KARACHI: Businesses, individuals and government can save up to $1.5 billion from Karachi if consumers adapt digital payment systems, according to a study commissioned by VISA.
The study, “Cashless Cities: Realizing the Benefits of Digital Payments” which researched on payment patterns of 100 cities from 80 countries reveals that by 2032, cashless payments could increase Karachi’s employment by 4.7 per cent and accentuate GDP growth rate with 14.3 basis points.
During a press briefing held on Monday, Majeed Hujair, Senior Director, School of Public Policy for Central and Eastern Europe, Middle East and Africa (CEMEA) – Visa said that around 10pc of Karachi’s total population has adapted digital payment systems whereas the rest of 90pc population is still using traditional modes.
Describing the benefits of digital payments, he said businesses and governments have to pay the cost of cash management; benefits of going digital could save around $12 trillion for countries, if the 100 cities decide to go cashless.
Out of the total achievable benefit of $1.5bn from Karachi by going digital, $0.1bn would be beneficial for consumers, $1.1bn for businesses and $0.3bn for government.
He said no city in the world is currently 100pc cashless but Stockholm is well on its way to become the first city in the world to go cashless within a few years.
The results are also significant at a time when Pakistan has launched its first major digital policy aimed towards creating more job opportunities and accelerate economic growth, he added.
Earlier, President Karachi Chamber of Commerce and Industry, Muffasar Atta Malik said, “Visa’s Cashless Cities study encapsulates unique findings that will be of great interest to our industry experts, thought leaders and decision makers in the country.”
The use of cash is not only time consuming but also relatively risky and this study underpins that view by highlighting the significant and tangible benefits to people, businesses and government of Karachi, he said.
“As the government of Pakistan pushes forward with the ‘Digital Pakistan’ policy-led initiative, digital payments offer an immense, untapped opportunity to boost the country’s economic growth. With the rising rate of smart phone penetration in Pakistan and e-commerce forecasted to be worth $1bn by 2020, the use of digital payment methods is expected to increase significantly, paving the way for the transition to a cashless economy,” said Kamal Khan, the country manager for Visa in Pakistan.
(This news/article originally appeared in DAWN on August 7th, 2018)