Pakistan’s economy remains cash-intensive, with a significant share of transactions still conducted through physical currency and traditional channels. However, momentum toward digital payments is strengthening. In the first quarter of FY26, retail payment volumes increased by 10 % to approximately 2.8 billion transactions, with the total value reaching PKR 166 trillion. Digital channels accounted for around 90% of all retail transactions by volume, highlighting the continued shift toward electronic payment methods.

This growing momentum shows that Pakistan is steadily moving toward a more cashless economy. Mainstreaming digital payments as a part of everyday life requires thoughtful engagement, trust-building, and lasting behavioral change.

Incentives as Catalysts for Change

Incentives, whether in the form of cashback, discounts, or loyalty rewards, have proven to be effective catalysts in encouraging first-time users to go digital. Karandaaz’s consumer incentive programs have shown that well-structured campaigns can bridge access and behavior, helping consumers move from curiosity to consistent digital use The various incentive schemes implemented by Karandaaz resulted in reach and activation of over 450,000 customers, turning initial curiosity into sustained digital usage across priority use cases.

Karandaaz led incentive schemes spanned diverse sectors, ranging from quick commerce and education to agriculture and retail, each offering valuable insights on how to nudge users through the different stages of digital payment adoption.

From Awareness to Loyalty: The Five Stages of Digital Adoption

A consumer’s journey towards adopting digital payments passes through 5 key stages depicted below. These stages identify opportunities for targeted interventions, as demonstrated by successful campaigns around the world.

 

Designing for Impact: What Works

Across multiple campaigns, key insights emerged that can inform the next wave of Pakistan’s digital transformation:

• Precision Targeting: Data analytics, AI, and predictive modeling help identify high-potential users and tailor incentives to their needs, making outreach more efficient and impactful.
• Localized and Phygital Approach: Approaches that pair on-ground engagement with digital outreach and deliver messages in regional languages through trusted local channels are likely to resonate far more deeply than broad, generic campaigns especially in segments with low literacy levels such as agri farmers.
• Financial Literacy Integration: Short, engaging educational content- micro-guides, voice prompts, or gamified tutorials help users build confidence and sustain engagement.
• Digital Account Integration: Seamless linkage with mobile wallets and digital accounts ensures accessibility and inclusivity, especially for users new to formal banking.
• Retention by Design: Reward systems, loyalty programs, and ongoing engagement loops keep users motivated well beyond the first transaction.

From First Tap to Everyday Habit: Designing Pakistan’s Digital Future

Encouragingly, Pakistan’s digital financial services ecosystem is progressing from experimentation to everyday use. The collective learnings from Karandaaz’s incentive experiences show that incentives can ignite change, but personalization, trust, and continuity sustain it.

The future of digital payments lies in precision, not just promotion. When users are engaged through data-driven insights, empowered through digital literacy, and rewarded through meaningful experiences, they are far more likely to embrace digital financial services.

By embedding these principles across every stage of the consumer journey, from awareness to loyalty, Pakistan can fast-track its progress toward a cashless, inclusive, and resilient digital economy that empowers every citizen and business alike.