Cross-Border Payment Gaps Cost Pakistan $1.6 Billion Annually

Pakistan’s growing e-commerce sector is losing an estimated $1.61 billion annually due to inefficiencies in cross-border payments, with most losses occurring at the checkout stage, according to a new report by Payoneer.

The findings, shared in a white paper, show that these losses are part of a wider $72 billion gap across Asia, highlighting structural challenges in digital payments that are limiting revenue potential for businesses operating internationally.

The report identified cart abandonment as the largest contributor, accounting for $0.97 billion of the total losses, or more than 60 percent. It said many transactions fail to convert into completed sales due to payment friction, unexpected charges, and lack of localized payment options at checkout.

Settlement delays were identified as the second major factor, causing losses of $0.46 billion annually. Slow payment cycles and layered financial systems are affecting cash flow and putting pressure on merchant margins, particularly for businesses relying on cross border transactions.

An additional $0.18 billion in losses stems from foreign exchange costs and other payment-related charges, further reducing profitability for exporters and online sellers. These combined factors are preventing businesses from fully benefiting from strong demand in global e-commerce markets.

The report said that improving payment systems is critical to unlocking growth in Pakistan’s digital economy. It emphasized the need for faster settlement processes, streamlined payment flows, and localized checkout experiences to reduce transaction friction and improve conversion rates.