NayaPay raises $13 million for a digital payments revolution in Pakistan
Danish entrepreneur Lakhani has spent much of the past 15 years building one of Pakistan’s largest fiber optic broadband providers – but in a role that saw him travel frequently to China, he has increasingly felt that there was a greater business opportunity to explore. Today, NayaPay, the fintech platform he launched to support that vision, raised $13 million in one of the largest fundraising rounds ever in South Asia.
NayaPay is a two-sided payment platform. It offers consumers a way to make a wide range of smartphone payments, as well as providing them with a debit card. And it gives small businesses a way to accept digital payments, whether online or at the point of sale.
“During my time in China, I saw how services like WeChat and AliPay evolved,” Lahani says. “But in Pakistan, there is nothing like it, even though it is a very underbanked country.”
In effect. For many people – both consumers and businesses – Pakistan remains a cash economy. Some 50 million adults are unbanked – supporting a quarter of the population – and some groups are particularly underserved. For example, only a third of Pakistani women have a bank account. Students and the self-employed are also systematically ignored by the banking sector.
Among small businesses, Lakhani points out that 90% of Pakistani businesses deal almost entirely in cash. The country has only 60,000 point-of-sale terminals allowing customers to pay by card in person. Online banking penetration rates are very low.
Against this background, Lakhani saw an opportunity to build a profitable new business that would cope with this exclusion. “We empower young adults in Pakistan to kick-start their financial journey, from students entering adulthood to freelancers and entrepreneurs who take an active role in managing their finances,” he says. “Our tools are intended to give business owners visibility into their cash flow, pay suppliers and increase sales; our goal is to allow them to focus on growth while we take care of the rest.
The first stage of NayaPay’s launch is nearing completion, with 50,000 consumers already using a beta version of the app the company launched last year. Via a NayaPay wallet on their phone, they can pay bills, manage their finances, and pay in stores that accept the technology. The app is chat-based, in the style of WeChat and similar services, and consumers also receive a Visa debit card that they can use for payments.
The second stage of the launch over the next few months will see NayaPay focus on the other side of the transaction, with the rollout of its small business services. The company promises a universal payment acceptance platform, allowing small business owners to accept payments however they see fit, whether in person or online.
Lakhani says that in addition to solving a practical problem with digital payments, NayaPay will bring wider benefits, giving consumers and small businesses more control over their finances. Rather than having to negotiate in cash, they will be able to review and manage their finances on screen. Over time, the platform plans to introduce a series of tools to help with this.
The long-term ambition is for NayaPay to become a “super-app” for the financial needs of Pakistanis. Lakahni hopes to be able to offer savings, investment and loan services, especially as data flows about users and provides a way to understand their needs and circumstances. It also plans to host other vendors’ apps on NayaPay, expanding the range of services offered by the platform. “Our goal is to keep innovating and developing features to become part of people’s daily lives, for the rest of their lives,” he says.
This vision has excited investors. The funding round announced today is led by Zayn Capital, global fund manager MSA Novo and early-stage venture capitalist Graph Ventures. Singapore-based Saison Capital, Waleed Saigol’s Maple Leaf Capital and Empower Finance CEO Warren Hogarth also participated in the round, alongside sponsors Lakson Group – a Pakistani conglomerate with interests in media, telecommunications, industry and financial services.
Lakhani plans to deploy the money to support customer acquisition and support, as NayaPay works towards its goal of onboarding 5 million consumers and businesses. The funding will also help the company accelerate the rollout of its small business proposition – and build a machine learning team as NayaPay focuses on analytics to help it introduce new services.