Building an Online Store in Pakistan: Why Cash on Delivery Still Rules

Quick answer: Pakistani e-commerce is growing fast, but cash on delivery (COD) still accounts for the majority of orders, so a good store has to support COD properly, confirm orders before dispatch, and offer easy wallet and Raast payments to nudge customers toward paying upfront. Mobile speed matters because most purchases happen on phones.

A fast-growing market that still pays in cash

The State Bank of Pakistan recorded 111 million e-commerce transactions in FY25, up from 78 million the year before, a 42% rise, according to Markaz's 2026 market review. Internet users reached roughly 116 million in early 2025, and the same review says 75% to 80% of online purchases happen on mobile. Pakistan also has around 66.9 million active TikTok users, which is why social commerce is part of nearly every conversation about online selling here.

Yet the way people pay has not caught up. The draft e-Commerce Policy 2.0, as quoted in that review, puts COD at 60% to 70% of e-commerce orders. Wallets and bank-account payments are widely used: JazzCash reported 40 million-plus users, EasyPaisa 35 million-plus, and Raast has about 39.5 million registered IDs. The potential for prepaid orders is there. The habit is what has to change.

Why COD is expensive for you

COD is convenient for the buyer and risky for the seller. Orders are placed on a whim, the customer is not at home, the parcel is refused at the door, and you pay shipping both ways. The Markaz review flags refusals and returns as a drain on margins for platforms without prepaid volume. If you sell low-margin goods, a few refused parcels can erase the profit from a dozen good ones.

Design your checkout to reduce refusals

Confirm every COD order. Send an instant SMS or WhatsApp message with the order summary and ask the customer to reply to confirm. Orders that never get confirmed should not ship.

Collect a usable address. Addresses in Pakistan can be informal. Use separate fields for city, area, street or house, nearby landmark and a second phone number, and validate the phone format. A clear address saves courier calls and failed deliveries.

Nudge toward prepayment. Offer a small discount, free delivery or a gift for paying by wallet, card or Raast. Even moving a modest portion of orders from COD to prepaid improves cash flow.

Offer the wallets people already use. Integrate JazzCash, EasyPaisa, bank transfer and Raast QR where your gateway supports them, and show the options clearly on mobile. Confirm what your payment provider supports and its fees before you design around it.

Be transparent about returns. A short, plain return policy near the Add to Cart button builds confidence and reduces disputes.

Use courier integrations. Booking, tracking numbers and status updates sent automatically to the customer reduce support messages and cancellations.

Build for the phone in your customer's hand

Most of your traffic will be on mid-range Android phones and mobile data. Compress product images, avoid heavy sliders, use a clean one-page checkout and test on a real mid-range device. Google's page experience targets are LCP under 2.5 seconds, INP under 200 milliseconds and CLS under 0.1, and they are a good benchmark for any store.

Support Urdu and English if your customers use both. Many people also search in Roman Urdu, so product titles and descriptions that reflect how customers really type can help you appear for those searches.

Policy and tax changes to watch

The Markaz review notes a draft e-Commerce Policy 2.0 that proposes phased COD caps and digital payment targets, and a Finance Act 2025 withholding tax of 0.25% to 2% on digitally ordered goods. It also reports changes to duty and sales tax on small cross-border parcels. Rules like these can shift your margins, so keep your accountant and your developer in the same conversation, and check the latest official positions before you change prices.

SEO for Pakistani online stores

• Write unique product descriptions in plain language.
• Add structured data so price, availability and reviews can show in search results.
• Create category pages around how people search, including city names for local delivery.
• Show delivery times and COD availability, which many shoppers search for.
• Collect and display genuine reviews with photos.

FAQs

Is COD still the main payment method in Pakistan?
By the draft e-Commerce Policy 2.0 estimate quoted above, COD makes up around 60% to 70% of e-commerce orders, although digital payments are growing.

How can I reduce COD refusals?
Confirm orders by SMS or WhatsApp, collect a clear address and landmark, and offer incentives for prepaid payment.

Should I accept JazzCash and EasyPaisa?
Both have tens of millions of users, so offering them is sensible. Check gateway availability and fees first.

What platform should I use?
Shopify, WooCommerce or a custom store can all work. Choose based on your catalogue, payment gateway support and the team that will run it.

Related reading: Pakistan's IT Boom: How Software Houses and Freelancers Can Win International Clients With a Better Website

Planning a store for Pakistani customers?

Websigntist builds e-commerce websites and business software for companies in Pakistan and around the world. If you want a store designed around local payment habits, talk to us.

Source: Markaz, State of E-commerce in Pakistan 2026, citing State Bank of Pakistan data, DataReportal and the draft e-Commerce Policy 2.0. Figures are as reported by that source and may be updated.