Fintech startup NayaPay secures $13 million to start a digital payments revolution in Pakistan and assist the underbanked citizens and SMBs
Globally, about 1.7 billion adults remain unbanked — without an account at a financial institution or through a mobile money provider, according to data from the World Bank. A large portion of the underbanked is in developing countries.
China has the world’s largest unbanked population, followed by India (190 million), Pakistan (100 million), and Indonesia (95 million). Now, one fintech startup is on a mission to help the 100 million underbanked adults in Pakistan.
Enter NayaPay, a Pakistan fintech startup aiming to address the needs of underbanked citizens and Small and medium-sized businesses by enabling them to create accounts and start transacting within a few minutes. NayaPay is rolling out the digital payments revolution in Pakistan.
Today, NayaPay announced it has raised $13 million in one of the largest seed rounds in South Asia. Bringing together a diverse mix of leading global institutional and angel investors, the round was led by Zayn Capital, global fund manager MSA Novo and early-stage VC Graph Ventures from Silicon Valley.
Other backers include Singapore-based Saison Capital, Waleed Saigol’s Maple Leaf Capital, and Warren Hogarth, CEO of Empower Finance, alongside a major investment from the sponsors of the Lakson Group – a Pakistani conglomerate with interests in media, telecom, industrials, financial services as well as controlling stake in Colgate-Palmolive Pakistan and McDonald’s Pakistan.
NayaPay is the first fintech of its kind in Pakistan having recently secured the first E-Money Institution license from the central bank, State Bank of Pakistan. It is on a mission to make financial services simpler and accessible to millions of Pakistani users. NayaPay aims to be at the forefront in the digitization of Pakistan with its two-sided platform for the underbanked.
Pakistan presents a significant market opportunity for NayaPay, where over 50 million adults are unbanked and only 33% of women have a bank account. With 70% of the population under 35 years old, there is a significant mobile-first generation. Almost $4tn payments are made each year but only 1% of these are made digitally currently. On the merchant side, the majority of SMBs in Pakistan are unregistered, have traditionally dealt primarily in cash, and have very limited access to business banking.
The fintech has launched its chat-led super app targeted primarily at students and freelancers and is building a SaaS-based platform called NayaPay Arc offering universal payment acceptance and financial management tools for SMBs. NayaPay’s platform strategy will harness the network effects between consumers and merchants, as seen in platforms such as Square Cash/Square, WeChat Pay, AliPay, and Venmo in their native markets.
Founded by CEO Danish A. Lakhani, NayaPay has been in private beta building a community of early supporters for its consumer proposition– a chat-led super app accompanied by free Visa Virtual and physical cards. With NayaPay, any Pakistani citizen can open a NayaPay wallet on their smartphone in minutes and use the app to make everyday payments, send and receive money, split bills, and much more.
For merchants, NayaPay offers access to universal payments acceptance and powerful financial management tools with an easy-to-open business account and Visa card. NayaPay is authorized and regulated by the State Bank of Pakistan as an Electronic Money Institution.
In a statement, Lakhani said: “NayaPay is empowering young Pakistani adults starting their financial journey, from students stepping into adulthood to freelancers and entrepreneurs taking an active role in managing their finances. In many senses, it’s a coming-of-age moment for many and our goal is to continue to innovate and build functionality to become a part of their daily lives, for the rest of their lives.”
Danish A. Lakhani added “Micro, small and medium businesses make up 90% of the merchant-base in Pakistan, and yet they are underserved when it comes to access to basic financial services. NayaPay Arc will provide universal payments acceptance and a range of business financial management tools to empower entrepreneurs and small business owners. The tools are intended to give business owners visibility of their cash flows, pay suppliers and grow sales. Our goal is to enable them to focus on growth while we take care of the rest. By helping small businesses harness the power of technology, we believe we can transform the Pakistani economy.”
Faisal Aftab, Managing Partner and Co-Founder at Zayn Capital Frontier, said: “We are very bullish on fintech in Pakistan. While just beginning to emerge, Pakistani fintechs have the advantage of learning from peers and placing better informed strategic bets. We were impressed by the completeness of the vision of the founding team at NayaPay, and their differentiated platform-based strategy– first focused on servicing the needs of underbanked consumers and SMBs with specific use cases and building out from there. With a proven ability to execute on the ground, the founder has an impressive track record of building and scaling businesses in Pakistan, including the country’s largest fiber broadband service (StormFiber).”