Growth of E-Wallets adoption in Pakistan

Abstract

This project will discuss the adoption of e-wallets in Pakistan based on secondary data 2018-2025, and the aim of the study is to determine the essential factors of the acceptance of e-wallets, and the evaluation of growth trends in the digital payment sector. The study is based on the known theoretical frameworks, such as the Technology Acceptance Model (TAM) and the digital financial inclusion theory. The reliable sources of data were the State Bank of Pakistan (SBP), Karandaaz Pakistan, Pakistan Telecommunication Authority (PTA) and industry publications. The results show that the use of e-wallets has a fast growing trend in Pakistan. The number of active wallet users grew over the small base in 2018 to approximately 60 million users by 2024 and subsequently, it enhanced to more than 68 million users in Q3 FY25. Retail transactions are currently comprised of 88-90 percent digital payment channels as a resounding change to the cash payment system. The use of financial analysis tools such as the year-on-year growth and compound annual growth rate demonstrates that the company has been able to achieve a consistent growth of over 10 percent, which indicates the high dynamics behind the adoption of digital wallets. The paper determines that there are a number of essential drivers of this development. The key determinants became perceived usefulness and ease of use, as users are progressively using e-wallets to pay, transfer and make transactions with merchants due to convenience and efficiency. SBP regulatory frameworks and cybersecurity have ensured user trust and security based on perceived security. Moreover, making smartphones and internet more accessible, creating more awareness by advertising, and incentives like waived fees and cashbacks have also been encouraging adoption. To sum up, the use of e-wallets in Pakistan is a phenomenon of conglomeration of technology, regulation, and behavior. The research offers useful lessons to the policymakers, regulators and fintech providers to enhance digital payment systems, advance financial inclusion, and ensure sustainable development in the fintech industry.