Asian countries adopt blockchain technology to significantly boost the speed and efficiency of cross-border remittances

Governor of State Bank of Pakistan Tariq Bajwa (center) and Eric Jing, Chairman and CEO of Ant Financial (2nd from right) unveiled Pakistan’s first blockchain-based cross-border remittance service to promote financial inclusion.

Telenor Microfinance Bank, in partnership with Valyou of Malaysia, has introduced Pakistan’s first blockchain-based cross-border remittance service, powered by industry-leading blockchain technology developed by Alipay, the online payment platform operated by Ant Financial Services Group (“Ant Financial”).

The blockchain remittance service is provided by Telenor’s Easypaisa and Valyou, a financial technology company that provides remittances to underbanked communities.

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,” said Tariq Bajwa, Governor, State Bank of Pakistan, who initiated the launch of the event. “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.

„By eliminating intermediary costs, the new remittance service reduces 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.”, according to the press release.

“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.” said Roar Bjærum , Senior Vice President, Telenor Financial Services, Telenor Group. “

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 promotion of international remittance through mobile wallet being applicable for this service.

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, are serving over 1 billion active users worldwide.

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Telenor Group is a leading telecommunications company across Scandinavia and Asia with 173 million customers and annual sales of around USD 14 billion (2017). We hold #1 or #2 positions in most of our markets.

Telenor Microfinance Bank (TMB) offers Easypaisa, Pakistan’s first mobile financial services platform launched in 2009, which is also the first and only GSMA Mobile Money Certified service. Easypaisa has since developed into the largest branchless banking service in Pakistan in terms of agent network, active accounts, and transaction value, according to the State Bank of Pakistan. TMB also provides microfinance and related financial services to the less privileged and unbanked segment of the Pakistani society.

Ant Financial Services Group (“Ant Financial”), subsidiary of Alibaba Group has bought 45% stake in Telenor Microfinance Bank, a subsidiary of Telenor Group, to further develop TMB’s mobile payment and digital financial services. This strategic partnership between Telenor Group and Ant Financial combines TMB’s knowledge and local market presence and Ant’s technology in Alipay, the world’s largest digital payment platform, and other financial services, to bring mobile payment and inclusive financial services to individuals as well as small and micro businesses in Pakistan.