According to a recent report, a microfinance bank, in partnership with a Malaysian financial technology subsidiary of a major Malaysian telecommunications company, has introduced Pakistan’s first blockchain-based cross-border remittance service. It is powered by industry-leading blockchain technology developed by the online payment platform operated by the highest valued fintech company in the world.
The blockchain remittance service is provided by a financial technology company that provides remittances to under-banked communities. The plan was unveiled at an event in Islamabad attended by Governor of the State Bank of Pakistan, marking a major milestone in the country’s journey to promote financial inclusion.
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 be encrypted with advanced protocols in order to protect users’ privacy.
The Governor, who initiated the launch of the event, noted that the move put Pakistan on the map of very few countries in the world that have launched International Remittance using blockchain technology.
It was also noted that at around US$20 billion per year, international remittances are important from the perspective of overall macroeconomic stability and their positive spill-over in improving the lives of millions of families.
It is expected that the financial sector will take advantage of the current favourable market environment by investing in innovative technologies and product offerings to expand services and broaden access to financial services in the country.
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 the contributing financial services company’s transaction fees waived during the one-year trial period.
Chairman and CEO of the financial group noted that the new remittance service is one of the examples of how emerging technologies can help countries meet their digital and financial inclusion goals.
By eliminating intermediary costs, the new remittance service reduces the 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, according to the Senior Vice President of the telecommunications company.
It was noted that the service is the result of the close partnership between Telenor Group and Ant Financial Services and epitomizes a 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 the promotion of international remittance through mobile wallet being applicable for this service.
Pakistan is in the process of strengthening its financial system, with the Pakistani government recently enhancing its National Financial Inclusion Strategy through a five-year plan that aims to create three million jobs and additional exports of $5.5 billion USD by improving SMEs’ access to financing.
Starting in 2015, the financial services company has formed nine strategic partnerships with local partners outside Mainland China. As of today, the company, together with its global partners, are serving over 1 billion active users worldwide.