Chinese Alipay makes inroads into Pakistan with Rs20bln investment plan

[Devil Soul]

Chinese Alipay makes inroads into Pakistan with Rs20bln investment plan

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ISLAMABAD: Ant Financial Services Group, an affiliate of Chinese e-commerce giant Alibaba, on Tuesday agreed to acquire 45 percent stake worth around Rs20 billion in a subsidiary of Norwegian Telenor to broaden access to financial services through digital payment solutions in Pakistan.

“Telenor Group has reached a strategic partnership agreement with Ant Financial Services Group in Pakistan, where Ant Financial will invest $184.5m for a 45 percent stake in Telenor Microfinance Bank (TMB), a subsidiary of Telenor Group, to further develop TMB’s mobile payment and digital financial services,” a statement said.

“The strategic partnership… combines TMB’s knowledge and local market presence with more than 20 million customers, and Ant’s technology in Alipay, the world’s largest digital payment platform, and other financial services, to bring mobile payment and inclusive financial services to individuals as well as small and micro businesses in Pakistan.”

Completion of the transaction is subject to customary regulatory approvals.

Ecommerce players are also seeing the entry of a global leading online and mobile payment platform as a good omen for the market where 90 percent of online orders of Rs9.8 billion were still fulfilled using cash-on-delivery (COD) in the past fiscal year.

“It is a fantastic input,” Adam Dawood, head of online shopping site Yayvo.com, a part of Karachi-based courier service firm TCS said, referring to Alipay’s entry.

“It shows strength of market opportunities and that Pakistan is moving towards cashless economy,” said Dawood whose Yayvo boasts of 150,000 listings, while 40 percent of its orders are pre-payment.

In China, over 40 million brick-and-mortar merchants now accept Alipay. Overseas, Alipay now covers 40 countries and regions to provide more diversified services for Chinese travelling overseas.

Ali Zain Sheikh, a former country director of another ecommerce portal Daraz.pk said local players have already developed ecosystem and there is a tremendous potential in the country’s digital payment system.

“Looking at their (Alipay) history, they will likely create impact and leverage their resources to develop the market,” Sheikh added.

A World Bank’s estimate said almost half of the country’s 208 million populations are unbanked.

Sigve Brekke, chief executive officer of Telenor Group said partnering with a world leading payment provider like Ant Financial will strengthen Telenor Microfinance Bank’s future payment platform and set new standards in the digital banking business in Pakistan.

“The establishment of this partnership is well in-line with the expressed Telenor strategy of focusing our financial services efforts in emerging markets, making sure that we’re able to build and modernise the businesses in line with customer needs,” Brekke said in the statement.

Eric Jing, chief executive officer of Ant Financial said Alipay’s technologies make it uniquely placed to achieve its mission of bringing the world equal opportunities.

“Today, we are very happy to share our technology knowhow with Telenor Microfinance Bank to bring improved user experience on the Easypaisa mobile payment platform, as well as provide inclusive financial services in a transparent, safe, low cost and efficient way to the unbanked and underbanked population in Pakistan,” Jing added.

 

[somebozo]

Easy Paisa is a failed ship..too high rates and no bank integration..most banks dont support transfer to easyPaisa accounts..rather Asaan accounts like UBL Omni or HBL Asaan account are better choices as they are atleast full fledged account with complete bank account features. Even though telenor took over Tameer Bank, they are still just a difficult to load mobile wallet rather than bank account el proper.

 

[Basel]

Easy Paisa is a failed ship..too high rates and no bank integration..most banks dont support transfer to easyPaisa accounts..rather Asaan accounts like UBL Omni or HBL Asaan account are better choices as they are atleast full fledged account with complete bank account features. Even though telenor took over Tameer Bank, they are still just a difficult to load mobile wallet rather than bank account el proper.

Easy Paisa is backed by Telenor Bank (formally Tameer Microfinance bank), it was required to have a bank to support easy Paisa that is why Telenor purchased Tameer bank with SBP permission, easy Paisa may have it's cons but it also has it's pros too and it's very successful in rural areas, I have seen people sending money to their areas via easy Paisa because it's convenient for them.

 

[somebozo]

Easy Paisa is backed by Telenor Bank (formally Tameer Microfinance bank), it was required to have a bank to support easy Paisa that is why Telenor purchased Tameer bank with SBP permission, easy Paisa may have it's cons but it also has it's pros too and it's very successful in rural areas, I have seen people sending money to their areas via easy Paisa because it's convenient for them.

Yes because they are mainly dealing in Cash remittance to Easy paisa isnt really doing banking..the purpose of banking is financial inclusion...not making commissions from cash transfers..and that too hefty ones..when transactions are made via bank, it results in better financial inclusion, creating financial history, increasing tax base, access to credit, keeping proper record of revenue for economic planning..etc. Easy paisa in this context is just acting as a money transfer agent, the same role was played by money changers with their informal hundi/hawala systems. After many cases of theft by these agents, people are more comfortable in using a formal channel for the same purpose even if it comes at a high fees.


If will give you a small example..We used to pay our driver his monthly wage by bank transfer and for this purpose opened him an account at micro bank. When his son fell ill, he was able to get access to 100K loan for treatment. Had his wages been paid cash, he would be forced to beg from his relatives or even worst become victim of loan shark waderas at his village.

Micro Bank are created for financial inclusion or credit facilities for people of lowest social status doing menial jobs so they can uplift their economic life.

 

[Skywalker]

What mr. LNG is doing in this ceremony, it’s a matter between two companies.

 

[Basel]

Yes because they are mainly dealing in Cash remittance to Easy paisa isnt really doing banking..the purpose of banking is financial inclusion...not making commissions from cash transfers..and that too hefty ones..when transactions are made via bank, it results in better financial inclusion, creating financial history, increasing tax base, access to credit, keeping proper record of revenue for economic planning..etc. Easy paisa in this context is just acting as a money transfer agent, the same role was played by money changers with their informal hundi/hawala systems. After many cases of theft by these agents, people are more comfortable in using a formal channel for the same purpose even if it comes at a high fees.


If will give you a small example..We used to pay our driver his monthly wage by bank transfer and for this purpose opened him an account at micro bank. When his son fell ill, he was able to get access to 100K loan for treatment. Had his wages been paid cash, he would be forced to beg from his relatives or even worst become victim of loan shark waderas at his village.

Micro Bank are created for financial inclusion or credit facilities for people of lowest social status doing menial jobs so they can uplift their economic life.

No, people are not comfortable with regular banking channels due to fee and tax charged, that is why easy Paisa gained popularity, that is why banks started ADC that is why Jazz Cash was introduced because future is ADC.

 

[Clutch]

God news... I buy a lot from Ali express here in n. America.

Does this mean Pakistani vendor s can also sell from Ali express??

 

[somebozo]

No, people are not comfortable with regular banking channels due to fee and tax charged, that is why easy Paisa gained popularity, that is why banks started ADC that is why Jazz Cash was introduced because future is ADC.

The amount of tax charged is over a limit of 50K which is very reasonable and is only 0.6% for non filer
Easy Paisa fee is come out to be far higher than 0.6%.
EasyPaisa, JazzCash, UPaisa, etc are all part of the problem rather than solution. They dont create financial inclusion..only expensive money transfer agents. Financial inclusion is created when maximum money moves through banking channels..over here payment terminals at supermarkets are often out of order and clerk demands cash only. Cash transactions do not create income record to qualify for borrowing, a big reason why poor remains poor is due to inaccessibility of credit on reasonable terms while loan sharks thrive on the same.

What mr. LNG is doing in this ceremony, it’s a matter between two companies.

He may want to buy LNG on AliBaba in the future..

 

[Basel]

The amount of tax charged is over a limit of 50K which is very reasonable and is only 0.6% for non filer
Easy Paisa fee is come out to be far higher than 0.6%.
EasyPaisa, JazzCash, UPaisa, etc are all part of the problem rather than solution. They dont create financial inclusion..only expensive money transfer agents. Financial inclusion is created when maximum money moves through banking channels..over here payment terminals at supermarkets are often out of order and clerk demands cash only. Cash transactions do not create income record to qualify for borrowing, a big reason why poor remains poor is due to inaccessibility of credit on reasonable terms while loan sharks thrive on the same.



He may want to buy LNG on AliBaba in the future..

Yes 50K is not taxed but people are annoyed with banks, BMs are finding hard to get deposit these days, also Riba is also a reason due to which many don't want to go to banks.