Low Commissions Force Pakistani Teleco Retailers to Impose Additional Fees [2025 Update]: In recent years, the commission structure for teleco retailers in Pakistan—who handle mobile top-ups, money transfers, and utility bill payments—has come under significant scrutiny. With fixed commissions set at an almost nominal level, retailers are increasingly forced to impose their own additional fees on customers. This article examines the issues in detail and explores possible solutions.
Pakistani teleco retailers are facing a growing financial crisis due to extremely low commission rates on mobile top-ups, money transfers, and utility bill payments. Telecom operators have set commission rates so low that retailers barely make a profit, making it difficult to sustain their businesses. At the same time, rising operational costs—including shop rent, electricity, and staff wages—further reduce their earnings, leaving them with little choice but to impose additional service charges on customers.
Economic instability and inflation have also worsened the situation, leading to reduced customer spending and fewer transactions, further squeezing retailer profits. With limited revenue streams, many small retailers are struggling to survive, and some are even shutting down. The situation calls for urgent intervention by telecom companies and regulators to implement a fairer commission structure that allows retailers to earn sustainably without burdening customers with extra fees.
Table of Contents
Why Are Teleco Retailers Struggling?
1. Fixed, Minimal Commissions Affect Business Growth
Retailers traditionally earn a commission on transactions such as:
- Utility Bill Payments: Often, a fixed commission of as little as 3 rupees is awarded per 1,000 rupees billed.
- Mobile Top-ups & Money Transfers: These services attract only a small percentage commission, making profitability difficult.
This meager compensation hardly covers the operational costs for retailers, leaving them with insufficient earnings to sustain their businesses. Many are now looking for alternative ways to survive in this competitive landscape.
2. Impact on Teleco Retailers
The current low commission structure has several adverse effects:
- Financial Inadequacy: The minimal earnings mean that many retailers struggle to support themselves, making it difficult to maintain or expand their operations.
- Operational Constraints: With inadequate income, retailers are unable to invest in technology, customer service training, or even expand their offerings.
3. How Retailers Compensate for Low Commissions
To offset their low commissions, many retailers are resorting to additional fees:
- Imposing Extra Charges: Customers are now being charged an additional fee for transactions such as cash withdrawals and bill payments.
- Revenue Gap Compensation: These extra fees help retailers stay afloat in an industry where commissions remain stagnant.
This shift effectively transfers the financial burden from the retailers to consumers, making essential services more expensive.
4. The Consumer’s Perspective
For customers, these additional fees create significant challenges:
- Increased Transaction Costs: Customers pay more per transaction, adding to their financial burden.
- Transparency Issues: Many retailers do not clearly disclose additional charges, leading to confusion.
5. The Need for Regulatory Reforms
Regulatory intervention is crucial to address these issues:
- Disproportionate Tax Burden: The government collects high taxes on utility bills, while commissions for retailers remain low.
- Proposed Regulatory Changes: Industry experts are urging authorities to revise commission structures to ensure fair earnings for retailers.
Read about Pakistan’s telecom regulations
Global Telecom Industry Trends
Conclusion: A Call for Action
The dilemma faced by teleco retailers in Pakistan is twofold. Firstly, the fixed commission rates are so minimal that they do not provide a viable income, compelling retailers to impose additional fees on consumers. Secondly, the imbalance between the high taxes levied on services and the low commissions exacerbates the issue. Addressing this structural problem through regulatory reform could create a more balanced system—one that supports retailers fairly while protecting consumers from excessive fees.
By realigning the commission structure to better reflect operational realities, policymakers could reduce the need for additional charges, ultimately fostering a more transparent and equitable transaction environment for both retailers and consumers.
