State Bank of Pakistan has granted Safepay pilot approval as a Payment Service Provider (PSP).
PSPs explained: Payment System Operators (PSOs) and Payment Service Providers (PSPs) provide a platform for clearing, processing, routing, and switching electronic transactions.
The State Bank of Pakistan regulates it. And there are three stages of approval:
- In principle
Safepay received ‘in principle’ approval from SBP in June 2021.
Tell me more: Think of Safepay as Stripe for Pakistan.
Merchants are charged a flat 2.5% fee per transaction without any upfront or recurring fees.
The scope of ‘in principle’ approval is quite limited.
With pilot approval, Safepay can onboard merchants without initial scale restrictions. And that’s what it intends to do now. Grow.
You should know: Safepay was founded in 2019 by Raza Naqvi and Ziyad Parekh.
In 2020, it graduated from YC’s summer 2020 batch and raised $150,000 in seed funding.
Later, it went on to raise an undisclosed amount of seed funding from Stripe, Global Founders Capital, HOF Capital, Soma Capital, Mantis Venture Capital, and Fatima Gobi Ventures.
Big picture: To get approval for the pilot program, Safepay had to wait 14 months.
It is challenging to start a fintech startup in Pakistan, but the payoff can be huge in the long run.
At least in Pakistan, Safepay is well-positioned to increase the “GDP of the internet.”