Electronic commerce has reached new heights this year with tech giants reaching a market capitalisation of $1 billion, marking a historical record. Also within the span of a year, Chinese giant Alibaba reached an all-time high trading price, critically larger than its initial public offering in 2014. Recognising the need for a strong information technology sector as the basis for boosting e-commerce and thereby supporting an economic boom, Finance Minister Asad Umar appears to be broaching appropriate channels by imploring the State Bank of Pakistan to review its digital payment policies.
The banking and e-commerce sectors, although having improved over the last few years, require an overhaul. Whereas developed nations have reduced dependence on human interaction, such as providing check deposit via photograph, our banks have faulty machines unable to accept checks, forcing person-to-person interaction where there is vast room for error. The progress our sectors have achieved in years some have accomplished in months. Foreign government rules and regulations are adapted as and when the need arises with rapid action, which needs to be the case in Pakistan. The central bank needs to respond quickly with updated measures. Expanding the electronic payment platform and accommodating foreign digital payment operators such as Paypal will provide benefits to the SBP itself by providing access to real-time records of trades and transactions across the country. To the FBR’s relief, accurate tax collection can be facilitated, discouraging dishonesty.
Plausibly, rather than blindly jumping into costly projects, our finance minister is taking a step back to direct the SBP to first review policies and regulations to see where the economy can be facilitated. Amid talks of an IMF bailout and a downward spiralling economy, we commend this directive in hopes that our economy can expand and move with the times, attract foreign business, and keep pace with the world.
Published in The Express Tribune, October 22nd, 2018.