Central bank says lack of global payment platforms limits growth potential of Pakistan’s booming gig economy
The State Bank of Pakistan has acknowledged that the absence of widely used international payment platforms, particularly PayPal, continues to create major financial and operational hurdles for Pakistani freelancers.
In its latest assessment of Pakistan’s freelancing ecosystem, the central bank said payment frictions remain one of the biggest structural constraints facing the country’s rapidly expanding digital services sector.
Freelancers face limited payment options
According to the SBP, global payment services such as Payoneer, Wise, Xoom, and Skrill currently operate in Pakistan and can be connected with local bank accounts and mobile wallets.
However, the absence of PayPal and some other internationally recognized payment platforms continues to restrict payment choices for freelancers.
“As a result, Pakistani freelancers face greater transaction challenges, including fewer reliable payment channels, higher costs, and reduced flexibility compared to their counterparts in many other countries,” the report stated.
Pakistan freelancing sector grows rapidly
The SBP described freelancing and the broader gig economy as one of the fastest-growing segments of global trade in services, driven by remote work adoption, digital platforms, and growing international demand for cost-competitive digital skills.
Pakistan has emerged as one of the leading suppliers of freelance services globally, with freelance earnings reaching approximately $985 million in FY25 — nearly triple the level recorded three years earlier.
When combined with broader IT and IT-enabled services (ITeS), Pakistan’s digital exports exceeded $3.8 billion in FY25, underlining the sector’s growing importance as a source of foreign exchange earnings.
The central bank noted that freelancers are predominantly young, with nearly 60% under the age of 30, making the sector a critical avenue for employment generation and financial inclusion.
Income growth linked to higher-value skills
According to a recent survey cited by the SBP, an average Pakistani freelancer earns around $5,000 annually.
The report noted that income growth opportunities depend heavily on moving into specialized, knowledge-intensive freelancing categories rather than remaining concentrated in low-to-mid value services.
The SBP warned that many Pakistani freelancers still operate in routine digital services, while high-value areas such as advanced data analytics, web development, AI-assisted services, and product consulting remain underdeveloped.
AI poses risks for routine digital work
The report also highlighted the growing impact of generative artificial intelligence on global freelancing markets.
The SBP warned that freelancers engaged in repetitive digital tasks may face increased competition and automation risks in the coming years.
“This underscores the urgency of upgrading skills toward AI-complementary, knowledge-intensive services,” the report noted.
Government and banking sector initiatives
The central bank highlighted several initiatives aimed at improving payment integration and financial access for freelancers.
Habib Bank Limited introduced a dedicated Freelancer Digital Current Account to address payment challenges faced by digital workers.
Similarly, SadaPay launched SadaBiz accounts in 2023, enabling freelancers to receive Apple Pay and Google Pay-linked payments.
On the skills development side, the government’s DigiSkills.pk program has delivered over 4.5 million online trainings in areas including digital marketing, graphic design, animation, and content creation.
The Ministry of IT and Telecommunication has also launched the National Freelancing Training Program (NFTP), targeting the training of more than 22,000 youth in high-demand digital skills.
SBP introduces foreign exchange incentives
To encourage digital exports, the SBP has allowed software exporters and freelancers to retain up to 50% of their net foreign exchange earnings in foreign currency accounts for international payments.
The central bank has also simplified export realization procedures by removing the requirement for freelancers and IT companies to submit Form “R” for every export transaction, replacing it with a one-time declaration process.
Structural challenges continue to hinder growth
Despite supportive initiatives, the SBP said Pakistan’s freelancing ecosystem still faces major structural constraints.
These include:
• Limited access to global payment systems
• Skills gaps in high-value services
• Poor internet connectivity and electricity outages
• Limited device ownership
• Regulatory and taxation uncertainties
The report noted that many freelancers remain confused about tax classifications, as earnings may be treated differently as export proceeds, business income, or personal remittances.
Only freelancers registered with the Pakistan Software Export Board currently qualify for concessional export tax rates and tax credits.
Need for coordinated ecosystem reforms
The SBP stressed that Pakistan lacks a formal and consistent coordination mechanism among stakeholders to address challenges facing freelancers at the local level.
According to the report, improving payment infrastructure, enhancing digital skills, strengthening broadband access, and creating clearer tax regulations could help freelancers move into higher-value segments and contribute more significantly to long-term economic growth.