E-COMMERCE

ASSIGNMENT #01
MUHAMMAD RIZWAN KHOKHAR (SP14-BBA-067)
HAMZA SHAMS (SP14-BBA-040)

FAHEEM MANZOOR (SP1-BBA-053)

SECTION: BBA-6A

SUBMITTED TO: OMER VIKAS

SUBMISSION DATE : 14TH FEBURARY, 2018

 ROLE OF E-BANKING IN PAKISTAN
E-BANKING IS NOT SOMETHING NEW TO PAKISTAN. IT WAS IN 1987 WHEN FIRST EVER ATM
WAS INSTALLED IN THE COUNTRY . E VEN TILL LATE 1990S, ATM GROWTH AND ISSUANCE OF
CARDS REMAINED VERY LOW. THE REAL GROWTH IN ATMS AND CARDS ISSUANCE WERE SEEN
AFTER THE FORMATION OF NATIONAL SWITCHES IN 1999 AND THEN ACCELERATED WITH SBP'S
CIRCULAR IN 2002 MANDATING THE BANKS TO ISSUE CARDS TO THEIR ACCOUNTHOLDERS AND
CONNECT TO EITHER OF THE 2 SWITCHES .

STATE BANK OFPAKISTAN PLAYED A KEY ROLE IN THE E -BANKING GROWTH BY PROVIDING
ENABLING ENVIRONMENT. W ITH EFFORTS OF SBP AS A REGULATOR , IT PAVED WAY FOR BANKS
TO ISSUE CARDS TO ITS CUSTOMERS AND GIVE ACCESS TO BANK ACCOUNTS OVER ATMS BY
INTEGRATING THE BANK WITH 1LINK OR MNET. SBP LATER MANDATED IN 2006 THE TWO
NETWORKS TO INTER -CONNECT , WHICH MADE IT POSSIBLE FOR ANY CARDHOLDER OF ANY
BANK TO TAKE CASH OUT FROM ANY ATM OF ANY BANK ACROSS P AKISTAN . SBP HAS
CONTINUED TO BRING OUT REGULATIONS TO IMPROVE THE QUALITY OF SERVICE DELIVERED
THROUGH THE E -BANKING CHANNELS AND ENSURE THAT THE CUSTOMERS ' SERVICE IS NOT
COMPROMISED .

WITH THE GROWTH OF ECONOMY, THE FINANCIAL TRANSACTIONS INCREASED IN GREAT

NUMBERS AND IT WAS FELT TO EXTRACT MORE BENEFITS FROM THE SWITCHING NETWORK.
THIS LED TO SOME INNOVATIVE SOLUTIONS THAT MADE BANKING EASIER, FASTER , COST-
EFFECTIVE AND RELIABLE FOR EVERYONE . 1LINK TOOK THE INITIATIVE TO OFFER CARD
SCHEME SERVICES SUCH AS V ISA AND UNION P AY THAT INCREASED PLASTIC CARDS
ACCEPTABILITY OUTSIDE OF P AKISTAN . IBFT (INTERBANK F UNDS TRANSFER ) AND UBPS
(UTILITY BILLS PAYMENT SOLUTION ) MADE IT EASY TO RAPIDLY TRANSFER FUNDS TO OTHER
ACCOUNTS AND PAY UTILITY BILLS FROM ANY OF THE ALTERNATE DELIVERY CHANNELS
PREVIOUSLY RESTRICTED TO BRANCHES ONLY . THIS GROWTH SOON LED TO THE NEED FOR
BRANCHLESS BANKING .

BRANCHLESS BANKING HAS EXPERIENCED SIGNIFICANT GROWTH IN THE PAST FEW YEARS .
MOBILE BANKING IN PARTICULAR HAS GREATLY MAPPED THE UNBANKED POPULATION OF
PAKISTAN. ONE SUCH EXAMPLE IS EASYPAISA LAUNCHED BY TELENOR IN COLLABORATION
WITH TAMEER M ICRO F INANCE BANK PROVIDING INSTANT MONEY TRANSFER , LOCAL
REMITTANCE THROUGH ITS HUGE AGENT NETWORK AND CELL PHONES . UP AYMENTS IS
ANOTHER MOBILE BANKING PLATFORM SET -UP BY U FONE THAT ENABLES BANKED CUSTOMERS
TO SECURELY PERFORM TRANSACTIONS VIA USSD. S IMILARLY INTERNET BANKING CHANNEL
ADOPTION IS FAST CATCHING UP AND IS NOW OFFERED BY ALMOST ALL THE BANKS IN
PAKISTAN.
THE E-BANKING INDUSTRY IS MUCH DIFFERENT FROM WHAT IT WAS A DECADE AGO.
ACCORDING TO S TATE BANK PAKISTAN 'S
OF QUARTERLY REVIEW OF FISCAL YEAR 2013, BY
SECOND QUARTER THE INDUSTRY HAD :

-- 6,232 ATMS ALL OVER PAKISTAN

-- 9,896 REAL -TIME ONLINE BRANCHES (RTOBS) OUT OF 10,523 IE 94%

-- 20.72 MILLION PLASTIC CARDS ISSUED IN THE COUNTRY

-- 79.45 MILLION OVERALL E-BANKING TRANSACTIONS

-- RS 7.6 TRILLION VALUE OF TRANSACTIONS

TO UNDERSTAND THE GROWTH OF E-BANKING PAKISTAN ONE HAS TO LOOK AT

INDUSTRY IN
THE CHANGE OF NUMBERS OVER THE YEARS IN THE INFRASTRUCTURE . IN J UNE 2006 THERE
WERE 3,555 RTOB S, 1,612 ATMS AND 32,331 POS THAT INCREASED TO 9,896 RTOBS, 6,232
ATMS AND 34,724 POS BY DECEMBER 2012. SIMILARLY THERE HAS BEEN GROWTH IN
VARIOUS SEGMENTS OF E-BANKING INFRASTRUCTURE AS SHOWN IN THE GRAPH ( SOURCE:
STATE BANK).

THE INFRASTRUCTURE LAID DOWN BY NATIONAL SWITCHES HAS PROVED TO BE OF IMMENSE

HELP TO THE ECONOMY . IT NOT ONLY ENERGISED THE FINANCIAL SECTOR BUT COMMON
PAKISTANI FOUND IT EASY TO PERFORM BANKING ACTIVITIES EVEN AFTER BANKING HOURS .
THE SAME INFRASTRUCTURE PROVED CRUCIAL TO THE COUNTRY IN TIMES OF NEED AND TPS
PLAYED PIVOTAL ROLE AS TECHNOLOGY BACKBONE.

ONE SUCH INSTANCE IS WHEN FLOODS HIT NORTHERN AREAS OF PAKISTAN AND TRAVELLED
ALL THE WAY DOWN TO SINDH PROVINCE ; A SIGNIFICANT POPULATION WAS DISPLACED THAT
NEEDED SUPPORT. WHEN INTERNATIONAL DONATIONS BEGAN TO POUR INTO PAKISTAN, THE
EXISTING INFRASTRUCTURE WAS UTILIZED TO ISSUE WATAN CARDS (VISA DEBIT CARDS ) BY
UBL AND OTHER BANKS TO FINANCIALLY SUPPORT THE IDP S IN COLLABORATION WITH
NADRA. THE IDPS WERE REGISTERED USING BIOMETRICS AND NIC NUMBERS AND EACH
FAMILY WAS GIVEN A W ATAN CARD WHERE DONATION WAS DIRECTLY DEPOSITED THROUGH
BANKS . THE WHOLE PROCESS OF REGISTRATION TOOK 13 MINUTES AND FUNDS WERE
TRANSPARENTLY MADE AVAILABLE TO THE IDP S. BY THE END OF 2012, NADRA HAD ISSUED
966,619 WATAN CARDS TO MORE THAN 1.1 MILLION FAMILIES , DISTRIBUTING RS 37.896
BILLION .

SIMILAR CONCEPT WAS IMPLEMENTED FOR BENAZIR INCOME SUPPORT PROGRAM TO ISSUE
BISP CARDS TO ELIGIBLE FAMILIES FOR POVERTY ALLEVIATIONS , PROVIDING RS 1,000 PER
MONTH ON QUARTERLY BASIS. THERE ARE CURRENTLY 1.5 MILLION BENEFICIARIES OF BISP
PROGRAM IN THE RURAL AREAS OF THE COUNTRY THAT REGULARLY RECEIVE FUNDS THROUGH
THIS MECHANISM .

E-BANKING HAS SIMPLIFIED LIVES OF A COMMON MAN IN THE COUNTRY . W ITH THE
POPULARITY OF E -BANKING AMONG THE ACCOUNTHOLDERS , ELECTRONIC CHANNELS ARE
PREFERRED OVER BRICK AND MORTAR BRANCHES FOR REGULAR ACCOUNT INQUIRIES , CASH
WITHDRAWALS AND FUNDS TRANSFERS . THERE IS NOW A STEADY GROWTH SEEN IN
ELECTRONIC FUNDS TRANSFERS AND RETAIL PAYMENTS . IMMENSE GROWTH POTENTIAL IS
EXPECTED IN BRANCHLESS BANKING SPACE WHICH IS WIDELY BELIEVED TO ALSO IMPROVE
THE ECONOMIC HEALTH OF P AKISTAN . THE BANKS ARE NOW ON THE TRACK OF SERVICE
INNOVATION AND VALUE CREATION FOR THE CUSTOMERS THROUGH LOW COST SERVICE
DELIVERY WHICH IS ONLY POSSIBLE WITH ALTERNATE DELIVERY CHANNELS.

TPS PHILOSOPHY IS ABOUT PREVENTING SEGMENTATION IN THE BANKING INDUSTRY, HELPING

TO CREATE INNOVATIVE SOLUTIONS AND ENCOURAGE FURTHER GROWTH IN THE FINANCIAL
SECTOR . THE INFRASTRUCTURE HAS ALREADY BEEN LAID AND VARIOUS METHODS OF
PAYMENTS ARE BEING INTRODUCED THAT WAS UNTHINKABLE BEFORE . CURRENTLY 65% OF
PAKISTAN 'S POPULATION IS BELOW THE AGE OF 25, AND YOUTH IS MORE ADAPTIVE TO
TECHNOLOGY AND INNOVATIONS , CREATING ENDLESS FUTURE POSSIBILITIES . AS TECHNOLOGY
GETS BETTER , SO WILL THE FINANCIAL INDUSTRY .