PayPro began with three schools, and its price list shows where the margin sits

PayPro, the Pakistani payments company formerly called ConnectPay, went from 77 merchants to more than 1,700 between 2020 and the end of 2023, and the number of new merchants it added each year fell throughout. Both facts come from a case study that Karandaaz Pakistan published in September 2024, written by EY Ford Rhodes with two LUMS academics. Set against the tariff on PayPro's own pricing page, which carries a June 2026 modification date, the study shows how the company earns from a merchant, and where a customer's cheapest option is not the one the price list seems to suggest.

From ConnectPay to PayPro

ConnectPay had been a subsidiary of THK Solutions since 2018, selling banking software that included digital payment tools. In 2019 the businessman Aly Khan led its acquisition and renamed it PayPro; the study describes him as the primary investor. Ali Janjua, formerly a principal at Karandaaz with a banking background at Standard Chartered and Tameer Bank, became chief executive. By October 2019 Zain Ansar had joined as chief commercial officer.

The flagship product is bill aggregation. Banks move the money but could not give a school a record of which child's fee had arrived, so finance teams matched bank statements against fee lists by hand. PayPro issues the invoice, collects through bank channels and updates the record for each payer, which gives the merchant a live view of what is overdue and for how long. The study says PayPro earns through transaction fees, subscription fees for the platform and charges for extras such as analytics and custom reports.

The first three clients were schools: Froebels School, Bayview Academy and Haq Academy. The study says the choice reflected a decade of growth in private schooling, with most established names running several campuses across cities, which makes reconciling fee payments a large and repetitive job.

Counting the merchants

The study gives three counts: 77 merchants at the start, more than 1,300 in 2022 and more than 1,700 by the end of 2023. A chart labels the yearly growth at 992, 55 and 31 percent. The last matches the step from 1,300 to 1,700, which is 31 percent.

Working backwards from those rates gives an estimate of the path. If 2022 grew 55 percent to reach about 1,300, the base at the end of 2021 was about 840 (1,300 divided by 1.55). If 2021 grew 992 percent, the base a year earlier was 77 (840 divided by 10.92), the starting count the study gives. That implies roughly 760 net new merchants in 2021, 460 in 2022 and 400 in 2023. The falling percentages are partly arithmetic, since any base grows more slowly in percentage terms as it gets bigger. The absolute additions are the plainer test, and they show PayPro adding fewer merchants every year after 2021.

The study records that in 2022 the company scaled back marketing, lowered overheads and closed select offices, and that from 2023 it froze external hiring. It does not tie those decisions to the slowdown, and the arithmetic cannot. It also says the company had not yet reached break even and was working towards it by adding services such as microloans, insurance and investment products, and by holding monthly operating costs below Rs10 million.

What the tariff reveals

PayPro's pricing page lists packages in three tabs. The first, for card acceptance through its payment gateway, has three tiers. Basic costs Rs2,999 a month plus a 3.25 percent fee on each card payment, allows 500 transactions a month of up to Rs25,000 each, settles in 12 business days and asks for a Rs25,000 refundable deposit. Standard costs Rs9,999 a month with a 3 percent fee, 5,000 transactions, a Rs250,000 limit, settlement in six business days and a Rs50,000 deposit. Advanced costs Rs14,999 a month with a 2.75 percent fee, unlimited transactions, a Rs750,000 limit, settlement in four business days and a Rs100,000 deposit.

The ladder looks built to push a growing merchant upward, but the sums show something odd about its middle rung. Moving from Basic to Standard adds Rs7,000 a month and saves 0.25 percentage points, so it pays for itself only at Rs2.8 million of monthly card sales (7,000 divided by 0.0025). Moving from Standard to Advanced adds Rs5,000 and saves the same 0.25 points, breaking even at Rs2 million. Going straight from Basic to Advanced adds Rs12,000 and saves 0.5 points, which breaks even at Rs2.4 million. A merchant selling Rs2.5 million a month pays Rs84,249 on Basic, Rs84,999 on Standard and Rs83,749 on Advanced. Because Standard would need sales above Rs2.8 million to beat Basic, and sales below Rs2 million to beat Advanced, no volume makes it the cheapest on fees alone. It earns its place through the limits it relaxes, not through its price.

The smallest merchants pay the most. A free tier in the PayPro Business App carries a 4 percent fee, 50 transactions a month, a Rs10,000 limit and settlement in five business days, while a second free tier charges 3.5 percent. Against the 2.75 percent of the top gateway tier, the smallest sellers pay 1.25 points more. The slower tiers also leave the merchant's money in the system longer: 12 business days at Basic against four at Advanced. The page does not say how PayPro or its bank partners use that float.

These percentages are what the merchant pays, not what PayPro keeps. Part of any card fee goes to the issuing bank and the card scheme, and the study does not say how PayPro's share compares with its costs.

A cost ceiling and a subscription sum

The study's Rs10 million monthly operating cost target allows one more calculation, offered as an illustration. Subscriptions alone would cover it with about 3,300 merchants on Basic (10 million divided by 2,999) or about 670 on Advanced (10 million divided by 14,999). The 1,700 merchants counted at the end of 2023 sit between those two figures, but the study does not say how many pay for a tier and how many use the free app, so the sum shows the shape of the problem and not PayPro's position. Transaction fees, which the study lists as the first source of revenue, would lower the number needed.

Banks, wallets and a licence

The early years were slow because banks did not want a new intermediary. In 2019 and 2020 the company had to persuade them that it complemented banking, while other fintechs were offering lending and wallets. After March 2020 its bills for tools priced in dollars rose with the exchange rate, and inflation raised rent and salaries. The study names KuickPay as an early competitor that pushed PayPro to differentiate.

Integrations followed. The study lists a partnership with Bank Alfalah in 2021, interbank fund transfers in September 2021, a payment gateway link with Meezan Bank in 2022, JazzCash wallet payments and Zong SMS alerts in 2024. In 2022 the board decided to seek an electronic money institution licence from the State Bank of Pakistan for wallet accounts, and the study says the launch was delayed to 2024 for strategic reasons. Such a licence would let PayPro hold customer balances in wallets instead of only routing payments through banks.

Its stated priorities were the licence, break even and a merchant QR code, a unique code shown at each business so that customers can pay by scanning. The study says the revised business strategy runs through 2026, so the company's own plan runs out with this year.