How to Choose a Payment Gateway for Your Pakistani Store

The short answer

If you sell online in Pakistan, start with three options at checkout: cash on delivery, one mobile wallet, and debit or credit card payments. That combination covers most buyers without making your checkout look like a form with too many choices. Add bank transfer only if your average order is large enough that customers expect it.

Most store owners pick a gateway the wrong way round. They compare headline fee percentages first and ask about settlement, refunds, and failed payments later, usually after something has already gone wrong. This post flips that order. It covers the payment methods your customers actually use, the seven questions worth asking any provider, and a simple comparison method you can run in an afternoon.

What a payment gateway actually does

A payment gateway is the part of your checkout that moves money safely from your customer to you. When a customer pays by card or wallet, the gateway checks the payment, confirms it with the bank or wallet provider, and tells your store the order is paid. Your store then releases the order for packing and delivery.

Cash on delivery is different. No gateway is involved at checkout. Your courier collects the money, takes a cut or a fee, and remits the rest to you days later. That is why COD feels free at checkout but still costs you money, and why it carries its own risk: refused parcels and return shipping.

One point founders often miss: the gateway is not your store, your bank account, or your courier. It sits between them. If a payment fails, a refund stalls, or a settlement is late, the fix usually lives in that middle layer, so the provider you pick matters more than the button design on your checkout page.

The payment methods your customers actually use

Cash on delivery

COD is still the default for a large share of Pakistani online shoppers, especially first time buyers. It removes the trust problem completely. The customer pays only when the parcel arrives.

The trade off is real. Refusal rates are higher than prepaid orders, because nothing was paid up front. Returned parcels cost you two way shipping. And your cash flow lags, since courier remittance takes days. COD is a trust tool, not a business model. Use it to win first orders, then earn prepaid payment on the second order with good service.

JazzCash and Easypaisa

Mobile wallets are the second pillar. Many customers keep money in JazzCash or Easypaisa and prefer paying from a wallet app they already use over typing card details into a new store. Wallet checkout also works well on mobile data, which is where most Pakistani shopping happens.

Ask any provider how wallet payments appear in your dashboard. You want to reconcile a wallet payment to an order in seconds, not by matching screenshots at the end of the week. If the provider cannot show you a clean settlement report, that is a warning sign.

Debit and credit cards

Cards matter most for higher value orders and for customers who already shop online regularly. A store that only accepts COD looks small to this group. A store that accepts cards looks established.

Card payments bring two extra jobs: fraud checks and chargebacks. A customer can dispute a card payment through their bank, and the provider will ask you for proof of delivery. Keep your delivery proof, tracking numbers, and customer messages in one place from day one. It takes minutes now and saves a lost dispute later.

Bank transfer and Raast

Bank transfer suits expensive items, wholesale orders, and business buyers. It is cheap but slow, and it creates manual work: matching transfers to orders, chasing screenshots, and confirming receipt before dispatch. Offer it as a secondary option, not the main checkout path, unless your customers already expect it.

Raast is worth asking your provider about separately. It is the bank based instant payment system, and some providers support merchant payments through it, including QR codes and payment requests. A customer sending you money manually and sharing a screenshot is not the same as an integrated Raast checkout payment with proper order matching, so ask exactly which Raast merchant option the provider supports and what it charges on the merchant side.

Seven questions to ask before you sign up

What does a completed order actually cost you?

Do not compare one percentage number. Ask for the full picture: the transaction fee, any fixed fee per transaction, any monthly fee, and the courier's COD fee and remittance charges where they apply. Then work out the cost on your real average order value, not on a round number from a sales page. A gateway that looks cheap at Rs 5,000 orders can look expensive at Rs 800 orders if it charges a fixed fee per transaction. Fees change, so confirm the current schedule in writing before you commit.

When does the money reach your account?

Settlement time is cash flow. Some providers settle next day, some take several working days, and wallet and card settlements can run on different cycles. Ask for the exact cycle for each payment method, and what happens over weekends and public holidays. A store running ads daily cannot wait a week to see its money.

How hard is setup, really?

Setup usually needs your business details, a bank account in the business name or your name, and some verification documents. Depending on the provider, you may be asked for a CNIC, an NTN, business registration papers, and proof of address, so ask for the full document checklist up front instead of discovering a missing paper halfway through. Ask what documents are needed, how long verification takes, and whether you get a sandbox test account first. A provider that lets you test before going live is telling you something good about its own product.

How do refunds work?

Every store refunds sometimes. Ask how a refund is started, how long it takes, and whether the transaction fee is returned. Then write your refund policy in plain Urdu and English on your site before launch, not after your first angry message. Customers accept a clear policy. They do not accept silence.

What stops fraud?

Ask what fraud checks run by default: one time passwords, velocity checks on repeated attempts, and flags for suspicious orders. Then ask what you control yourself, like holding high value first orders for a confirmation call. No system stops all fraud. The honest providers say so and show you their controls.

What does the customer see when a payment fails?

Failed payments are normal. Cards expire, wallets run low, and mobile signals drop mid payment. Ask whether the customer gets a clear retry option and whether a failed payment still creates a confusing order in your dashboard. Test this yourself before launch with a failed payment on purpose. It is one of the first things we test on every store, because a failed payment that looks like a successful order creates a support ticket every single time.

Who answers when something breaks?

Support quality shows up at the worst moment, usually during a sale. Ask for the support channel, the hours, and the response time for payment issues. A provider with only a ticket form and no phone or chat option will feel very far away when your checkout stops working on a Friday night.

What about Raast and selling abroad?

Raast and international payments deserve their own questions, because both are easy to assume and awkward to fix later. For Raast, ask your provider which merchant option it actually supports and how settlement and charges work on your side. For international orders, check separately whether the provider supports internationally issued cards, which currencies it settles in, and how refunds and chargebacks work across borders.

Two cautions belong here. First, do not build your plan around Stripe or PayPal without checking current eligibility for a Pakistan based business, because neither offers straightforward direct merchant onboarding here, and opening an account through another country raises legal, tax, and banking requirements of its own. Second, a gateway that supports many international methods is not automatically better for a domestic store. Match the provider to the customers you actually have, then add international coverage when overseas orders are real, not hypothetical.

A simple way to compare two gateways

Pick your two finalists and score them on one page. Use your own numbers, not the provider's marketing examples.

1. Write down your average order value and your expected monthly order count.

2. For each provider, list the transaction fee, fixed fee, monthly fee, and settlement time for each payment method you will offer.

3. Work out the monthly cost on your numbers, including COD remittance costs if you keep COD.

4. Add a row for setup effort: documents needed, verification time, and whether sandbox testing is included.

5. Add a row for control: refund process, fraud tools, and support hours.

The cheapest provider on row 3 is not always the winner. A provider that settles two days faster, or whose support answers in an hour instead of a day, is often worth a slightly higher fee. Choose the provider you can run a business on, not the one with the prettiest pricing page.

How we set this up for clients

When aimEncoders builds an online store, payment setup is part of the build, not an afterthought bolted on at the end. The pattern is the same on every project, and it is worth copying even if you build your own store.

First, we agree the payment mix with the owner: COD, one wallet, and cards at launch, with bank transfer added only if the product range needs it. Second, we connect the provider in sandbox mode and run test orders for every path: a successful card payment, a successful wallet payment, a failed payment, a refund, and a COD order. Third, we test checkout on a real phone over mobile data, not just on office wifi, because that is how the customer will pay. Fourth, we check the settlement report against the test orders, so the owner can reconcile money to orders from week one.

That test pass catches the problems that cost real money: a wallet payment that marks the order as unpaid, a refund button nobody can find, a checkout that breaks when the customer switches apps to approve a wallet payment and comes back. One rule matters more than the rest: mark an order as paid only after the provider confirms it through its own callback or verification check, never from the success page the customer sees or from a payment screenshot. Finding those problems in testing costs an afternoon. Finding them from customer complaints costs sales.

If you are planning a store, the e-commerce stores we build follow this same checkout discipline, and we covered the other half of this problem, checkout mistakes that lose orders after the customer has already decided to buy, in an earlier post on our blog.

Mistakes we see again and again

The most common is offering only COD. It feels safe, but it caps your growth. Prepaid customers are repeat customers, and a store with no prepaid option trains its buyers to never pay in advance.

The second is hiding the payment step until the end. If a customer only learns at the last screen that you do not accept their wallet, they leave. Show accepted payment methods on the product page and in the cart, not just at checkout.

The third is launching without testing refunds. The first refund always arrives sooner than expected. If your team has never processed one, it takes days and the customer tells friends.

The fourth is ignoring the mobile checkout. If wallet approval forces the customer out of your site and the return trip breaks, you lose the sale and the customer blames your store, not the wallet app. Test the full round trip on a phone before you run a single ad to that checkout.

Frequently asked questions

Should a new store offer COD at all?

Yes, at launch. COD builds trust with first time buyers. Keep it, measure your refusal rate honestly, and push prepaid options with small incentives once customers trust you.

Is one gateway enough, or do I need two?

One good gateway is enough for most small stores. Two gateways add reconciliation work and two support relationships. Add a second only when one provider cannot cover a payment method your customers clearly want.

Do I need a registered business to get a gateway?

Most providers ask for business or identity documents and a bank account for settlement. The exact list varies by provider. Ask for it up front, so verification does not delay your launch by weeks.

Can I accept international payments from Pakistan?

International card acceptance depends on the provider and your bank arrangement, and neither Stripe nor PayPal offers straightforward direct merchant onboarding for Pakistan based businesses. If you plan to sell abroad, raise this in your first conversation with the provider, not after launch, and confirm supported currencies, settlement, and refund handling in writing.

What if my checkout breaks during a sale?

Pause the ads first, then switch to a fallback: a simple order form or WhatsApp ordering while you fix checkout. A store that keeps taking orders manually during an outage loses less than a store that shows a broken checkout for hours.

The bottom line

Choose the gateway your customers already trust, on terms your cash flow can live with, from a provider whose support answers when it matters. Start with COD, one wallet, and cards. Test every payment path before launch, including failures and refunds. And revisit the choice every six months, because your order value, volume, and customer mix will change as the store grows.

If you want help setting this up properly, Muhammad Asad Ullah is the founder of aimEncoders, a web development agency in Faisalabad that builds and QA tests e-commerce stores for Pakistani businesses, from checkout and payment setup to launch and maintenance.