The Telenor Microfinance Bank, a Pakistan-based subsidiary of Norway’s multinational telecommunications firm, the Telenor Group, has introduced a blockchain-based cross-border payments solution.
Through a partnership with Chinese payments company Alipay, Pakistan’s Telenor bank has become the first institution in the Islamic republic to launch a distributed ledger technology (DLT)-powered remittance service. As mentioned in the announcement’s press release, the international payments solution is part of collaborative effort involving Easypaisa (a leading Pakistani mobile banking service provider) and Valyou (a Malaysia-based subsidiary of the Telenor Group).
Based On Alipay's Proprietary Blockchain Technology
Developed using Alipay’s blockchain technology, the service reportedly allows “Pakistanis living in Malaysia to send money home instantly and securely through Telenor’s remittance service provider - Valyou.” Commenting on the innovative initiative, Tariq Bajwa, the governor of the State Bank of Pakistan, remarked:
This puts Pakistan on the map of very few countries in the world that have launched International remittance using blockchain technology. At around $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.
Bajwa added that “home remittances” accounted for more than 6% of Pakistan’s gross domestic product (GDP). This equates to “over 50%” of the nation’s “trade deficit, 85% of [the value of total annual exports] and over one-third of imports” during financial year (FY) 2017-2018, Bajwa noted.
As explained in the press release, the use of blockchain technology to transfer payments will “significantly boost the speed and efficiency of remittances from Malaysia to Pakistan.”
"Highly Secure & Transparent" Platform For Sending Payments Back Home
DLT-based monetary transactions conducted on the newly launched remittance platform will be ”highly secure and transparent.” Moreover, “all information stored, shared, or uploaded” to the payment network will be “encrypted [using Alipay’s] advanced protocols in order to protect users’ privacy.”
Shahid Mustafa, president and CEO at Telenor Microfinance Bank (in Pakistan), said:
The international remittance service epitomizes the shared vision of Telenor Group and Ant Financial (developer of online payments platform Alipay) to empower societies by bringing inclusive financial services to the world.
"Top Priority On Country's National Agenda"
Mustafa, an MBA graduate from Lahore’s University of Management Sciences, also noted:
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.
Meanwhile, Eric Jing, the chairman and CEO at Ant Financial, “an affiliate company” of the China-based Alibaba Group and the “highest valued fintech” firm ($150 billion) in the world, stated:
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.