What could be the biggest implications for Pakistani startups and SMBs if Pakistan is placed on FATF’s grey list or black list?

Kinda complicated to ask, but what happened when Pakistan was on the list a couple of years ago? Betcha you don’t remember. It was business as usual. What will happen is that most businesses will refuse to send money directly to Pakistani vendors. Not because the businesses themselves don’t want to, but their banks would discourage it. They don’t want to show a direct transfer to Pakistan. Companies like TransferWise win in such cases.

Technically speaking, the banks will just discourage the practice, but if you insist, the money will be sent.

What it does do for startups who are operating in the fintech space globally from Pakistan, it just puts them in a tight spot when it comes to payments and/or potential partnerships.

All in all, it does not affect much from a startup & small businesses point of view.