Today Telenor Microfinance Bank announced Pakistan’s first blockchain-based cross-border remittance service between Pakistan and Malaysia. The technology is powered by Alipay part of Ant Financial which in March 2018 took a 45% stake in Telenor Microfinance for $184.5 million.
The service is provided by Telenor’s mobile banking service Easypaisa in Pakistan and another subsidiary Valyou in Malaysia. The aim is to make payments real-time, 24/7 and more efficient. The data that’s uploaded to the blockchain platform is encrypted to protect user privacy. Blockchain allows the payer and recipient to track all the steps in the process.
Tariq Bajwa, Governor of the State Bank of Pakistan, explained the importance to Pakistan. International remittances amount to $20 billion a year, and home remittances contribute to more than 6% of GDP per year. That’s equivalent to 85% of the country’s exports last year. The channel between Pakistan and Malaysia accounts for $1 billion in remittances annually.
“This puts Pakistan on the map of very few countries in the world that have launched international remittance using blockchain technology,” said Bajwa.
Alipay won’t charge transaction fees 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,” said Eric Jing, Chairman and CEO of Ant Financial. Since 2015 Alipay has entered into nine strategic partnerships outside of Mainland China and now has more than one billion active users globally.
Telenor Microfinance is Pakistan’s first microfinance bank with 176 branches and 75,000 agents. In 2009 it launched the mobile banking service Easypaisa which is GSMA Mobile Money certified. The company is part of the Scandinavian Telenor telecoms group.
Alipay’s blockchain activity
Alipay is using blockchain for numerous applications. In June last year, it launched a similar remittance program between Alipay Hong Kong and the Philippines. It has an innovative rewards health insurance program and uses blockchain to process claims in seconds. Additionally, it’s using a blockchain system to manage repeat drug prescriptions. Parent company Ant Financial has a technology division that provides services to other financial institutions.