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.