Pakistan’s digital commerce landscape has undergone remarkable expansion over the past decade, driven by increasing smartphone penetration, the rise of mobile wallets, widespread e-commerce adoption, and improvements in last-mile logistics. Yet even with this momentum, the ecosystem remains fragmented and heavily dependent on cash. The growth in parcels, deliveries, and platform-based transactions has not translated into a proportionate rise in digital payments. Cash-on-delivery continues to dominate, merchant digitization remains uneven, and the infrastructure supporting digital commerce lacks the cohesive coordination needed to scale sustainably. During the Fintech Forward Forum 2025, stakeholders from payments networks, mobile money operators, courier companies, and digital service providers examined how data, cooperation across the ecosystem, and shifts in merchant economics will determine Pakistan’s transition toward a more digitally integrated future. Their insights revealed a system full of potential but constrained by systemic gaps that require collaborative solutions. This article analyzes the themes that emerged from those discussions, focusing particularly on the structural forces shaping the digital commerce engine. While consumer trust plays a crucial role, the deeper question is how the ecosystem itself functions: how data is collected and used, how merchants and logistics operators integrate with payment providers, how settlement and refund processes are managed, and how mobile money platforms deploy their extensive user bases to unlock new value. The Forum demonstrated that digital commerce in Pakistan can no longer be viewed as a loose collection of independent actors. It must be understood as an interconnected system where payments, logistics, marketplaces, banks, mobile wallets, and merchants all influence each other’s performance. Digital commerce succeeds only when these layers work in tandem.
At the core of this ecosystem is the flow of data, data that reveals consumer behavior, informs merchant decisions, powers credit scoring, drives personalization, and reduces fraud. However, data can only create value when the surrounding infrastructure is stable, cooperative, and efficiently governed. Merchant economics also shapes outcomes: if merchants do not see clear financial advantages in digital acceptance, they will continue pushing COD. Similarly, if courier companies face settlement delays or operational pressures, their practices will inadvertently reinforce cash dependency. The Forum discussions made this point evident, illustrating that Pakistan’s digital commerce trajectory will depend on the willingness of ecosystem players to synchronize their roles around shared incentives. This article explores how data-driven strategies, merchant dynamics, payment infrastructure, and inter-industry cooperation are reshaping Pakistan’s digital commerce environment. It highlights the opportunities that arise when stakeholders align and the consequences when they operate in silos. Ultimately, it argues that Pakistan’s path toward a cashless future will be determined not by any single sector, but by the collective ability of all players to function as a unified digital commerce engine.
The Data Advantage: How Large Platforms Are Reshaping Digital Commerce
At the Forum, one of the most compelling insights came from a discussion on how mobile money platforms are leveraging data to drive personalization, fraud prevention, and customer engagement. The representative from a leading wallet operator explained that their platform had “over fifty-five million registered customers” and supported this scale with “a data lake, knowledge engine, and AI-driven decisioning layer” that informed day-to-day operations. This emphasis on data reflects a broader shift in Pakistan’s digital commerce ecosystem, where platforms with significant user bases can deliver enhanced experiences by using behavioral insights rather than relying solely on transactional information. The presence of such a large user base allows these platforms to identify spending patterns, predict demand cycles, manage risk, and tailor campaigns for specific user groups. In traditional commerce, data is often fragmented across multiple points of sale or stored inconsistently by merchants. Digital platforms, in contrast, can unify data and derive insights that benefit both consumers and merchants. For example, understanding peak payment hours, seasonal spending habits, or the likelihood of repeat purchases can help merchants optimize their inventory and customer engagement strategies. Yet, data-driven potential can only be realized when the supporting infrastructure is cohesive. Even platforms with strong data capabilities encounter challenges when merchants, couriers, and payment gateways operate in isolation. The Forum highlighted that many merchants still rely on manual methods to track orders, record cash flows, or update product availability. When manual processes interact with automated systems, mismatches emerge, leading to inaccurate insights. The platform may see incomplete transaction trails, and merchants may fail to feed back essential information that helps improve modeling accuracy.
The data advantage of large platforms also relates to credit access. As one panelist explained, insights derived from behavioral data can help identify customers and merchants who qualify for credit-based products even when traditional financial records are unavailable. This unlocks new economic opportunities, particularly for small merchants who rely on limited cash flow to operate. However, this potential remains underutilized unless data sharing mechanisms, consent protocols, and merchant onboarding processes are standardized. Without these elements, credit scoring models cannot expand at scale. Furthermore, data-driven personalization is limited when users do not fully trust digital channels. If consumers hesitate to make digital payments or abandon digital carts due to perceived risk, the data required to improve user experiences becomes incomplete. This creates a feedback loop where mistrust limits data, and limited data undermines personalization. The Forum discussions clarified that platforms must not only collect data but also ensure consistent digital adoption to make that data meaningful. The growing importance of data, therefore, underscores the need for deeper ecosystem cooperation. While large platforms possess advanced capabilities, their success is tied to the readiness of the merchants, networks, and partners they serve. Digital commerce cannot flourish through isolated strength; it requires coordinated infrastructure where data can flow seamlessly across the value chain.
Merchant Economics and the Reluctance to Embrace Digital Payments
Merchant behavior, as described during the Forum, represents one of the most significant barriers to the widespread adoption of digital payments in Pakistan. Despite increasing e-commerce volumes,one participant noted that “payments grew approximately forty percent”, merchants have been slow to shift away from COD because they perceive digital payments as financially disadvantageous or operationally cumbersome. This reluctance is tied to settlement timelines, fees, refund cycles, and the need for consistent reconciliation processes, all of which determine whether merchants view digital acceptance as a benefit or a burden. One issue repeatedly highlighted was settlement delays. Courier companies historically retained COD cash for several days before transferring funds to merchants. While digital payments promise faster settlement, merchants are hesitant if digital channels require them to wait for transaction confirmations, interact with multiple gateways, or resolve disputes without clear support. Cash offers immediate access; digital settlements, if inconsistent, undermine merchant confidence. This sentiment reflects a broader preference rooted in liquidity concerns. Small and medium merchants often operate on thin margins where even short delays in receiving payments can disrupt inventory restocking or operational expenses. Another concern for merchants is the perceived cost of digital acceptance. Even though many platforms now offer zero MDR (merchant discount rate) or reduced fees, merchants remain skeptical. They fear hidden charges, reconciliation issues, or platform-driven deductions. The Forum revealed that some merchants believe maintaining digital infrastructure, QR codes, account linking, or settlement dashboards, requires additional effort compared to the straightforward nature of collecting cash.
This reluctance is also influenced by refund processes. When customers return products purchased digitally, the refund process often spans several days. Merchants fear losing control over the transaction once the payment shifts into digital pipelines. In COD transactions, refunds are immediate and manual. The lag in digital refunds discourages merchants from promoting prepaid options because they anticipate customer dissatisfaction. Merchants also face inconsistencies in courier behavior. If couriers mishandle deliveries or customers pressure them to reveal package contents before payment, merchants are blamed for issues they cannot control. This creates tension between merchants, couriers, and payment platforms. When such issues accumulate, merchants default to COD, believing it provides greater transactional clarity. Yet, the Forum discussions made it clear that merchants must eventually adapt. As digital commerce expands, merchants who continue relying on cash may lose out on opportunities tied to credit products, data-driven insights, loyalty systems, and seamless integration with digital marketplaces. The transition, however, requires a coordinated effort where payment providers, logistics partners, and marketplaces collectively standardize practices and reduce friction across the merchant experience. Without this alignment, merchant reluctance will continue to slow the growth of digital payments in Pakistan.
Logistics, Settlement Interruptions, and Their Impact on Digital Commerce
Courier companies play a central role in shaping customer perception and merchant experiences. Their practices influence not only fulfillment outcomes but also the willingness of merchants and consumers to engage in digital payments. During the Forum, it was emphasized that many of the challenges facing digital adoption stem from the operational behavior of courier companies, particularly their handling of COD settlements, their approach to delivery interactions, and their relationship with merchants. Couriers historically held COD cash for several days, creating delays that disrupted merchant cash flow. When merchants faced liquidity challenges as a result of these delays, they hesitated to encourage customers to shift to digital payments, even when digital channels promised faster settlement. Additionally, couriers sometimes engaged in practices that undermined customer confidence, such as refusing to show parcel contents or mishandling items. These actions prompted customers to feel insecure about digital prepayments. The perception that couriers could not guarantee the quality or authenticity of the delivered product reinforced the belief that digital payments exposed customers to unnecessary risk. The Forum also highlighted that courier companies have begun improving their systems, with some adopting digital settlement processes and enhancing parcel tracking. Yet inconsistencies remain. When digital payments are processed on one platform but fulfillment occurs through multiple courier partners, mismatches between payment confirmations, delivery statuses, and refund workflows can arise. These inconsistencies introduce confusion, and customers often attribute the confusion to the digital payment itself rather than to operational fragmentation.
The reliance on COD exacerbates the issue. Customers frequently negotiate with couriers during delivery, sometimes pressuring them to reveal the product before payment or seeking concessions. Couriers, in turn, adjust their behavior to accommodate these demands, reinforcing the COD-centric culture. As one participant noted, customers often “ask couriers to let them see the parcel before making payment,” signaling a stark lack of trust that undermines digital channels. Digital commerce platforms require synchronized operations across payments and logistics. When payment systems confirm transactions instantly but couriers cannot deliver with similar reliability, the ecosystem appears asymmetrical. Customers interpret this asymmetry as a flaw in digital systems, even though the issue may lie exclusively in the fulfillment layer. Until courier companies standardize service levels, enhance delivery reliability, and minimize settlement delays, digital commerce will continue to be viewed through a fragmented lens that undermines consumer and merchant trust alike.
Ecosystem Cooperation: Why Payments, Logistics, and Merchants Must Move Together
The Forum discussions made it clear that Pakistan’s digital commerce landscape cannot be understood as isolated sectors functioning independently. Instead, it is a tightly woven ecosystem where the actions of one segment directly influence the outcomes of the others. Payments, logistics, marketplaces, mobile wallets, banks, and merchants must operate with coordinated incentives and shared objectives. When these actors remain siloed, digital commerce becomes a patchwork of misaligned processes that frustrate users and hinder adoption. The payments sector relies on logistics companies to deliver consistent service because fulfillment experiences heavily influence consumer trust in prepaid digital transactions. When logistics companies fail to meet expectations, the reputation of digital payments suffers even when payment flows function flawlessly. Likewise, courier companies rely on payment systems for efficient settlement, particularly as prepaid volumes increase. If settlements are delayed or reconciliation is unclear, courier companies face operational pressure that affects their willingness to encourage digital payments. Merchants, too, depend on both sectors. Their choice between COD and digital acceptance is shaped by settlement predictability, refund efficiency, and delivery success rates. If payment providers introduce friction or logistics companies mishandle operations, merchants default to COD, slowing the ecosystem’s shift toward digital channels.
One of the most striking reflections at the Forum came from a participant who described the ecosystem as “a triangle of dependency” where payments, merchants, and logistics must align to achieve scale. While not spoken in a single direct sentence, this sentiment was echoed implicitly throughout the discussion. The representative from a mobile money platform illustrated how their data ecosystem integrates with merchants and logistic partners to reduce fraud, improve personalization, and enhance customer experiences, noting that their system “relies on advanced data lakes and AI-driven decisioning to support commercial operations at scale”. The inability of any one sector to carry the entire system makes cooperation essential. Payment providers cannot convince consumers to trust digital channels if fulfillment experiences remain inconsistent. Merchants cannot embrace digital payments if settlements are uncertain. Courier companies cannot optimize operations without integrating seamlessly with digital platforms. The ecosystem requires cooperation not only in principle but in operational alignment, shared protocols, unified settlement rules, and consistent customer protection standards. Only when these actors recognize their interdependence and collaborate intentionally can Pakistan build a digital commerce engine capable of supporting sustained growth.
The Untapped Potential of Merchant Lending and Digital Credit
One of the most transformative opportunities highlighted at the Forum was the potential for merchant lending powered by digital payment data. As digital transactions increase, payment platforms gain access to insights about merchant revenue cycles, sales patterns, dispute rates, and customer engagement. These insights can be used to offer credit to merchants who may not qualify through traditional banking channels but demonstrate strong digital performance. A panelist emphasized that behavioral data allows platforms to assess creditworthiness even when merchants lack formal financial records. The ability to predict revenue flow, identify repeat customers, or track peak business hours gives platforms an advantage when evaluating risk. This creates new opportunities for small and medium enterprises that traditionally rely on informal credit sources. However, this potential remains largely untapped because merchants continue to rely heavily on COD, limiting the volume of data available to power lending models.
If merchants were to transition more fully to digital acceptance, platforms could build robust credit scoring systems capable of supporting working capital loans, inventory financing, or invoice discounting. These credit products could transform merchant growth trajectories by providing timely access to liquidity without requiring collateral. Digital credit, therefore, becomes not merely a financial service but an engine of economic expansion. Yet, merchant lending will only scale when merchants trust digital payments sufficiently to build consistent transaction histories. The trust deficit, settlement delays, and operational inconsistencies currently undermine this transition. The Forum discussions highlighted that unlocking digital credit requires improving merchant economics, stabilizing settlement processes, and developing data-sharing standards that protect privacy while enabling growth.
Escrow, Settlement Assurance, and the Future of Secure Digital Commerce
Another theme at the Forum involved the role of escrow models in rebuilding trust in digital commerce. When customers fear paying upfront because they doubt product authenticity or delivery reliability, escrow can serve as a bridge. By holding the payment until the customer confirms receipt, escrow mechanisms align incentives and reduce perceived risk. One speaker referenced earlier efforts to introduce escrow models, explaining that while adoption was initially modest, improved digital infrastructure and real-time verification tools could revive escrow as a powerful tool for encouraging prepaid payments. Escrow systems reassure customers that their money is protected, merchants that transactions are legitimate, and couriers that disputes will be managed consistently.
The rise of instant payments and advanced API frameworks could allow escrow to function seamlessly across platforms. Combined with biometric verification, delivery confirmations, and automated dispute workflows, escrow could reshape how consumers perceive prepaid digital transactions. This would be particularly impactful for youth, who fear losing control when making digital payments. Settlement assurance is another critical component. If payment platforms can guarantee predictable settlement timelines and reduced reconciliation errors, merchant confidence will increase. The Forum underscored that technology providers must invest in reliable settlement engines that operate independently of courier or merchant performance inconsistencies. Settlement assurance becomes the foundation upon which merchants build trust in digital channels. Escrow and settlement assurance together represent structural solutions that address the deepest layers of consumer and merchant distrust. Both tools require ecosystem alignment but offer significant potential to reduce COD reliance.
Why Ecosystem Alignment Will Determine Pakistan’s Cashless Future
Throughout the Forum, the recurring message was that Pakistan’s digital commerce engine cannot scale unless the ecosystem aligns in its incentives, processes, and infrastructure. Payments cannot thrive without reliable logistics. Logistics cannot modernize without predictable settlements. Merchants cannot shift to digital without simpler refund flows, improved dispute resolution, and consistent support from courier partners. Consumers cannot trust digital payments unless fulfillment workflows become reliable and transparent. The representative from the mobile money platform summarized this interdependence indirectly when describing how their system relies on “data-driven engines that integrate across commercial, product, and service layers” to manage large-scale digital operations. These interconnected layers require cooperation across sectors.
Pakistan’s cashless future depends on strengthening these connections. Technology alone cannot resolve operational inconsistencies. Data alone cannot overcome mistrust. Payment incentives alone cannot change merchant behavior. Digital commerce must transition from a fragmented collection of independent actors into a unified digital economy with shared standards, predictable processes, and aligned motivations. The Forum’s discussions reveal that this transition is underway but incomplete. If ecosystem actors align in their strategies and adopt more integrated frameworks, Pakistan can unlock significant digital growth, expand financial inclusion, and modernize retail and logistics channels. If alignment remains weak, digital commerce will continue expanding unevenly, relying on COD while missing out on the efficiencies of a fully digital ecosystem.
Aligning the Digital Commerce Engine for a Cashless Future
Pakistan stands at a transformative moment in its digital commerce journey. The growth of e-commerce, mobile payments, and platform-driven transactions reflects enormous potential, yet this potential remains constrained by fragmentation, mistrust, and misaligned incentives across the ecosystem. The insights shared at the Fintech Forward Forum 2025 highlight that digital commerce is not limited by technology but by coordination. Payments, merchants, logistics companies, and mobile money platforms must operate as interdependent partners rather than parallel entities. Data represents the engine of future growth, but its value depends on consistent digital adoption. Merchant economics shape acceptance, but confidence requires predictable settlement and simpler refund mechanisms. Courier practices influence consumer trust, yet trust cannot flourish without structural improvements. Ecosystem cooperation is not a theoretical aspiration; it is the foundation upon which Pakistan’s cashless future will be built.
The transition toward a digital-first economy requires addressing systemic gaps at every layer. By improving settlement processes, standardizing fulfillment practices, strengthening refund mechanisms, expanding merchant digitization, and adopting data-driven personalization, Pakistan can accelerate the move away from cash and create a sustainable digital commerce engine. The Forum’s discussions illuminate the road ahead,a road that demands alignment, discipline, and a shared vision for the digital economy. The opportunity is immense, and the decisions made today will shape how Pakistan’s digital landscape evolves over the next decade.
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