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A Pakistani financial institution has launched a cross-border remittance service based on blockchain technology developed by Alipay, an Alibaba affiliate.
The microfinance bank of Telenor and the Malaysian fintech company Valyou have collaborated to offer the service to this company operating between Malaysia and Pakistan. The service should improve the efficiency and speed of remittances from the first to the second.
In addition, Pakistan's first blockchain remittance service will eliminate intermediate costs, making it more economical to send money. Users will also be able to track remittances at "every step of the way", according to a statement.
Market of lucrative remittances
Currently, it is estimated that Pakistanis living and working in Malaysia send about $ 1 billion a year. It is about 5% of the approximately $ 20 billion of remittances sent from the joint Pakistani diaspora spread around the world. The governor of the Central Bank of Pakistan, Tariq Bajwa, noted during the launch of the service that the remittances contribute significantly to the economy of the country.
With around 20 billion dollars a year, international remittances are important from the point of view of overall macroeconomic stability and their positive impact on improving the lives of millions of families. Home remittances contributed to over 6% of GDP, accounting for over 50% of our trade deficit, 85% of exports and over one third of imports during the 2017-2018 fiscal year.
This is not the first time that Alipay has been involved in a blockchain remittance solution in Asia. In the middle of last year, AlipayHK, based in Hong Kong, announced a blockchain-based money transfer service between Hong Kong and the Philippines.
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During the launch of the service, the founder of Alibaba, Jack Ma, said he had long desired to reduce the cost of remittance between China and Pakistan:
This comes from a promise I made a long time ago when Alipay was just launched. I have Filipino friends and they asked me when they could use Alipay to send money home because it was too expensive through the banks, which they charge too much.
Philippine remittance market
Currently, the Philippines is the third remittance market in the world. In 2017, the inflows to the Southeast Asian country amounted to about $ 3 billion. A significant part of the Hong Kong expat community comes from the Philippines. In 2016, it is estimated that Filipinos in the city-state have postponed $ 561 million to their country of origin.
Another Chinese company that recently announced the intention to launch a remittance service in the Philippines is Huaren Capital. Unlike Alipay, Huaren Capital will launch a stablecoin anchored to the Philippine Peso and will collaborate with local banks.
Shutterstock foreground image.
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