How inflation and unemployment effected by the application of Fintech in Pakistan.

Abstract

This research focused on the two important economic factors such as inflation and unemployment and its effects on the Fintech in Pakistan. As, Fintech is essentially the use of technology to deliver updated and new financial services. In Pakistan's fintech journey, the launch of branchless banking services like Easypaisa and JazzCash marked a significant turning point. Fintech is roughly defined as mobile money, online digital transactions and payments, and digital payment making and receiving. Hence, to examine the two most widely used metrics i.e. inflation and unemployment from the year 2014 to 2023, data was taken from the online database of Pakistan and website of world bank. It appeared that the active usage of Fintech through two-way transactions (buy and sale) resolved by the digital payment made or received has a lowering influence on inflation with respect to the traditional causes of inflation. However, passive use the straightforward act of purchasing or consuming, such making a payment online has a positive and substantial effect on inflation. This includes the adoption of debit cards and digital payments. And hence, this study also found that Fintech has the negative impact on unemployment rate through new investment opportunities. Governments would have to promote phone use, increase internet usage, and, most importantly, actively participate in digital commerce. Furthermore, robots are not going to replace humans in the workforce as a result of modern technology. For this reason, if employees need to acquire new skills due to current technological advancements, industry analysts think the analysis will probably enhance human capacities. Therefore, in order to enhance their digital infrastructure, particularly for enterprises, Pakistani government authorities should boost their economies and increase their information and communication technology.