Alibaba Group’s Alipay is going to enable consumers of Pakistan to make online payments globally as the Chinese third-party mobile and online payment platform is in final stage of talks. Alibaba to buy stake in Telenor Bank and is finalising share purchase.
The industry officials of the Telenor Microfinance Bank Limited have confirmed that Alipay is in talks for acquiring a prominent stake in the company.
State Bank of Pakistan also released a statement acknowledging the news saying that they have received a due diligence request from Telenor Microfinance Bank.
Even after an agreement between two parties regarding the sale and purchase the deal remains need an approval from central bank and other regulators.
Alibaba had been in talks with Telenor since two months and now the deal has started to surface and reached advance stages.
Telenor Group holds 100% stake in the fintech and intends to keep majority of shares. If the deal is locked Alibaba would acquire 49% stake in this business deal.
Rumours are that Alipay is acquiring a 40% stake in Telenor Bank at a price of $100 million. Former prime minister Nawaz Sharif met with Alibaba Group founding chairman Jack Ma in Davos earlier this year where the latter expressed interest in investing in Pakistan’s e-commerce sector.
In April 2017, Sharif met Alibaba President Michael Evans and discussed opportunities for introduction of the global e-commerce giant in Pakistan. Later in mid-May, the former premier visited the Alibaba headquarters in China and signed a memorandum of understanding.
Finance Minister Ishaq Dar, while presenting the budget for 2017-18 in the National Assembly in May, had announced that the government would establish an e-gateway for online global payments.
Dar had stated that in order to facilitate transactions through mobile banking and e-gateway systems, the government is establishing a state-of-the-art e-gateway at the SBP at a cost of Rs200 million.
The Economic Survey of 2016-17 said Pakistan’s ranking on the Financial Action Task Forcelist has improved from Grey to White which will enable entry of credible international players like PayPal.
Telenor Pakistan Chief Executive Officer Irfan Wahab Khan said the other day people had made local transactions worth Rs600 billion via their mobile payment platform, easypaisa, last year.
They were targeting to increase the transactions to Rs700 billion this year which would be equivalent to 3% of Pakistan’s gross domestic product.
He maintained that Pakistan’s e-commerce was growing at a rapid pace. It is worth $150 million (Rs15.75 billion) now and is anticipated to increase to $1 billion by 2020. Daraz.com made sales close to $1 billion on Black Friday (in Pakistan).
The Telenor Group announced in March 2016 that it had increased its shareholding in Telenor Microfinance Bank Limited (formerly Tameer Microfinance Bank) to 100%.
The bank’s profit increased 5% to Rs895.35 million in 2016 from Rs851.74 million in the previous year, according to its annual report of 2016.