In a significant development, the State Bank of Pakistan (SBP) has granted regulatory approval to the foreign fintech company OPay to acquire the payment operations of local fintech firm Finja. This move underscores the evolving landscape of digital financial services in Pakistan.
Finja, one of the four operators licensed to conduct business in e-money wallets for both customers and merchants in designated areas of Pakistan, had received its commercial license from the banking regulator in 2021. In addition to its payment operations, Finja had also ventured into the lending business, primarily serving grocery store owners, under the management of its previous owners.
The incoming player, OPay, is a comprehensive mobile-based platform offering a range of financial services, including payments, transfers, loans, savings, and more, catering to individual users. OPay was founded by Opera Norway AS Group and has established a presence in emerging markets across Asia, Africa, and Latin America.
The digital financial services landscape in Pakistan’s EMI (Electronic Money Institution) sector has seen somewhat lukewarm growth due to the absence of an enabling environment for digital payments. Fierce competition among fintech operators, coupled with the digital banking services offered by commercial banks, has contributed to market saturation.
In 2023, two fintech operators, Checkout and Careem Payment Solutions, withdrew their licenses from the central bank, reflecting the challenges and dynamics of the digital finance sector. Several other fintech operators are reportedly considering similar moves, including license withdrawals or exploring mergers and acquisitions with banks or fellow fintech firms.
This development highlights the ongoing transformation and innovation within Pakistan’s digital financial services sector, as foreign players like OPay enter the market to expand their footprint and offer a wider array of services to tech-savvy consumers.