Jan 10, 2019 (China Knowledge) - Telenor Microfinance Bank has partnered with Malaysia’s Valyou to introduce Pakistan’s first blockchain-based cross border remittance service which is powered by Ant Financial’s online payment platform AliPay.
The blockchain remittance service is provided by Telenor Group’s subsidiaries Easypaisa and Valyou which are fintech companies providing remittance services to underbanked communities. With the new remittance service, Pakistan, now, becomes one of the few countries in the world to have an international remittance service built on blockchain technologies.
The new service was unveiled at an event in Islamabad attended by the Governor of the State Bank of Pakistan Tariq Bajwa and has been lauded as a major milestone towards financial inclusion in Pakistan.
The use of blockchain technology in the remittances will greatly speed up and boost the efficiency of transfer from Malaysia to Pakistan while also ensuring that they are secure and transparent, with all the information being stored and shared on the blockchain network being encrypted with advanced protocols.
More importantly, the use of blockchain technologies in these financial transactions allow each step taken by the sender and receiver of the remittance to be documented, falling in line with the direction laid out by the Financial Action Task Force (FATF).
Pakistan receives about USD 2 billion worth of remittance every year which contributes to more than 6% of the country’s GDP, making such remittances important to both macroeconomic stability and social mobility.
From Malaysia alone, Pakistan receives about USD 1 billion worth of remittances from Pakistanis working in the country. The new service will make 24/7, real-time transactions possible between both countries at a competitive exchange rate instantly. As an added bonus, AliPay has also waived transaction fees for 1-year.
The service aims to promote and encourage the use of mobile channels for remittances and will likely be expanded to include more countries and regions in the future. All existing incentives offered by the State Bank of Pakistan to promote international remittances using mobile platforms will also be available.
The new service underscores how new technologies can be used to help emerging countries to meet their financial inclusion targets, by making such remittances services available to more people. The use of blockchain technology in this service eliminates intermediary costs which translate to more cost-savings for users.
Pakistan is currently in the process of strengthening its financial system and has made the transformation of its financial services landscape a top priority.
The country is now working on a 5-year plan for its National Financial Inclusion Strategy which seeks to create 3 million new jobs and generate USD 5.5 billion worth of additional exports by giving SMEs more access to financing.
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