Established in 2020, Tag is one of Pakistan's most prominent fintech startups. It recently closed a $5.5 million pre-seed round led by Quiet Capital and Liberty City Ventures that valued it at $100 million. Additional info found at tag fintech.
Though most of the startup's funding comes from foreign investors, it also features some local members on its board. Talal Ahmad Gondal's political background has enabled him to assemble an experienced team with people who have held key positions within government, such as former generals and finance officials.
TAG is a pioneering force in the neobanking space, combining banking and peer-to-peer payments on one platform. They describe themselves as the "first digital-native financial super app" that seamlessly provides everyday banking services and instant P2P payments on one convenient platform.
The company boasts several noteworthy partnerships, such as one with a major telecom provider and bank. Furthermore, they plan to launch their mobile wallet soon which will enable users to transfer funds, pay bills and receive payments.
TAG has also secured deals with corporations to disburse salaries digitally in employees' TAG wallets. While these are positive steps, they come with risks as well.
Recently, the State Bank of Pakistan revoked TAG's in-principle and pilot operations approval to operate as an electronic money institution (EMI). They ordered that all outstanding funds be refunded to its wallet holders.
SBP's letter to TAG indicates it has identified violations of regulatory requirements and other issues during their pilot operations. Furthermore, the central bank has asked TAG to remove its co-founders from the startup, which would effectively revive it and allow for fresh starts.
The SBP's action has caused consternation among the country's tech community and been seen as a setback for fintech. This comes after TAG's YCombinator funding round in 2021, which raised $5.5 million from Quiet Capital and Liberty City Ventures.
TAG offers a neobanking service, which enables customers to open accounts with just their smartphone and receive a VISA debit card linked to it. Plus, TAG also offers other features like in-app payment, bill pay and peer-to-peer (P2P) payments.
Neobanking has gained prominence over the past few years, as banks struggle to attract younger generations and meet changing consumer needs. Neobanking can help address this by offering customers a simpler way to manage their finances without needing complex processes or fees.
Therefore, there are an increasing number of neobanking providers in the region. Some are already well-established while others are just getting started.
Some of these companies are striving to establish a strong presence in the region. Some are creating platforms that link Pakistani customers to global financial institutions, while others aim to enhance customer experiences by providing more services.