10 Sep 2019
Cross-border payment startups are rushing into Asia as deregulation of the sector has enabled online services to operate in the region, in a major threat to existing banks.
Among them, TransferWise, a U.K.-based online remittance company, will launch a debit card in Singapore in the next couple of months and in Japan next year. Founded in 2010, the company is valued at $3.5 billion, making it one of the most valuable unicorns — private companies worth $1 billion or more — in Europe.
TransferWise is not the only nonbank player to see opportunities in Asia. Singapore-based fintech startup InstaReM is expected to receive licenses in Japan and Indonesia within the year, while U.S.-based Remitly in August opened its largest office outside of the U.S. in Manila.
UK-based payment startup Revolut also sees opportunity in Asia. Nikolay Storonsky, CEO of Revolut, told Nikkei Asian Review in an interview last year that it would enter the Japanese market with plans to expand further in Asia. It appears that the company is now preparing to launch online payment services like remittance in Japan.
TransferWise’s new service will allow users to top up their TransferWise accounts and spend in over 40 currencies at lower exchange rates than conventional bank offerings. The service will allow users to generate savings compared with traditional credit cards.
The company’s core remittance service is used by foreign students and expats to send to and receive money from their home countries. The debit card is aimed at travelers and small businesses that use the service more frequently, for example, booking accommodation for business trips.
“The next question of our customer is, it’s great that I can hold money with you but now I want to be able to spend it when traveling,” said Venkatesh Saha, head of Asia-Pacific expansion at TransferWise in a recent interview with Nikkei Asian Review.
The company has 5 million users worldwide and makes $5 billion worth of transactions every month. In Asia and the Pacific region, the overall volume is “15 billion pounds ($18.5 billion) per year, and that has grown at about 50% year-on-year,” said Saha.
He added that TransferWise has recently been awarded a license in Malaysia and is now “actively working toward launching our service there” by the end of the year.
The World Bank estimates global remittances reached $689 billion in 2018, up 9% from 2017 and roughly doubled from 2006. Growth has been driven by Asia, from which workers and companies are expanding abroad. Remittances to South Asia grew 12% in 2018, compared with 6% in 2017. East Asia and the Pacific region saw 7% growth in 2018, up 2 percentage points from 2017.
By Rurika Imahashi and Wataru Suzuki, Nikkei Asian Review, 10 September 2019
Read more at Nikkei Asian Review
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