Despite an announcement last year, the government has failed to unveil e-commerce rules that would have allowed global online payment giants PayPal and Ali Baba to offer their services in the country.
Minister of State for Information Technology (IT) Anusha Rehman had announced last year that the government would solicit mechanism to coordinate with international e-commerce players such as PayPal and Ali Baba, encouraging them to establish their setup to enable e-commerce services in Pakistan.
The government had set introduction of ecommerce in the country a top priority area to counter the decline in exports. However, there was another issue as online shopping could result in increasing the import bill which would have declined the foreign exchange reserves.
An official source said that the IT Ministry initiated the work with the help of the commerce ministry but there were some turf issues between the two ministries that still remain to be resolved. The finance ministry was worried that the consumers may turn to buy foreign brands and that will be a big drain on hard to maintain reserves.
Pakistan had planned to invite global online payment giants. The move followed a decision by the global Financial Action Task Force to remove Pakistan from its list of high-risk and non-cooperative jurisdictions linked to money laundering.
Pakistan is now ranked in FATF’s white-list, meaning that Pakistan has now internationally accepted anti-money laundering and counter-terrorist financing standards in place which were previously not available.
But still neither US-based PayPal nor Chinese e-commerce giant Alibaba (which operates a service called Ali pay) currently work inside Pakistan, as the country has strict regulation limiting online payments for services. The local vendors offer cash-on-delivery options.
Pakistan has a growing IT industry that mainly provides outsourcing services in the form of coding to major Western clients. IT exports, which account for around 10 per cent of the total services exports, are currently estimated close to $3 billion annually. The figure is based on estimate as the county IT exports are not properly maintained under the export head.
Pakistan launched high-speed mobile internet services 3G and 4G in 2014 and it helped increase the mobile broadband users significantly over the last two years.
Pakistan is also a leading country in mobile banking services but fear of erosion in foreign exchange reserves is holding the introduction of ecommerce in the country.
