ASEAN Fintech Trail: 5 Start-Ups To Watch In 2017
On-demand finance is red hot on this side of the planet
PHOTO CREDIT: Getty Images
Without a doubt, the opportunities for on-demand, mobile- and cloud-powered financial services are vast in ASEAN, where, as a 2016 KPMG report reveals, 73% of the region’s some-600 million population do not have bank accounts.
In an Inc. Southeast Asia article, Ron Hose, co-founder of Philippine-based fintech start-up Coins, puts it succinctly: “There are way more Filipinos who have Facebook accounts than bank accounts, and it’s still moving in the favor of Facebook.”
While Hose speaks mainly of the Philippine setting, where banking penetration is under 30% and credit card penetration at an even lower 5%, it’s a similar picture in most of Southeast Asia, with the clear exception of fintech hotbed Singapore.
Indeed, fintech may still be at its nascence in most of Southeast Asia, but 2017 has seen an increasing number of regional contenders looking to grab a piece of what the PwC Fintech Report estimates a $150 billion global fintech pie in 2017.
Here are five start-ups that have caught our attention:
1. Bluzelle: Blockchain demistifier
It goes without saying that blockchain is one of the biggest disruptors in the world of finance — the most apparent among its many potential use cases. While there is a great deal of interest among enterprises to leverage blockchain technology, a 2016 Deloitte report reveals that most companies are still at the learning stages of their blockchain journey. Enter Singapore-based fintech start-up Bluzelle.
The start-up co-founded by Pavel Bains and Neeraj Murarka is setting out to do for blockchain what Oracle has done with applications and middleware for database management. Simply put, Bluzelle makes blockchain easy for its customers to use. “We take all the backend plumbing, the hardware used to build the blockchain product, we run and maintain it, and build the technology platform that does everything for them. All our customers need to focus on, whether they’re an insurer, a bank, or any enterprise, is the application they need for their customers,” explains Bains.
2. Cropital: Countryside crowdfunding
Launched in November 2015, Manila-based Cropital is a crowdfunding platform that lets users invest in and finance small farmers. The goal is to free Filipino farmers, most of whom do not qualify for bank loans, from the grip of loan sharks.
According to this Inc. Southeast Asia article, 60 to 70% of the firm’s investors comprise millennials within the 18-34 age range. The platform, accessible to both banked and unbanked citizens, offers bank transfer, online banking, and over-the-counter cash payment options to fund virtual wallets. Profit sharing between investors and farmers varies, with the average rate of return at 8%.
While investing in agriculture comes with risks that include pests, unpredictable weather patterns, and volatile commodity prices, the opportunity Cropital’s agrarian peer-to-peer lending business model presents in Southeast Asia is vast, with over 40% of the region’s population relying on agriculture for income.
3. ConnectNPay Myanmar: Fintech enabler
Before ConnectNPay (CNP) Myanmar came into the picture, there were only two ways for locals to pay utility bills in the Golden Country: either they line up for four to five hours in a payment center or they hire a black market operator to do it for them. It was, relates CNP co-founder Patrick Kershaw, a payment system that was “totally broken.”
Keen on solving this particular pain point, Singapore start-up Leo Tech and Myanmar Computer Company joined forces to form CNP, which rebuilt Yangon’s utilities billing platform and converted the entire city’s billings — from land, taxes, and water — into digital format. Today, paying bills takes locals a fraction of the hours they once spent lining up. Last 2016, CNP processed over $50 million in bills — “just under one percent of what we can see as far as transactions currently available on the platform,” says Kershaw — and this is set to grow to as much as $150 million with three mobile money operators launching before the end of 2017.
4. Coins: Cashless King
Founded in 2014 by Silicon Valley entrepreneurs Ron Hose and Runar Petursson, Coins is a fintech start-up based in the Philippines that enables quick, cheap, and safe mobile money transfers. Transactions within the Coins platform are wide-ranging, from remittances and bills payments, peer-to-peer exchanges, and online shopping. It’s one of the more successful use cases of blockchain in the region, with transactions processed over the bitcoin blockchain network.
As reported in this Southeast Asia article, Coins currently collaborates with banks, financial institutions, and last-mile retail outlets. It has a network of over 22,000 cash disbursement and collection locations across the Philippines, and is expanding its footprint in other countries in Southeast Asia including Thailand and Indonesia.
5. HitPay: Frictionless payment provider
For borrowers who simply do not have the time to deposit money or make payments in a bank, Singaporean mobile payment technology provider HitPay offers a convenient solution. The start-up founded by Aditya Haripurkar recently launched the HitPay Payment Keyboard on iOS, which enables iPhone users to send instant payments to friends and online businesses within apps like WhatsApp, Facebook Messenger, Instagram, or Gmail.
“Any application that brings up a keyboard, you have an opportunity to pay right there,” says Haripurkar. Unlike mobile wallets or a chatbot provider, making payments using the HitPay keyboard — which is integrated into Apple and, soon, Android APIs — is as easy as keying in that facepalm emoji.