IdeafintechPakistan
A rewards and acceptance layer to fix PayPak’s usage problem
PayPak is on 25% of Pakistan’s cards and carries 6% of the spending. That gap is a business.
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The problem
Pakistan’s domestic card scheme has scale in issuance and almost none in usage. Millions of PayPak cards are issued with basic and salary accounts and then used only at ATMs, because there is no reason to prefer them at a till and no benefit to doing so.
The solution
A rewards and merchant-offer layer that makes paying with PayPak measurably better than the alternative — funded by the interchange saving banks and merchants make by staying off international schemes.
Who it's for
Banks issuing PayPak cards, and merchants who would rather not pay international scheme fees on domestic transactions.
The market
More than 13 million PayPak cards in issue, on a base of 53 million debit cards, with about 6% of card usage.
How it makes money
Share of the interchange saving, plus merchant-funded offer placement.
More detail
Two numbers define Pakistan's domestic card scheme. PayPak is on more than 25% of the country's 53 million debit cards, and it carries about 6% of card usage. ## Why the gap exists PayPak cards are cheap for banks to issue, so they go on the thinnest-margin products: basic accounts, salary accounts, financial-inclusion products. They cannot be used abroad or on most international sites, so anyone with a second card uses the other one, and anyone without simply uses theirs at an ATM, exactly as they used the card it replaced. The scheme has a usage problem, not an issuance problem. 1LINK's August 2026 proposal to mandate PayPak for government salaries and subsidies would add more cards to a pile of cards that are already not being used. ## The business Give people a reason to tap the domestic card. The money to fund that reason already exists: every domestic transaction routed over PayPak rather than an international scheme saves fees, in foreign currency. Today that saving is diffuse and nobody converts it into consumer behaviour. A rewards layer does exactly that — cashback, merchant offers, instalments once the domestic credit card ships — funded by the saving it creates. ## Why this is better than the mandate Compulsion produces cards. It does not produce preference, and it applies the pressure to the people with the least ability to refuse — including recipients of subsidy and social safety-net payments. A scheme that wins because paying with it is better is a scheme that keeps its volume when the mandate is lifted. ## The timing 1LINK has said it intends to launch a PayPak credit card later in 2026. Credit is where card rewards economics actually work. A rewards layer built for debit and ready for credit is well placed if that lands.
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