KARACHI: Alipay, the China-based third party mobile and online payments platform, will start operations in Pakistan by the end of this year, according to Irfan Wahab Khan, the Telenor chief executive officer.
Khan is also a board member of the Telenor Microfinance Bank in which Ant Financial, the parent company of Alipay and the financial services affiliate of Alibaba, acquired a 45% stake at an investment of $184.5 million in March 2018.
Currently, Ant Financial is in the process of taking approval from relevant authorities such as the State Bank of Pakistan (SBP) and Competition Commission of Pakistan (CCP) to commence financial services in the country.
As Pakistan embraces digital technology after the spectrum auction that saw the arrival of 3G/4G services in the country, a payments solution was the need of the hour. While mobile phone infrastructure and service penetrate 72% of the population, according to the latest data available with the Pakistan Telecommunication Authority (PTA), future growth will rely on digital payments becoming more accessible.
Khan agreed that the opportunity exists.
“The opportunity exists in data, digital payments and e-commerce,” Khan told The Express Tribune.
Pakistan has 58 million broadband subscribers including 56 million 3G/4G subscribers. Its e-commerce market is estimated at $1 billion, and gaining momentum.
Recently, Alibaba, the Chinese e-commerce giant, acquired Daraz.pk from venture capital company Rocket Internet, and is tipped to be expanding its footprint in the country.
Its financial muscle and experience will help it against competition that includes the likes of PayPak of 1link, Fonepay, and Avanza Premier Payment Services (APPS) that have also entered the digital payments space with investments to the tune of millions of dollars.
Telenor – with its network and infrastructure – is also looking at the next growth segment as mobile broadband penetration slows down in the next five years.
Additionally, as users opt for over-the-top applications that bypass the traditional calls-receiving and calls-making processes, cellular mobile operators (CMOs) are now eyeing growth in the digital payments segment.
“We are putting a site an hour on 4G and will complete 80% of them by the end of this year,” said Khan, who took over as CEO Telenor Pakistan on August 1, 2016.
Telenor is currently placed second as the CMO with the highest number of subscribers. It has 43 million subscribers after Jazz, which is the market leader with 55 million.
Telenor also has a 23% market share in the Next Generation Mobile Services (NGMS) market, which puts in third place after Jazz (34%) and Zong (29%).
On the other hand, Telenor also invested in an agriculture sector-related app, ‘Khushhal Zameendar’, which provides location-specific weather forecast and agronomic advisory to small-scale farmers.
“It’s about incentive. Customers are sensible to adopt new technology when it offers incentives to them,” Khan said.
Published in The Express Tribune, August 15th, 2018.