$1.6bn drained through cross-border payments

KARACHI: Pakistan’s expanding e-commerce sector is losing an estimated $1.61 billion each year at the checkout stage because of inefficiencies in cross-border payments, according to a new white paper by Payoneer.

These losses are part of a broader $72 billion gap across Asia. It identified three main sources of the annual losses in Pakistan: $0.97bn linked to cart abandonment, $0.46bn caused by settlement delays, and $0.18bn stemming from foreign exchange and other payment-related costs.

Despite strong demand, a significant number of transactions do not convert into completed sales because of payment friction, unexpected charges and slow settlement timelines. These issues are constraining revenue generation for businesses operating in the cross-border digital marketplace.

Cart abandonment makes up more than 60 per cent of the total losses. This is happening as international buyers increasingly expect localised payment methods and clear pricing at checkout.

Layered payment systems and lengthy settlement cycles are putting pressure on merchant margins while also limiting cash flow. These structural issues are affecting the ability of businesses to fully benefit from growing cross-border e-commerce demand.

Key areas of loss

The estimated annual losses are broken down into three categories. The largest share, at $0.97bn, comes from customers abandoning purchases before completing payment. Another $0.46bn is attributed to delays in settlement, while $0.18bn is linked to foreign exchange charges and other payment-related expenses.

The figures highlight how payment bottlenecks can affect businesses even when consumer demand remains strong. Failed conversions at checkout, added costs and delayed access to funds are collectively reducing earnings for merchants.

Recommendations highlighted in the report

The findings underscore the need for more efficient payment systems in order to support growth in Pakistan’s cross-border digital economy. It pointed to the importance of streamlined payment flows, localised checkout experiences and faster settlement processes.

Addressing these issues could help businesses reduce friction during transactions, improve conversion rates and ease pressure on margins and cash flow. These changes are necessary steps to unlock further growth in the sector.

The report was released as Pakistan’s e-commerce market continues to grow, with payment processing and settlement efficiency emerging as key factors in cross-border sales performance.