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Cash is the enemy, Visa country manager, Amir Pasha

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Highlights - Corporate News

For most people, there are few sights as enticing as a wad of cash.

But for VISA country manager for Pakistan and Afghanistan, Amir Pasha; "cash is the enemy".

And given the appalling level of financial inclusion in the country, cash is a formidable opponent for the world renowned electronic payments system.

VISA has played a key catalyst role in popularizing the use of plastic for payments and transfers.

The company launched its first credit card in Pakistan with Citibank back in 2006.

Since that time, the company has developed partnerships with 22 banks in the country.

Mobile Banking Enabler In July 2011, Visa bought the mobile money pioneer, Fundamo.

The company is currently providing services to Telenor and MCB while two other banks are expected to launch operations soon, using the platform provided by VISA.

After this acquisition, VISA is even better placed to facilitate the proliferation of mobile banking in the country.

"For example we can provide cards to all EasyPaisa customers which would be a supplemental service to their existing offering", explains Pasha.The company is hopeful about "accelerated adoption of mobile wallets through the mid-market", because of the ease of use and safety compared to the use of cash for completing transactions.

Highlighting the vibrancy and importance of the mid-market, Amir Pasha states that "the middle market drives the economy.

It needs liquidity and if the banks don't provide this liquidity, they will find it elsewhere".

"Right now the branchless banking is basically cash-in, cash-out.

You get a PIN number from the agent after depositing cash, so it is basically a domestic remittance framework" says Pasha.VISA worked with NADRA and other organisations in 2009 and 2010.

Fund transferred to the survivors of the floods as well as to internally displaced persons, driven from their homes during military operations in restive areas of the north-west region of the country; were made using Visa.

"Customers have to be made aware of the use of VISA cards for P2P payments such as utility bills," he says.

Pushing for Plastic The company is no stranger to facilitating the transfer of funds electronically.

In fact, about half of all cyber transactions are conducted through VISA.

But in Pakistan, the company faces a challenge that may be considered quite unique compared to advanced economies.Out of a population of about 180 million people, "there are about eight million Visa cardholders in the country" says Pasha, highlighting that there is still a huge potential of untapped clients in the country.

But just getting the plastic cards into people's wallets is only half the challenge."Less than 10 percent of all cardholders are using them at point-of-sales terminals.

Most people go to an automated teller machine (ATM) and get cash out in order to execute any transactions" reveals the country manager.

Amir Pasha adds that there are many factors contributing to such behavior of clients.

"Ignorance, fear of financial systems and processes as well as limitations of infrastructure are all contributing factors behind the relatively low usage of cards in the country" he says adding that, "at the end of the day it is all about creating awareness among the people".

Facilitating Infrastructure Although creating awareness among existing and potential clientele is the primary focus for VISA in Pakistan, the company is also taking on other hurdles to growth.

"A GPRS enabled POS mobile machine currently costs about $300-400.

So although a lot of banks do use these machines, their placement is generally limited to locations that enjoy heavy customer traffic" explains Pasha.

He reveals that VISA is working on bringing down this cost to about $100, which would strengthen the case for banks to place more POS mobile machines throughout the country.Banks in the country are also wary of internet banking, given security risks.

VISA not only provides fraud and risk mitigation tools to these banks, it is also working on developing more options for banks to be able to better harness the power of the internet.Questioned over the boom and bust of consumer financing in the country, Amir Pasha points out that "ECIB has all banks' data and it was always up to the banks to effectively use this data instead of dishing out credit in frenzy".

The Case for Documentation The country manager reminds that the documentation of the economy is vitally important for myriad reasons.

'By going electronic we can document the economy, help boost the national income, enable efficient cash management, provide better security for customers and their transactions as well as make the process a lot easier too" says Pasha, extolling the virtues of electronic payment systems."The next stop is getting people to transfer directly from mobile to mobile, instead of the current prevalent practice of going through an agent" says Amir Pasha.

He acknowledges that "most customers are financially illiterate so a lot of effort is needed to raise awareness regarding the use of VISA as an alternative to cash.

"We are working with the banks as well as with media to disseminate accurate information that can help users and prospective users make more informed choices, going forward".He adds that the company "is committed to maintaining and enhancing stakeholder trust in VISA as the most secure way to pay and be paid".

The introduction of chip cards, SMS pass codes and other tactics are all aimed at enhancing security.

Similarly, VISA is also capable of flagging risky transactions in real time and passing this information to the relevant bank instantaneously.

Courtesy: Business Recorder

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