT industry handles significant B2B transactions, primarily for international trade.
Visa’s whitepaper underscores the vast potential of commercial card solutions in streamlining SME transactions. Of the estimated $255 billion in B2B payment flows in 2022, $121 billion originates from SMEs—demonstrating a substantial opportunity for financial institutions to facilitate digitization. Notably, the largest 8% of SMEs account for 60% of total SME payables, making commercial card solutions particularly relevant for high-volume transactions.
Beyond transactional efficiency, commercial cards offer SMEs numerous advantages, including interest-free working capital, enhanced cross-border trade facilitation, improved credit-building opportunities, and access to data-driven financial insights. These solutions provide real-time expense tracking, enhanced security, and greater control over business expenditures—critical factors in modernizing Pakistan’s payment ecosystem.
Visa’s report further advocates for the development of a comprehensive commercial card product suite designed to drive convenience, efficiency, and spending control for SMEs. By shifting B2B spending from consumer cards to commercial cards, issuers can tap into new revenue streams while leveraging customer transaction data for better market segmentation and product optimization.
As digital payments gain traction, the adoption of commercial card solutions could play a transformative role in Pakistan’s financial sector, driving SME growth and strengthening the overall digital economy.
