Ant Financial Services Group is making a foray into Pakistan through a deal that will give the financial technology giant a 45 percent stake in a local mobile financial services provider.
The Chinese company has agreed to pay 4.5 million for its share in Telenor Microfinance Bank, which runs Pakistan's first mobile financial services platform Easypaisa.
The partnership is likely to strengthen TMB's payment platform and set new standards in the digital banking business in Pakistan, said Sigve Brekke, CEO of the bank's Norwegian parent Telenor Group in a statement on Tuesday.
The surplus of an underserved banking population, rising smartphone penetration and TMB's local dominance are among major forces that have propelled Ant to place the bet.
"In Pakistan, less than 20 percent of the local population have bank accounts. But about 71 percent of people have phones, 30 percent of which are smartphones, which are gaining popularity rapidly," the company said in an emailed reply to China Daily on Wednesday regarding the rationale behind the investment.
Meanwhile, strong government backing－TMB is the first such platform to be recognized by the local authority－has made it a highly reliable partner that has gained a deep understanding of local needs and habits, it added.
Therefore, Ant CEO Eric Jing pledged to share its technologies and experiences built around its Alipay app to improve user experience for Easypaisa, which serves more than 20 million customers by providing services ranging from payment of bills to microloans.
"A sound bilateral relationship with China makes Pakistan an ideal destination for investment," said Li Chao, an analyst at consultancy iResearch.
Ant has branched out overseas aggressively in the past two years to fulfill its stated goal of serving 2 billion customers over a decade. The deal will take the total number of recipients of its technology-export model to eight economies, after agreements were reached with local players in India, the Philippines, South Korea and Indonesia.