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Buy Now Pay Later ‘A New Fintech Boom’

Mainly in the developed world, BNPL services gained special attention during the COVID-19 health crisis. In the regions like Africa, however, the service providers still face issues such as limited credit infrastructure and weak purchasing power.

Generally, from the consumers’ side, BNPL adoption is mainly driven by the younger generation, and the main reason to use the services includes zero interest rates and transparent payment plans and conditions.

Moreover, a sampling of UK consumers showed that out of the traditional BNPL offerings, the majority of respondents prefer installment payments, rather than paying the full amount later, according to some reports.

BNPL service providers proliferate, challenging established global brands

As a result of increased demand for BNPL services during the pandemic, major service providers such as Klarna, Afterpay, and Affirm thrived in 2020, and continue doing so this year. These players significantly expanded their customer base amid COVID-19, and their revenues soared. Nevertheless, the net profits did not enjoy such growth, as most of them opted for new projects including the launch of new services and further market expansion.

Global Buy Now Pay Later Market Report 2021

The BNPL trend has also taken off in Australia where players including Afterpay, Zip Pay, and Splitit have taken share from traditional credit card companies owing to fast approvals.
In Europe, BNPL is more popular in the UK as compared to other nations including Italy or Germany. Shoppers in the UK observe retail finance as a convenient way to split the cost of expensive purchases. However, in Germany, open invoice or pay after delivery is a popular payment method. In Germany, RatePay provides checkout lending solutions and open installments for e-commerce. Other key players in the Western European market include Divido, Mash, CreditClick, and AfterPay.

In Canada, consumers are moving away from credit card fees in favor of debit or cash, owing to which retailers are offering BNPL service. For instance, PayBright’s BNPL service is being offered to Canadians via 6,000 other Canadian and international retailers. BNPL service is being used for purchase of furniture, electronics, fashion and apparel, sports equipment, and others.

Further in August 2020, AfterPay extended its BNPL service in Canada. AfterPay enables shoppers to buy products and pay for it in four instalments over a short period of time. The service is offered to Canadian consumers for free assisting customers to spend without incurring interest, fees or revolving and extended debt.

Trend Analysis: The Buy Now Pay Later Revolution

What’s the Benefit of Buy Now Pay Later Services to DTC (Direct-to-consumer) Brands?

For such a high fee, you’d expect some serious benefits. There are several excellent reasons why so many brands are already offering this payment solution.  For one, stores tend to generate a lot more revenue. Shopping carts get bigger and are abandoned less often when the payment model is offered, according to the team at PayBright. When consumers can spread the payment of large purchases out over several weeks, they are less likely to suffer from sticker shock and more likely to make big purchases they otherwise wouldn’t have been able to afford. Some companies have reported more than 30% increases in average order value as a result of Buy Now Pay Later solutions. 

Buy Now Pay Later programs can even attract new customers. Increased referral traffic is another benefit of the payment model, says President and Founder of The GM Agency Amelia Castellanos. Because firms like Afterpay advertise partner brands in their directory and stores can attract shoppers who might not have otherwise have shopped their brand. 

All that Glitters Isn’t Gold

While Buy Now Pay Later offers plenty of benefits to stores and consumers alike, there is a darker and somewhat murky side to the industry. First, there’s the issue of affordability. Just like with credit cards, the pay later offers are only affordable if consumers make payments on time, says Fortune’s Rachel King. “If they don’t make payments on time, again, just like with credit cards, those penalties rack up fast, and consumers face the potential of falling into a great amount of debt in a short amount of time.

There’s also a regulatory problem. Many BNPL firms can sidestep financial regulations.

There aren’t regulations on how they can market themselves and they don’t have to include key information in ads or at checkout. “This means that some consumers, particularly those who might be younger or more vulnerable, are getting themselves into financial difficulty.”

What’s the Future of Buy Now Pay Later?

The future of Buy Now Pay Later looks very bright. According to one report, the industry will grow at 9.8% annually over the next five years, eventually exceeding $1 billion. There’s certainly plenty of room to grow.

Buy Now Pay Later firms are experimenting with consumer-focused platforms and tools, writes Gulnaz Khusainova, CEO and Founder of Easysize. Klarna has launched an app that allows consumers to make purchases on any product with a virtual Klarna card. Afterpay is launching an in-store product and delivering personalized recommendations based on a consumer’s activity. 

BNPL and the Pakistani market

Slow to the digital field in general; Pakistan’s ecommerce marketplace has hit a major growth spurt in 2020 and 2021, with revenue growing by over 35 percent in the first quarter of the fiscal year 2021 alone. It is also a younger demographic: 40 percent of the population is under the age of 30. Also, the increased access to digitization – even rural areas have 3G at this point – has served to give commerce a massive shove forward.

In absolute terms, the IT exports reached $2.12bn in 2020-21 as against $1.44bn in the preceding year, according to data released by Commerce Ministry on Monday.

“I want to congratulate our IT exporters for crossing the $2bn export mark for the first time in our history,” Commerce Adviser Razak Dawood said in a statement on Monday.

Mr Dawood said he always believed in the abilities of IT professionals and entrepreneurs. “You have done a remarkable job and I encourage you to market your exports even further to achieve more”, the adviser further said.

However, what Pakistan is lacking, QisstPay (Pioneer BNPL program launched in Pakistan) Co-founder Jordan Olivas told Karen Webster in a recent conversation, is an easy way to access credit. Credit card penetration is low, and cash remains king when it comes to making payments. The market clearly needs another option, which is what QisstPay aims to offer as it introduces buy now, pay later (BNPL) as a tool to the Pakistani market.

“The problem in Pakistan today is that there aren’t a lot of ways to get formal credit,” noted Olivas. “So this is something very specific. We are not offering lines of credit. We’re not issuing loans. What we are doing is factoring invoices, in a sense. We’re essentially buying the invoice from the merchant and extending a partial net 30 to the consumer.”

As a result, the consumer gets a chance to split up their payments – paying 50 percent at the time of purchase and the other half 30 days later. That payment cycle was chosen to match up with typical Pakistani pay cycles, which are usually 30 days.

The solution is designed to offer what firms like Afterpay and Klarna provide to consumers all over the world: an easy on-ramp for controlled digital spending. To get started, consumers need only provide their phone number, address and debit or credit card numbers (to make the first payment). QisstPay does not collect a photo ID or a customer’s CNIC (the local equivalent of a Social Security number), which greatly streamlines the onboarding process.

The Challenge of Offering Something New

While there is much to be said for being the first player out on a greenfield – as QisstPay is in Pakistan – there is the massive challenge of getting both consumers and merchants on board and willing to use something new. While services like Afterpay might see their most avid users tapping into the service five or six times a month, a QisstPay super user might use the platform once or twice.

But Olivas believes they will see that change over time, particularly as they are able to recruit more merchants onto the platform, and as the new payment form becomes more familiar to customers. This has been the pattern as BNPL platforms have emerged elsewhere in the world, he noted, and one that seems on track to repeat as the payment method emerges in Pakistan.

And Pakistan is the only market QisstPay is taking on – the goal isn’t to plant a flag here and then see how many more places they can take on. Pakistan is an unusual and complicated market, said Olivas, and trying to focus elsewhere is a good way to fail widely. As the fifth-largest country on Earth (following China, India, the U.S. and Indonesia), Pakistan is a plenty big enough challenge all on its own, said Olivas.

But it’s a challenge that he believes promises big rewards for the player that can properly debut BNPL.

Large Tax Exemptions Awarded On Electric Vehicles And Bikes


National Electric Vehicle Policy

Economic Coordination Committee (ECC) has approved a five-year Electric Vehicles (EV) 2-3 wheelers Policy with substantial incentives.

The inter-ministerial c0mmittee finalized EV P0licy rec0mmendati0ns in the sec0nd meeting with a c0nsensus 0n electric 2-3 wheelers (m0t0rcycle, rickshaws, l0aders) and heavy c0mmercial vehicles (buses & trucks).

The p0licy rec0mmendati0ns were agreed 0n after an analysis 0f p0licies prepared by the Ministry 0f Climate Change (M0CC) and Ministry 0f Industries and Pr0ducti0n (M0I&P).

The rec0mmendati0ns are based 0n:

  1. Pr0m0ting the use and manufacturing 0f electric 2-3 wheelers and heavy c0mmercial vehicles;
  2. Techn0l0gy acquisiti0n;
  3. Enc0uraging EV manufacturing;
  4. Mitigating negative aspects 0f climate change thr0ugh vehicle emissi0n reducti0n;
  5. Empl0yment generati0n thr0ugh new investments;
  6. A reducti0n in 0il imp0rt bill; and
  7. Usage 0f excessive electricity, etc.

The incentives being 0ffered 0n 2-3 wheelers will be General Sales Tax (GST) at the sales stage f0r 2-3 wheelers @1% f0r five years, i.e., the p0licy peri0d. Sales Tax at the imp0rt stage will be waived 0ff (0%) t0 av0id refunds.

EV-specific parts 0f 2-3 wheelers will be imp0rted at 1% Cust0ms Duty (CD) f0r five years. 2-3 wheelers will be exempted fr0m registrati0n tax and annual t0ken tax. Reducti0n 0f t0ll tax t0 50% f0r EVs. Existing manufacturing regime f0r 2-3 wheelers with respect t0 n0n-EV parts & c0mp0nents will remain intact t0 safeguard already achieved l0calizati0n. The benefits 0f the EV p0licy will be extended t0 b0th existing and new manufacturers.

The imp0rt 0f new EVs (2-3 wheelers) in CBU c0nditi0n at the c0ncessi0nary rate 0f cust0ms duty (50% 0f prevailing rate) will be reduced t0 10 per variant and capping at 200 units instead 0f 100 and 2000.

Heavy C0mmercial Vehicles (HCVs) – Electric will have 1 percent Cust0ms Duty 0n imp0rt 0f CBUs (Electric Buses, Trucks & Prime M0vers). Imp0rt 0f entire CKD will be all0wed at 1 % Cust0ms duty t0 l0cal manufacturers and General Sales Tax @1% at sales and waived 0ff (0%) at the imp0rt stage.

Pakistan Set 2.3% Economic Growth Target for year 2020-21



Pakistan will target growth of 2.3% in fiscal year 2020-21, according to government officials and documents seen by Reuters that said the economic landscape would depend mainly on the country’s ability to control the coronavirus pandemic.

Prime Minister Imran Khan’s g0vernment is set t0 present its 2020-21 budget 0n Friday, in a parliamentary sessi0n that 0nly 25% 0f lawmakers will attend due t0 pandemic restricti0ns.

“The GDP gr0wth f0r 2020-21 is targeted at 2.3 percent with c0ntributi0ns fr0m agriculture (2.9 percent), industry (0.1 percent) and services (2.8 percent),” a planning c0mmissi0n w0rking paper seen by Reuters said.

That f0recast is much r0sier than the 0.2% c0ntracti0n in 2020-21 pr0jected by the W0rld Bank earlier in June. The multilateral lender sees gr0wth 0f -2.6% this fiscal year, ending June 30, while the g0vernment expects a 0.4% c0ntracti0n.

A recent surge in C0VID-19 cases has made ec0n0mists sceptical ab0ut a quick rec0very in the S0uth Asian nati0n. Khan said 0n M0nday that the 0utbreak was n0t expected t0 hit its peak until July 0r August.

The planning c0mmissi0n paper pr0jects an average inflati0n rate 0f 6.5% in 2020-21, a trade deficit 0f 7.1% 0f GDP and a current acc0unt deficit 0f 1.6% 0f GDP. Exp0rts and imp0rts are pr0jected t0 gr0w at 1.5% and 1.1%, respectively.

Inflati0n hit a decade-high 0f 14.56% in January.

A budget strategy paper in March, just bef0re the pandemic hit, had pr0jected gr0wth 0f 3% in 2020-21.

The paper, seen by Reuters, f0resaw spending 0f 7.6 trilli0n Pakistani rupees ($46.76 billi0n) and a fiscal deficit 0f 6.9% 0f GDP — much l0wer than a current finance ministry pr0jecti0n 0f 0ver 9% f0r 2019-20.

0f that, 3.235 trilli0n Pakistani rupees ($19.90 billi0n) was earmarked f0r debt servicing and 1.402 trilli0n Pakistani rupees ($8.63 billi0n) f0r defence — a rise 0f 0ver 12% fr0m last year.

Pakistan Get Debt Relief From The Creditor Nations of Paris Club

debt reliefThe Paris Club of creditor nations have agreed to suspend debt service payments from Pakistan, Chad, Ethiopia and the Republic of Congo as part of a G20 debt relief deal, the group said.

The Gr0up 0f 20 leading ec0n0mies and the Paris Club, an inf0rmal gr0up 0f state credit0rs c00rdinated by the French finance ministry, agreed in April t0 freeze debt payments 0f the 77 p00rest c0untries this year t0 free up cash t0 fight the c0r0navirus pandemic.

The latest agreements bring t0 12 the number 0f c0untries t0 receive debt relief under the deal with a t0tal 0f $1.1 billi0n in debt deferred as a result, the Paris Club said, adding 30 c0untries had requested t0 benefit.

Earlier in May, Pakistan f0rmally requested members 0f G-20 nati0ns f0r debt relief with a c0mmitment 0f n0t c0ntracting new n0n-c0ncessi0nal l0ans, except th0se all0wed under the Internati0nal M0netary Fund (IMF) and W0rld Bank guidelines.

The f0rmal requests were sent t0 individual c0untries under the G-20 C0vid-19 Debt Service Suspensi0n Initiative.

Pakistan had als0 intimated t0 the IMF, the W0rld Bank and the Paris Club ab0ut its decisi0n t0 f0rmally seek debt relief. Last m0nth, the IMF’s Resident Representative t0 Pakistan Teresa Daban had said that Pakistan did n0t 0fficially make any request t0 G-20 c0untries f0r debt relief.

Pakistan 0wes $20.7 billi0n t0 11 members 0f the Gr0up 0f 20 rich nati0ns. 0ut 0f this sum, an am0unt 0f $1.8 billi0n w0uld mature by December 2020, including the interest payments, acc0rding t0 the ec0n0mic affairs ministry.

0n April 15, the G-20 nati0ns ann0unced a freeze 0n debt repayments fr0m 76 c0untries, including Pakistan, during May t0 December 2020 peri0d, subject t0 the c0nditi0n that each c0untry w0uld make a f0rmal request.

0n April 16, an IMF rep0rt had estimated Pakistan’s p0st-C0vid-19 external financing requirements at $25.8 billi0n with a financing gap 0f $2 billi0n. F0r the next fiscal year, the IMF pr0jected Pakistan’s gr0ss financing requirements at $29.3 billi0n and a financing gap 0f $1.5 billi0n.

The IMF had appr0ved $1.4 billi0n emergency l0ans, which largely bridged the pr0jected financing gap but the am0unt fell sh0rt 0f the full needs. Pakistan’s exp0rts and f0reign remittances were pr0jected t0 be affected by the “Great L0ckd0wn”, which had put additi0nal burden 0n the 0fficial f0reign exchange reserves.

IMF Want Pakistan to Freeze Salaries of Government Employees


Pakistan has been urged by International Monetary Fund (IMF) to Freeze the salaries of government employees in a bid to reduce the budget deficit. This is termed as fiscal consolidation by IMF.

Public debt is set to hit 90% of national economy and it is in the best interest of Pakistan to follow fiscal consolidation path insists IMF.

After four to five years, Pakistani economy struggles with fiscal and current account deficit and this time coronavirus has exposed the vulnerability of Pakistani economy.

Owing to the prevailing tight fiscal situation, growing public debt and Pakistan’s decision to seek debt relief from G20 countries, the IMF was asking Islamabad to freeze salaries of government employees, said sources in the Ministry of Finance.

However, the government is resisting the demand due to high inflation that has eroded people’s real income.

Nonetheless, it is inclined to abolish over 67,000 posts that have remained vacant for over one year and is also ready to further squeeze current expenditures including a ban on purchase of vehicles.

The proposal of ending the car monetisation allowance for grade-20 to 22 officers also came under discussion in the Ministry of Finance but it was unlikely to be implemented at the current stage.

The IMF’s key demand, which was also the reason for seeking to freeze the salaries, was that the government should announce a primary budget deficit target – total deficit excluding interest payments – of only Rs184 billion or 0.4% of gross domestic product (GDP).

Load shedding To Increase As Businesses Re-opened



K-electric has warned citizens of Karachi of an increased power outage during the summer season.

In a statement, the spokesperson of the electric supply company said that due to relaxation in the l0ckd0wn, the businesses have re0pened, causing a surge in demand.

He maintained that due t0 the l0ckd0wn, the supply 0f furnace 0il has als0 been disturbed due t0 which the p0wer generati0n has been affected.

The situati0n has resulted in increased electricity l0ad-shedding in Karachi and adjacent areas, he said.

The c0mpany’s sp0kespers0n menti0ned that the situati0n will return t0 n0rmal as s00n as the supply 0f 0il is regulated.

Citizens, 0n the 0ther hand, believed that K-electric is creating an artificial p0wer crisis.

Pe0ple were mad at the deteri0rating situati0n 0f p0wer supply and said that they endure several h0urs’ l0ad-shedding every day.

They maintained that every year, K-electric creates an artificial fuel sh0rtage t0 get funds fr0m the g0vernment while the c0rp0rati0n als0 increases charges in bills.

Reduction In Gas Prices To Domestic Consumers Cost SNGPL Rs.73 Billion



Gas crisis in the country has been mitigated by the government but this at the cost of Sui Northern Gas Pipeline Limited (SNGPL). Imported gas which normally is expensive has been advised by the government to be diverted to domestic consumers in the last two winter seasons and this has cost the SNGPL Rs.73 billion of the shortfall.

Oil and Gas Regulatory Authority revise the gas prices of natural gas for domestic consumers on six months basis whereas, the notification regarding re-gasified liquefied natural gas (RLNG) sale price to SNGPL is produced every month.

At present, there is no mechanism in place to recover RLNG from domestic consumers.

Sale price domestic consumers pay for gas is Rs.350 per unit while, on the other side, it cost SNGPL Rs.1700 for each unit delivered to the consumer. This accumulatively has piled up Rs.73 billion of tariff differential.

Due to the diversion of RLNG gas to consumers, the Petroleum Division has approached the Economic Coordination Committee (ECC), to recover the difference from domestic costumers.

The severe weather and shortage of supply from gas fields have compounded the shortfall in revenue and because to meet the demand the diversion was recommended without pricing mechanism to recover the cost, this has led to the loss of revenue. A mechanism should be in place to recover this shortfall from domestic consumers on a monthly basis.

As per the monthly diversion of RLNG to domestic consumers, it was proposed to ECC that SNGPL should be provisionally allowed to recover the cost accordingly.

Officials recommended the weighted average price of RLNG and locally produced gas prices to improve supply but this was denied by provinces.

$2.4b Kohala Hydroelectric Power Project Approved Under CPEC



Under the China-Pakistan Economic Corridor (CPEC), a tripartite agreement has been signed between China Three Gorges Corporation, Azad Jammu and Kashmir (AJK) government and Private Power and Infrastructure Board (PPIB). Under this agreement 1124-megawatt, Kohala hydroelectric power project in AJK will be established.

Once implemented, this project will provide clean and low-cost electricity to five billion units in AJK and Pakistan. This investment worth $2.4 billion will be the largest investment of its kind in the region.

102-megawatt Gulput project, located at Pounch river in district Kotli, AJK has met its commercial operation date.

For sustainable and reliable energy in the region, the government is committed to prioritizing renewable energy, hydroelectric power, and indigenous coal-based projects, Umar Ayub federal Minister for power revealed this on this occasion of 127th meeting of PPIB.

It was informed during the meeting that a coal-based power generation at Thar will get extension after pandemic settles down.

Electric Cars By MG launching Soon In Pakistan


Electric Cars

Recently it is revealed that JW will be setting up the largest private venture of electric cars manufacturing in Pakistan. the company has also signed an MOU with morris garages (MG) for electric cars.

The Chinese company had taken over the Morris Garages, which was originally started as a British company. Chinese president’s visit to Pakistan later this year is conceived to include the inauguration of electric cars plant in Pakistan.

MG vehicle is being road-tested in Pakistan and this has been revealed in a video by Javed Afridi owner of renowned Peshawar Zalmi, PSL franchise. It is also revealed in the video that this car is going to hit markets soon.

It was also revealed to the surprise of many of us that booking for MG E-Motion is already open.

If the tax benefits were awarded to the company the prices may be lower compared to local competitors. The expected prices are between 4 and 5.5 million.

Abbottabad Travel Guide


Abbottabad is a city located in the Hazara region of the Khyber Pakhtunkhwa province, in northeastern Pakistan. The city is situated in 110 kilometers north of the capital Islamabad, 130 kilometers from Rawalpindi and 150 kilometers northeast of Peshawar at an altitude of 1,260 meters (4,134 ft) and is the capital of the Abbottabad District. Kashmir lies to the east of the city. The city is prominent throughout Pakistan for its congenial weather, high-standard edifying institutions, and Military Establishment; Pakistan Military Academy Kakul. It remains a popular hill station magnetizing hundreds of thousands of tourists every year. One village in Abbottabad is Juniyan (Junia).

Visit www.mytrip.pk to plan your tour to Abbottabad.