Pakistan’s expanding e-commerce sector is losing an estimated $1.61 billion annually because of inefficiencies in cross-border payments, with most of the losses occurring at the checkout stage, according to a new report.

The findings, published in a white paper by Payoneer, show that Pakistan’s shortfall is part of a broader $72 billion gap across Asia, underlining structural weaknesses in digital payment systems that are limiting revenue potential for businesses engaged in international trade.

The report identified cart abandonment as the biggest source of losses, accounting for $0.97 billion, or more than 60 percent of the total. It said many transactions fail to convert into completed sales because of payment friction, unexpected charges and the lack of localized payment options at checkout.

Settlement delays were identified as the second-largest factor, causing annual losses of $0.46 billion. According to the report, slow payment cycles and layered financial systems are hurting cash flow and pressuring merchant margins, particularly for businesses dependent on cross-border transactions.

Another $0.18 billion in losses was attributed to foreign exchange costs and other payment-related charges, further reducing profitability for exporters and online sellers.

The report said these combined factors are preventing Pakistani businesses from fully benefiting from rising global e-commerce demand.

It added that improving payment systems will be critical to unlocking growth in Pakistan’s digital economy, calling for faster settlement processes, smoother payment flows and more localized checkout experiences to reduce transaction friction and improve conversion rates.