Islamabad

Pakistan’s fast-growing e-commerce sector is losing an estimated $1.61 billion annually at the checkout stage, highlighting a major structural weakness in the country’s digital economy, according to a new report by Payoneer.

Billions Lost Despite Strong Demand

The findings show that while online shopping demand continues to rise, a significant portion of transactions fail to convert into completed purchases, leading to substantial revenue losses for businesses.

Across Asia, checkout inefficiencies are costing merchants around $72 billion annually, with Pakistan accounting for a notable share of the losses.

Cart Abandonment the Biggest Culprit

The report identifies cart abandonment as the leading cause, contributing nearly:

• $0.97 billion in losses

This accounts for over 60% of the total gap, driven by:

• Unexpected costs at checkout
• Payment failures
• Complex or unclear processes

Payment and FX Challenges

Other key factors include:

• $0.46 billion lost due to settlement delays
• $0.18 billion lost to foreign exchange and payment inefficiencies

Layered financial systems and multiple intermediaries further reduce margins, especially for businesses engaged in cross-border trade.

Cash Flow Pressures on Businesses

Delayed settlements are also restricting liquidity, with funds often stuck in processing cycles, making it harder for businesses to:

• Fulfil orders
• Manage operations
• Scale efficiently

Structural Gaps in Digital Economy

Experts say the issue reflects a broader gap between Pakistan’s growing digital commerce activity and its financial infrastructure.

While sellers are increasingly targeting global markets, payment systems have yet to fully adapt to support seamless cross-border transactions.

Path to Recovery

Industry analysts suggest that improving checkout performance will require:

• Simplified and localized payment options
• Transparent pricing in local currencies
• Faster and more predictable settlement systems
• Reduced reliance on multiple intermediaries

Unlocking Growth Potential

With Asia’s digital economy expanding rapidly, experts believe that addressing these inefficiencies could unlock billions in additional revenue, transforming lost opportunities into real growth for Pakistani exporters and online businesses.