Telenor Microfinance Bank, in partnership with Valyou of Malaysia, today introduced Pakistan’s first blockchain-based cross-border remittance service, powered by blockchain technology developed by Alipay, the online payment platform operated by Ant Financial Services Group.
The blockchain remittance service is provided by Telenor’s Easypaisa and Valyou, a financial technology company that provides remittances to underbanked communities. The plan was unveiled at an event in Islamabad attended by State Bank of Pakistan Governor Tariq Bajwa, marking a major milestone in the country’s journey to promote financial inclusion.
The blockchain technology will significantly boost the speed and efficiency of remittances from Malaysia to Pakistan. It will also ensure the money transfers are highly secure and transparent, as all information stored, shared, or uploaded through the blockchain remittance platform will be encrypted with advanced protocols in order to protect users’ privacy.
“This puts Pakistan on the map of very few countries in the world that have launched International Remittance using blockchain technology. At around USD 20 billion per year, international remittances are important from the perspective of overall macroeconomic stability and their positive spillover in improving lives of millions of families. Home remittances contributed to over 6% in GDP, equivalent to over 50% of our trade deficit, 85% of exports and over one-third of imports during FY 2017-18.”
He also stated that he expects that the financial sector will take advantage of current favorable market environment by investing in innovative technologies and product offerings to expand services and broaden access to financial services in the country.
The blockchain-powered remittance service will make round-the-clock, real-time money transfers between the two countries possible at a competitive exchange rate, with Alipay’s transaction fees waived during the one-year trial period.
“The new remittance service is one of the examples of how emerging technologies can help countries meet their digital and financial inclusion goals. We’re thrilled to be part of Pakistan’s financial inclusion efforts and we’re dedicated to exploring breakthroughs and applying them to benefit more people in more places. I would like to take this opportunity to express our gratitude to the State Bank of Pakistan for all the great support to make this project possible. I congratulate both Easypaisa and Valyou on this major development that will facilitate the people in both countries, putting Pakistan on the map of fintech innovation and promoting financial inclusion.”
By eliminating intermediary costs, the new remittance service reduces the transactional cost for end-users, while the blockchain technology enables both senders and receivers to track their money every step of the way, significantly boosting the service’s efficiency and safety.
“The transparency and swiftness this innovative and first-of-its-kind service brings to Pakistani users of international remittance will redefine international money transfer in the country. Currently, Pakistan receives about USD 1 billion in home remittances from Malaysia and this Easypaisa-Valyou collaboration is going to change it for the better. The service is the result of the close partnership between Telenor Group and Ant Financial Services and epitomizes our shared vision to empower societies by bringing inclusive financial services to the world.”
The service aims to promote and encourage the use of formal channels for remittances, with all existing incentives offered by State Bank of Pakistan for the promotion of international remittance through mobile wallet being applicable for this service.
“The international remittance service epitomizes the shared vision of Telenor Group and Ant Financial to empower societies by bringing inclusive financial services to the world. It is a bold statement of the wonders new technologies can do to transform the financial services landscape in Pakistan which remains a top priority on the country’s national agenda.”
Pakistan is in the process of strengthening its financial system, with the Pakistani government recently enhancing its National Financial Inclusion Strategy through a five-year plan that aims to create three million jobs and additional exports of $5.5 billion USD by improving SMEs’ access to financing.
Starting from 2015, Alipay has formed nine strategic partnerships with local partners outside Mainland China. As of today, Alipay, together with its global partners, is serving over 1 billion active users worldwide.