Telenor Microfinance Bank, a subsidiary of Norwegian telecoms multinational Telenor Group which is situated in Pakistan just introduced a cross-border payment that uses blockchain technology from payments company Alipay.
According to the bank, it is the first blockchain-based international remittance service launched in Pakistan. The announcement made by the bank on Tuesday disclosed that the development is as a result of the joint effort between Telenor Group’s Malaysian fintech subsidiary Valyou and its Pakistani mobile banking arm Easypaisa, with the two nations being provided with real-time money transfers.
The bank noted in a statement that blockchain will “significantly boost the speed and efficiency” of payments, further stating that the transfers of the money will be “highly secure and transparent.”
“Currently, Pakistan receives about $1 billion in home remittances from Malaysia and this Easypaisa-Valyou collaboration is going to change it for the better,” according to the senior vice president at Telenor Financial Services, Roar Bjærum.
“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 FY 2017-18,” the State Bank of Pakistan governor, Tariq Bajwa said.
Transaction fees are reportedly waved by Alipay which is managed by Alibaba Group’s Ant Financial for use of its technology as the initial one-year trial period was ongoing.
“By eliminating intermediary costs, the new remittance service reduces the transactional cost for end-users,” based on a statement made by the bank.
As Pakistan seems to develop an interest in the capability of blockchain technology, it has a negative view of cryptocurrencies to date. A statement barring financial companies in the country from working with cryptocurrency firms was issued by the country’s central bank, the State Bank of Pakistan back in April.
“Any transaction in this regard shall immediately be reported to the Financial Monitoring Unit (FMU) as a suspicious transaction,” the central bank warned at the period.