Pakistan's first payment gateway wants to kill COD

From a banking family to Pakistan’s first payment gateway

The episode opens with Muzamil setting the scene: he tried to run a small e-commerce business four years earlier and ran into payment problems at every turn. That personal frustration is precisely why he wanted Adnan Ali in the room. Adnan is the CEO of PayFast — described from the outset as Pakistan’s first State Bank of Pakistan-regulated digital payment gateway, licensed under the SBP’s PSO/PSP framework.

Adnan’s path to that chair runs through a banking family. His uncle was a BCCI banker, his cousins followed, and the expectation was that he would too. He did a BCom, picked up an IT certification as the information age arrived, and joined a bank where he landed in the e-banking department almost by accident — at a time when no Pakistani bank had a serious digital division. Over the next sixteen years he moved through Islamic banking, branch banking, and digital transformation roles, eventually becoming EVP at 35, which he describes as possibly the youngest in Pakistan at the time, and later Chief Digital Officer overseeing more than a hundred people across seven or eight departments.

The turning point came when Summit Bank announced a merger with Sindh Bank. Adnan felt that working inside a government-linked institution would slow down the kind of innovation he wanted to pursue. He also noticed something larger: “Banks उस race तक ना पहुंच सकें जो कि digital transformation आने जा रही थी” — banks might not be able to keep pace with the digital transformation that was already reshaping daily life through Careem, Uber, and Foodpanda. Around the same time, the late Mahmood Kapoor, founder and CEO of Wamza, approached him with the idea of building a fintech focused on payments and obtaining a PSP license from the State Bank. After a year of conversations, Adnan made the move.

Why 85% of e-commerce still runs on cash

Later in the discussion, Muzamil asks the obvious question: if Pakistan’s e-commerce industry is heading toward $4 billion in annual volume, why is so little of it actually paid for digitally? Adnan’s answer is precise. Only 15% of e-commerce transactions are prepaid. The remaining 85% are cash-on-delivery.

The reason is not consumer reluctance — it is instrument scarcity. Pakistan has roughly 1.8 million credit card holders, and credit cards account for 50 to 60% of prepaid e-commerce transactions. Of the approximately 45 million debit cards in circulation, half are not enabled for online transactions. “جو debit cards Pakistan میں total 45,000,000 ہیں اس میں سے half of them online banking پر enabled ہی نہیں ہیں,” Adnan explains. The base of people who can actually pay online is far smaller than the base of people who technically have a bank account.

PayFast’s response to this is its account-based payment method. Instead of entering a card number and CVV, a customer enters their bank account number and CNIC. The bank sends an OTP to the registered mobile number, the customer enters it, and the transaction is done. No plastic required. This expands the potential payment base from 1.8 million credit card holders to 80 million account holders. Adnan notes that on PayFast’s own system, account-based transactions already outnumber card-based ones.

The infrastructure gap: 75,000 POS terminals for a country of 220 million

Even with better instruments, there is a physical acceptance problem. Muzamil pushes on why adoption has been so slow despite years of digital wallet activity, and Adnan points to a stark number: Pakistan has only 75,000 POS terminals. Dubai alone has 350,000. Iran and Turkey have millions. “ہمارے پاس Pakistan میں صرف 75,000 post terminals ہیں versus صرف دبئی میں ساڑھے تین لاکھ ہے,” he says. A consumer with a debit card cannot use it if there is nowhere to tap it.

The cost of a POS terminal from an international brand runs around $300; a Chinese-brand equivalent is around $150. Adnan’s view is that Pakistan needs at least one million terminals before card acceptance becomes genuinely widespread. The path there, he argues, runs through soft POS — turning smartphones into acceptance terminals — and through QR codes, which eliminate hardware costs entirely.

What Raast actually does — and why it is not competition

Muzamil raises Raast, the State Bank’s instant payment system, and asks whether it makes existing infrastructure like OneLink redundant, and whether it competes with PayFast. Adnan is direct: it does neither.

Pakistan remains a 90%-cash economy. The fundamental problem is that cash transactions leave no data trail, which means no tax base, which means the government cannot fund services, which means poverty persists. Raast’s purpose is to make digital transactions as instant and frictionless as cash — settling in real time, interoperable across all banks, and cheap to access because the State Bank is not a profit-making institution.

For companies like PayFast, Raast is a platform, not a rival. “رأست کو use کرتے ہوئے ہم ایسے different use cases بنانا شروع کریں گے” — by building on top of Raast’s APIs, a fintech can reach every bank’s customers without negotiating individual connectivity agreements with each institution. The analogy Adnan uses is OneLink: when you withdraw cash from an MCB ATM using an HBL card, OneLink handles the settlement in the background. Raast does the same thing, but faster, cheaper, and with a single QR code that any bank’s customer can use at any merchant.

He points to India’s UPI as the reference case. Google Pay alone processes $150 billion in India. Pakistan’s 60 million smartphone users and 100 million internet-capable users represent a ready end-mile — the infrastructure just needs to catch up.

The onboarding experience: two days, no branch visit

Muzamil shares a story that lands hard. He has around sixteen employees and tried to open a business bank account. He started conversations in October or November. The account opened at the end of January — three months later. “This is ease of doing business,” he says, flatly.

PayFast is built as a deliberate contrast to that experience. A merchant goes to the PayFast website, fills out a digital sign-up form, attaches documents, and submits. If there are no discrepancies, approval takes two days. The company’s APIs are publicly published — more than any other institution in Pakistan, Adnan claims. A WhatsApp button on the site connects to AI-assisted support around the clock, with human agents available when needed. For non-technical merchants — women entrepreneurs running businesses from home, a seller in Layyah who has never heard of an API — the team provides step-by-step tutorials and hands-on integration support.

The fee structure is straightforward: a percentage of transaction volume, ranging roughly between 1.5% and 2% for account-based transactions, with card-based transactions varying by volume. There is no per-transaction flat fee. Adnan notes this is cheaper than Stripe’s standard 3% plus $0.30 per transaction in the US, and that Raast will compress costs further.

Freelancers, invoicing, and the 10–15% fee problem

One of the more concrete use cases Muzamil raises is freelancers. Pakistan has around 900,000 freelancers bringing in approximately $500 million annually, but the mechanics of getting paid are painful. PayPal does not operate in Pakistan. Moving money through informal channels costs 10 to 15% in layered fees. Adnan describes the solution PayFast built: an invoicing portal. A freelancer without a website generates an invoice through the portal, sends it to a client in the US, France, Dubai, or Saudi Arabia, and receives payment into a regulated Pakistani account. The cost drops to 2 to 3%. The portal also tracks all invoices in real time — which have been paid, which are outstanding — giving freelancers a reconciliation tool they previously had to manage manually or not at all.

Adnan mentions that PayFast’s first paid social media advertisement was targeted specifically at freelancers, and that the company is a founding member of the Pakistan Freelancers Association.

The regulator as oxygen provider

Muzamil asks whether the State Bank has genuinely become more innovative. Adnan, who has worked alongside regulators for twenty years across both banking and fintech, says yes — and with evident feeling. He describes a use case where PayFast worked with UnionPay International and Faysal Bank to enable mobile-based tokenization: a bank’s app user could create a virtual card and tap to pay. When PayFast approached the State Bank, the regulation for it did not yet exist. “They were so supportive,” Adnan recalls. “It’s a good use case and you are our PSP — we’ll be more than happy to support you.”

He points to a series of regulatory moves as evidence of a coherent direction: the EMI regulation, the digital banking regulation (with five digital bank licenses to be issued), Raast’s rollout, the Roshan Digital Account, digital merchant onboarding guidelines, and NADRA biometric verification via mobile app. “ہم جو fintechs ہیں ہمارے لیے regulator oxygen provide کرتے ہیں” — the regulator provides oxygen for fintechs. Adnan sits on the board of the Pakistan Fintech Association, through which fintechs provide feedback on proposed regulatory frameworks.

Two Pakistans in 2050

By the end of the conversation, Muzamil asks Adnan to look ahead to 2050, when Pakistan will be 103 years old. Adnan offers two scenarios, and he means both of them.

The optimistic one: Pakistan’s youth — 63% of the population, roughly 100 million children — enters the mainstream over the next three decades. If the country invests in digital literacy and skills, those young people become the engine of a services export economy. Software exports are currently around $2 billion. The trade deficit runs $20 to $25 billion annually. Adnan’s argument is that IT exports and freelancing income could close that gap, ending the cycle of IMF dependency. “ہمارے بچے نو لاکھ freelancer $500,000,000 Pakistan میں لے کر آ جاتے ہیں” — 900,000 freelancers already bring in $500 million. Scale that, and the arithmetic changes.

The alarming one: those same 100 million children, uneducated and unskilled, enter an economy that cannot absorb them. Pakistan already has the world’s second-largest population of out-of-school children. If that cohort reaches adulthood without civic sense, employable skills, or economic opportunity, the consequences are severe. “یہ دس کروڑ بچے — کیا یہ atom bomb نہیں ہے؟” — are these 100 million children not an atom bomb?

His conclusion is that the choice between these two futures is not the government’s alone to make. Fintechs, podcasters, educators, and entrepreneurs all have a role in nation-building. Muzamil, for his part, says he hopes it is the first path — and that after an hour with Adnan, he plans to check out PayFast himself.