ISLAMABAD – 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
ISLAMABAD – 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 plan was unveiled at an event on Tuesday which was attended by among others State Bank of Pakistan (SBP) Governor Tariq Bajwa.
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 been crypted with advanced protocols in order to protect users’ privacy.
Governor SBP Tariq Bajwa on the occasion said that at around US $20 billion per year, international remittances were important from the perspective of overall macroeconomic stability and their positive spillover in improving lives of millions of families.
Home remittances, he said contributed to over 6 percent in GDP, equivalent to over 50 percent of our trade deficit, 85 percent of exports and over one-third of imports during FY 2017-18.
He also said that the Government of Pakistan and SBP have taken a number of initiatives to promote the transfer of home remittances using formal financial channels and the new block-chain technology based remittance service would complement these efforts as transfer of cross-border remittances in near real time would bring convenience and facilitation for both senders and their beneficiaries.
“This puts Pakistan on the map of very few countries in the world that have launched International Remittance using block-chain technology”, he added.
Tariq Bajwa also stated that he expects that the financial sector would take advantage of current favourable market environment by investing in innovative technologies and product offerings to expand services and broaden access to financial services in the country.
What is blockchain technology?
A blockchain is a list of records called blocks, which contain time stamps and transaction data that are linked and secured by using cryptography. It is virtually impossible to hack into or modify. Universally shared across the blockchain (in other words, a chain of blocks), everyone has a record of every transaction, hence there is no possibility of fraud or corruption. This removes middle-men, such as banks or regulatory authorities.
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,” said Eric Jing, Chairman and CEO of Ant Financial.
“I would like to take this opportunity to express our gratitude to 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 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,” said Roar Bjærum, Senior Vice President, Head of Financial Services, Telenor Group & Chairman Valyou.
“Currently, Pakistan receives about US $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 promotion of international remittance through mobile wallet being applicable for this service.