‘Local branchless banking has had to face few challenges’ by Faryal Najeeb

KARACHI: One of the key barriers to any new innovation in the economy or corporate sector is the rules and regulations of the country and in this regard Pakistan’s branchless banking has been fortunate not to have faced tough challenges, said Head of Customer Strategy and Market Activation, Visa International, Lito Villanueva.

Speaking to The News against the backdrop of the 5th International Conference on Mobile Banking in Pakistan on Thursday, Villanueva said that compared to other emerging markets, Pakistan has had better success.

He said that in this country, the unbanked sector is extremely high, but the mobile penetration amongst consumers is relatively good. This point towards high potential in the mobile commerce sector, he added.

However, he stated, Pakistan needs to make sure that it has a dynamic agent network. The vendors catering to branchless banking need to be provided with ample information, training on liquidity management and a check and balance needs to be kept at the entire system for its success.

Villanueva went on to say that each market has its own preferences and success can be measured by cultivating to their needs. “Just looking at how many customers you have is not enough. That is just the tip off the ice berg,” he said, adding “value addition is pivotal to any firm’s success”.

Meanwhile, according to Country Manager of Visa Pakistan, Amer Pasha, mobile banking is at its infancy and for purpose of wide-based adoption, it’s pivotal to exchange views and ideas.

“In certain areas, the industry has to work together,” he said, adding distribution and awareness are the biggest challenge for the uptake of branchless banking.

When asked how Pakistani consumers can be encouraged to adopt branchless banking and enhance the use of credit cards, Pasha said that financial literacy is low even amongst the literate people in Pakistan.

He said that people here did not fight for their rights and did not take action for their consumer rights. “If a shop is charging a surcharge for using plastic money, people should stop visiting it and let them know that it’s against their consumer rights,” he said.

In today’s day and time, the centre of power has moved from the corporate institutions to the consumers who are better judge of the goods and services available to them, he added.

Referring to the mobile conference, Pasha said that consumer element should be more in such events.

“In a country like Pakistan, we have all key stakeholders such as the distributors and the vendors, but the most important element- the end user is missing. Therefore it’s important to understand consumer behaviour,” he said.

In Pakistan, commercial units themselves prefer cash so that they can remain under the undocumented economy. We, as stakeholders, should help create awareness amongst these vendors and explain to them the advantages of coming under the documented sector,” he added.

Source The News