Alipay Provides Backing for Blockchain-driven Service from Telenor Microfinance Bank
2019-01-16 15:13 Wednesday
Telenor Microfinance Bank, a subsidiary of Norwegian telecoms multinational Telenor Group, has launched a cross-border payment service using blockchain technology, which is backed by Alipay, a $150 billion fintech giant based in China. Alipay also acquired a 45 percent stake in Microfinance Bank for $184.5 million.
The bank claims that it is the first blockchain-based international remittance service in Pakistan, and that its service can offer real-time money transfers between Pakistan and China.
Blockchain will "significantly boost the speed and efficiency" of payments, the bank said in a statement, adding that the money transfers will be "highly secure and transparent."
"Home remittances 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 2017-18," said State Bank of Pakistan governor Tariq Bajwa.
"The implementation of the blockchain by the government marks a major milestone in the increase of financial inclusion in the country", he added.
"Currently, Pakistan receives about $1 billion in home remittances from Malaysia and this collaboration is going to change it for the better," said Roar Bjærum, senior vice president at Telenor Financial Services.
Alipay promised that it will not charge any transaction fees for users during an initial one-year trial period. "By eliminating intermediary costs, the new remittance service reduces transactional cost for end-users," the bank said in a statement.
While Pakistan appears to be keen on the potential of blockchain technology, it has previously taken a negative stance on cryptocurrencies. In April 2019, the country's central bank, the State Bank of Pakistan, issued a statement barring financial companies in the country from working with cryptocurrency firms. "Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction," the central bank said at the time.