The Promise of Technology in Digitizing SME B2B Payments in Pakistan
Februray, 11, 2025
In Pakistan, Small and Medium Enterprises (SMEs) play a pivotal role in the economy, contributing significantly to GDP and employing a large portion of the workforce. Despite their importance, SMEs face numerous barriers that hinder their growth, particularly in managing finances. Most SMEs still rely on cash-based transactions, which limits their ability to access formal financial services and track business expenses efficiently. However, the digitization of B2B payments offers a powerful solution to these challenges, enabling SMEs to streamline financial operations and unlock greater access to credit and markets.
A significant portion of SMEs in Pakistan operate within the informal sector, where cash transactions dominate. This setup presents barriers to growth, as it limits the creation of verifiable transaction histories and complicates access to financing. With over $121 billion in SME B2B activity, shifting these payments to digital platforms can unlock immense potential. Digital transactions can improve cash flow management, provide businesses with better financial visibility, and foster an environment for growth and expansion. This shift can not only boost business outcomes but also contribute to broader economic development and increased export capacity.
The adoption of new digital technologies plays a vital role in transforming SME B2B payments. These technologies offer significant advantages over traditional cash-based methods, such as
These advancements help address challenges such as low liquidity, manual financial processes, and lack of transaction visibility. By leveraging modern technology, SMEs can streamline their operations, improve their financial management, and position themselves for long-term growth.
Despite the clear benefits, the adoption of commercial cards among SMEs in Pakistan remains limited. Commercial card payments accounted for only 1% of total card spend in 2022. Key barriers to adoption include:
Additionally, many SMEs use personal debit or credit cards for business transactions, which not only violates regulatory guidelines but also creates inefficiencies in financial management.
To overcome these challenges and accelerate the adoption of commercial cards, key stakeholders should take the following actions:
Digitizing B2B payments through the use of commercial cards represents a game-changing opportunity for SMEs in Pakistan. By addressing critical barriers such as reliance on cash, limited access to credit, and operational inefficiencies, SMEs can optimize their financial management and position themselves for sustainable growth. Successful adoption of commercial cards will not only benefit individual businesses but also contribute to the broader economic development of the country. It will require collaboration among policymakers, financial institutions, and fintech companies to build a conducive ecosystem that supports SME growth through digital transformation.
Digitizing B2B payments offers SMEs in Pakistan the opportunity to improve financial management, cash flow, and access to funding. Servixon Aerius, supports this transition by providing modular payment tools, ensuring smooth integration and scalability. With Aerius, SMEs can streamline operations and enhance growth, contributing to a more efficient and competitive economy.
