Abstract:
Almost half the world’s adult population lacks access to a formal bank
account and other financial services. Pakistan is no exception and it is also among
those countries at the lower end of the spectrum of financial inclusion. However,
steps are being taken by government regulators and the private sector to improve
access to financial services such as credit, savings, remittances and insurance. The
introduction of mobile banking is a notable step in this context. Mobile banking,
which comprises mobile wallets and over-the-counter transactions, is rapidly
growing around the world and has the potential to reduce barriers to financial
inclusion and thus transform economies. The benefits of this platform are even more
pronounced for economies with a weak financial architecture and where formal
banking entails considerable costs in terms of time and distance. This paper traces
the history of mobile banking in Pakistan, studies various models of mobile banking
and assesses its current state using the available data to understand how this
segment has evolved and transformed conventional banking structures in the
country. It also touches on the ecosystem that needs to be built in Pakistan to utilize
the full potential of mobile technology.
