How dollar shortage handed EMIs 'advantage' over banks - DAWN.com

KARACHI: For Pakistanis, there are many faults in our banks — unnecessary documentation for basic procedures like account opening, inordinate disruptions in digital services, arcane regimes to stifle business growth and lack of appetite to facilitate users, to name but a few.
Apparently, there is an addition to the list: exorbitant exchange rates on foreign transactions.
And as happens in times of volatility, the gap between interbank and open-market dollar rates — which is usually small — significantly widened amid high demand for the US currency. Commercial banks, insisting that they have to buy dollars from the open market to settle international payments, started charging rates that were way higher than the interbank rate.
Meanwhile, Electronic Money Institutions or EMIs — digital wallets of sorts that allow peer-to-peer transactions, top-ups and bill payments — somehow managed to offer exchange rates lower than banks.
A case in point is Ahmad Saeed, who made two foreign transactions on Jan 11, one through his bank account and another through his SadaPay wallet, which comes with a digital debit card.
Customers getting better USD-PKR exchange rate with digital wallets
On the $3.50 transaction through his bank, he was charged Rs256.5 a dollar, in addition to Rs35.91 foreign transaction fee (4pc of the total amount), Rs8.98 advanced tax, and Rs4.67 federal excise duty (FED).
In contrast, for a transaction of $4.23 on the same platform, SadaPay charged Rs255.4 per dollar,...



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