PayPak is a domestic alternative to Visa and Mastercard in the Pakistani market. Users can make POS payments and ATM withdrawals within the country via PayPak-supported debit cards.
Banking in Pakistan is a major sector of the economy, with over 50 million bank accounts in the country in 2018. However, a large portion of the population remains unbanked, and the State Bank of Pakistan is continually pushing toward a cashless economy.
For decades, Visa and Mastercard have been the country’s largest players, providing users with electronic funds transfer services.
In recent years, a new payment gateway has been launched as direct competition to the financial services giants.
This article discusses the idea behind PayPak and how it differs from the other major card providers in Pakistan.
What Is PayPak?
PayPak was launched by 1Link to save inter-change costs and provide an independent payment method to Pakistanis.
Much like Visa, Mastercard, UnionPay, or American Express, PayPak is a funds transfer payment service launched by 1Link under the guidance of the State Bank of Pakistan. It is a domestic service that allows users to make POS payments and withdraw cash from ATMs anywhere in Pakistan.
With the launch of PayPak, Pakistan became the 28th country in the world to offer its domestic payment scheme. It was formally launched on 5th April 2016 and offered a low-cost alternative to international payment providers.
Why Was PayPak Launched?
PayPak was launched to avoid dependence on international financial giants like Visa and Mastercard, which take up around 65% of the country’s total bank card market share.
Another purpose of PayPak was to provide ATM debit cards at low cost to the relatively poor population of Pakistan, as PayPak charges are less than Visa and Mastercard.
Difference Between PayPak and Other Bank Cards (Visa, Mastercard, and UnionPay)
PayPak debit cards are cheaper than Visa or Mastercard debit cards. However, PayPak cards cannot be used for international transactions.
Being a local alternative to established card providers like Visa and Mastercard, PayPak has seen its share of difficulties regarding its adoption and acceptance.
Here are the key differences between PayPak and other bank cards in Pakistan:
- Visa and Mastercard ATM debit cards are generally more expensive than PayPak.
- PayPak charges fewer fees as the charges are based on Pakistani Rupees instead of the conventional Dollars, saving inter-change costs.
- PayPak cannot be used for online transactions and international transfers.
- PayPak debit cards generally have lower transaction limits than Visa and Mastercard-supported ATM debit cards.
- Users cannot order supplementary debit cards with PayPak. However, you can usually do so with Visa and Mastercard debit cards.
PayPak Loyalty Program
The service provider launched the PayPak loyalty program to offer unique benefits to PayPak card users. This program aims at incentivizing bank account holders to opt for PayPak debit cards by providing them discounts and deals via the Golootlo app.
One of the biggest offers is that PayPak users registered with Golootlo can avail 10% flat discount on any domestic flight with Pakistan International Airlines (PIA).
Follow these steps to apply for Golootlo discounts with your PayPak debit card.
Open the Golootlo app and click on the Profile tab at the bottom right of the screen.
On the next page, click on Subscribe Now button to become a Gold Member.
PayPak and UnionPay users get free discounts and deal with Golootlo, while users of Visa and Mastercard debit cards have to pay a subscription fee to avail of these offers.
Click on the second option if you have a PayPak or UnionPay ATM debit card from any participating bank of the PayPak loyalty program.
Select your bank and enter your debit card number. Click on Subscribe to Gold to get access to exclusive deals with Golootlo.
If you have a PayPak or UnionPay debit card issued from a non-participating bank, you cannot avail of this offer. These users and Visa and Mastercard debit card holders must select the first option in step three.
Click on any package as per your preference. I have chosen the Half Yearly package for demonstration.
Select your payment method from the listed options. I will go ahead with Easypaisa.
Check the details and click on Pay Securely.
You will get a prompt in your Easypaisa app. Click on Approve to make the payment. You are now a Golootlo Gold member.
Here is a list of PayPak Loyalty Program participating banks:
- Faysal Bank
- Bank Islami
- Bank Al Habib
- Microfinance Apna Bank
- First Women Bank Limited
- Mobilink Microfinance Bank
- MCB Islamic Bank
- SME Bank
- Sindh Bank
- Silk Bank
- Samba Bank
- Telenor Microfinance Bank
- U Bank
- Standard Chartered
- Soneri Bank
- NBP Funds
PayPak and UnionPay Co-Badged Debit Cards
Several Pakistani banks, such as Allied Bank, have launched co-badged ATM debit cards with both PayPak and UnionPay payment schemes included.
With these cards, users can perform domestic transactions via PayPak and use UnionPay for international transactions.
PayPak was launched to provide a cheaper alternative to the big financial players in Pakistan. Its adoption has been hindered due to its inability to offer online payments.
However, building a domestic payment system is vital to becoming independent. With Visa and Mastercard suspending their services in Russia after the political turmoil, the idea of having a local electronic funds transfer service makes even more sense.
Though PayPak is relatively new, it has gained significant traction over the past few years. With much of the population untapped, there is huge potential and opportunity for PayPak to become the dominant card provider in Pakistan.