Toucan Weekly Roundup – 12 May 2017

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Fintech, Lending and Asia Focused Articles

3 things Asia can learn from Sweden’s booming fintech scene

Sweden’s Fintech sector has been influential in bringing about a cashless society, something that Asian Countries like Singapore and South Korea are hoping to emulate. There are 3 key lessons that Asian Countries can take away from this case study. Firstly, Fintech ventures should actively address specific needs and tailor their services according to the prevalent attitudes of their market. Secondly, Fintech companies should simplify lending and borrowing experience for consumers. Thirdly, Fintech startups should seek collaboration with government and traditional financial institutions.

(Jakarta City at night)

Former Citi Chairman and Asia Pacific CEO Shirish Apte invests in fintech startup Invoice Bazaar

Invoice Bazaar, a supply chain SME finance platform headquartered in UAE, with operations in Singapore and India, has received an undisclosed sum in investment from Shirish Apte, former CEO and Chairman Asia Pacific of Citigroup. Invoice Bazaar is a technology platform that offers supply chain finance, receivables finance and dynamic discounting. The company helps connect large buyers with SME suppliers, which enables them to avail early payment on their receivables.


“Asian fintech is a man’s world. But I’m now trying to change that”

Anna Vanessa Haotanto is the CEO of The New Savvy, Asia’s leading financial & career platform for women. She is also the head of the women in fintech group at the Singapore Fintech Association, a non-profit organization that encourages industry collaboration. The New Savvy provides content to help women make better informed investment decisions, empowering women by transforming their money relationship.


Mirador Financial Raises $7M to help banks compete with marketplace lenders

Banks continue to lose business to online lenders that can approve and offer small business loans in a matter of minutes. Fintech startups like Mirador have developed technology that lets banks offer similar convenience. By partnering with such Fintech startups, more banks will be able to level the playing field with online lenders who are able to offer fast and easy small business loans as well as maintain their lending relationships with small business customers.


Investors are busy people, so Funding Societies created an App for them to invest on-the-go

Funding Societies has announced the launch of its new investor mobile app that will offer the platform’s investors more convenience across all activities, from the sign-up all the way to the actual investing. Funding Societies helps connect SMEs with investors through an online marketplace. New users can apply and sign up to become investors entirely on the app. Additional features like advance notification for upcoming loans and low balance reminders ensure that investors will not miss an investment opportunity again.

Toucan Weekly Round Up – 5 May 2017

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Fintech, Payments and Asia Focused Articles

Your online, mobile, and social behaviour are now data-points used by fintech startups and governments in scoring credit-worthiness

Imagine a world where authoritarian governments and fintech companies monitor everything you do, amass huge amounts of data on almost every interaction you make, and award you a single score that measures how ‘trustworthy’ you are. China has been pushing to develop a nationwide social credit system that aims to generate a score for individuals and institution in the country based on data from tax filings and driving demerits. The score will also function as a signal mechanism for authorities about whom or what deserves to be penalized.


3 Reasons Banks are collaborating with Fintech Startups

Technology is impacting every sector including finance, contributing to the popularity of fintech startups – businesses that leverage AI and machine learning to create better financial services. Large financial corporations are starting to invest and partner with fintech to ensure digital advancement and growth. The 3 main benefits banks gain when investing in fintech companies include faster innovation, more accurate decisions and solving industry specific problems.


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Australian Fintech Payments Startup Airwallex Raises A$17 Million from Mastercard, Tencent, Sequoia China

Australian cross-border payments Fintech startup Airwallex has raised a A$17 million in a Series A funding round that saw participation from Mastercard, Tencent and Sequoia Capital China, in a bid to fuel its international expansion. Airwallex enables SMEs to make cross-border transactions at mid-market interbank exchange rates that are effectively cheaper than traditional wire transfers. The platform uses big data analytics, quantitative models and a sophisticated foreign exchange and payment engine to avoid volatility and inflated margins in foreign exchange markets.


How other countries can learn from China’s digital payment platforms

At a macro level, digital payment services have the potential to dramatically improve living standards for large sections of the population, especially in developing countries, through increased transparency, security, cost savings, and financial inclusion, particularly for women. For payment providers, e-commerce firms and social networks, one lesson they could apply is to attract users by building on existing e-commerce platforms and social networks, using strategic incentives to deepen usage.


API Innovation coming from inside and outside banking

For the last several years, the financial services industry has been undergoing a transformation that has led to changes in business models, delivery mechanisms, clients, and more. Consumer needs and expectations have shifted as new demographics of clients enter the market and existing clients demand digital offerings. As financial services regulations have tightened, the burden on financial services institutions has increased, putting pressure on them to adopt APIs from Fintech companies and third party providers.

NBFCs, MFIs and their hidden “unique unfair” Fintech advantage

Southeast Asia’s consumer finance scene is an interesting beast. While formal banks serve the top 5-10% of working class, Non-Bank Financing Companies (NBFCs) or Micro-Finance Institutions (MFIs) takes care of the next 25-30% of rising under-banked. As a result, close to 150 million under-banked consumers in countries such as Indonesia and the Philippines are served much less meaningfully than their “banked” counterparts due to a gross lack of automation, digitization and ‘data-fication’ in the traditional workflows of NBFCs/MFIs.

Picture leapfrog 1
Source: Toucan financial inclusion pyramid

While this huge group of consumers lose out on key aspects of financial services such as convenience of service, fast loan-turnaround time, and more inclusive financing offerings; NBFCs/MFIs are actually leaving a TON of potential business revenue on the table by underserving their target market.

While things look pretty grim currently for the shrinking traditional financing scene – the fact is, with all major financial institutions including banks around the world looking into digitizing and going data-driven, NBFCs and MFIs might just have an edge over traditional banks.

What, seriously?

To understand how, let’s take a look at the three main challenges slowing banks down from going digital despite the urgency to change and their deep pockets:

1. Consumer Inertia – most banks have some form of digital customer management platform in place, while this can be great, it can be a bane as moving customers from 1 digital platform to another digital platform that is marginally better can be difficult. Oh, and the usual affluent bank customers = older customers who are more financially stable but way more resistant to change.

2. Legacy technology debt – banking technology are built over multiple decades in chunks, the amount of “technology debt” built up is no joke and totally out of sync with today’s Application-Programming-Interface (API) driven standards. In many instances, technology stack have to be built from the ground-up. And for those who might not know: core-banking vendors such as Silverlake Axis and Infosys can be pretty pricey.

3. Legacy regulatory frameworks – working with regulators have never been a swift process. Banks are highly regulated and any change in operations tends to require approvals by multiple bodies. With so many stakeholders to please, change is naturally slow.

Picture leapfrog 2

Now, let’s contrast these points when NBFCs/MFIs embark on digitization and data-fication of their operations:

1. Consumer Inertia – NBFCs/MFIs serve primarily the under-banked/unbanked population, which usually consists of a much younger group of consumers receptive to change. More importantly, there is no inertia per se – any digital platform that makes their lives accessing financial services easier is at least 10 times better than the current non-existent platform.

2. Legacy technology debt – Compared to banks, most NBFCs and MFIs have at most a 3-5 men technology department. Therefore (ironically), because of the lack of technology in the first place, adopting new intuitive business/enterprise technology provided by more agile FinTech startups such as Oradian (European based offering user-centric core banking solutions for MFIs) or Mirador (US-based provider of small business lending platform) is way more straightforward. Fortunately too, with a leaner technology solution package, the price tag of adoption of their solutions is drastically reduced as compared to their full-fledged core-banking counterparts.

3. Legacy regulatory frameworks – most NBFCs and MFIs are subject to regulations too, but unlike full-fledged banks, there is a lot more leeway to operate without the need to obtain a million approvals for every single action performed.

As a result, the only thing standing between NBFCs/MFIs and their “unique unfair” Fintech advantage comes down to one single variable: the willingness and urgency to adapt to a time of great change where an unstoppable digital trend can bring with it plenty of mutual benefit for both supply and demand forces.  NBFCs such as “Global Dominion” and “Asialink Finance” are some examples of forward thinking companies that are moving quickly to reap the benefits of digitization.

Picture leapfrog 3

An old Chinese saying goes “Being on a boat against the current, you either progress, or you get left behind”

Will you be left behind?


Toucan Weekly Round Up – 28 April 2017

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Fintech, Payments and SEA Focused Articles

Jack Ma’s Ant Financial merges with Lazada’s HelloPay Group

Ant Financial, Alibaba’s financial affiliate, has announced that it has merged with HelloPay Group, Lazada’s online payment platform. HelloPay will be rebranded as Ant Financial’s online and mobile payment solution Alipay in its respective Southeast Asian markets. Integrating with Alipay will help Lazada improve its online payment solution, given Alipay’s quality in payment security and systems.


Alibaba-backed Paytm forays into digital gold; consumers can now buy, store, and sell gold on their smartphones

India’s leading digital payments company Paytm has foraged into digital gold business that allows users to buy, sell and store gold on their mobile phones. For this service, Paytm has partnered with precious metals processing facility MMTC-PAMP India. Users can buy and sell gold using their Paytm account, which will then be stored in lockers run by MMTC-PAMP. Users can also redeem accumulated gold in the form of coins or minted products and get them delivered to their homes. Alternatively, he/she can sell their accumulated gold back online instantly and the money will be credited into his/her account.

gold coin
Designed by Freepik

Flux, a fintech startup found by ex-Revolut employees, wants to make paper receipts obsolete

Flux, a London-based fintech startup is on a mission to make store receipts truly digital. The company has built a software platform that bridges the gap between itemised receipt data captured by a merchant’s point-of-sale (POS) system and what little information that typically shows up on your bank statement or mobile banking app. By partnering with merchants, their payment processor/POS systems and banks, Flux hope to make item level receipts digital and link them to your bank statement, in a seamless and intuitive manner.


TransferWise sets up Singapore office to serve as Asia-Pacific HQ

Online money transfer startup TransferWise is setting up its Asia-Pacific hub in Singapore, allowing it to reach more customers in the region. The startup allows its customers to send and receive money across borders for a fraction of the charges imposed on bank transfers. To do that, it uses a p2p system that matches users according to the currencies they want to send and receive, ensuring that payouts are made without funds ever actually crossing borders.


WeChat is more ‘sticky’ than Facebook

WeChat is stickier than ever, creeping into new aspects of our daily life and being used for an even longer period of time everyday. WeChat is now used for more than four solid hours per day by one-third of its users, up from 16.3 percent in 2015. The average daily time spent on WeChat has also risen up to 66 minutes, as compared to Facebook whose average users spend 50 minutes on it everyday. 82% of people have done office work or personal business on WeChat, mainly coordinating tasks, transferring files, taking video calls, and making transactions using the cashless WeChat Pay system, vindicating WeChat’s speedy rollout of new features in the past few years, covering online shopping and payments.

Toucan Weekly Round Up – 3 April 2017

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Fintech, Payments and SEA Focused Articles

Grab confirms it will acquire Kudo to boost digital payments

Grab has joined forces with Kudo after signing an agreement to acquire the Indonesian Payment Startup for an undisclosed amount. The acquisition of Kudo is due to Grab’s interest in expanding their digital payments system GrabPay. Kudo’s existing payments platform helps hundreds of thousands of customers sell prepaid phone credits, tickets and clothing in Indonesia. With this acquisition, Kudo’s own platform will be integrated into Grab’s own existing payment ecosystem.


Fintech startup soCash raises US$600,000 from angel investors

SoCash is a Fintech startup that provides digital cash management platform for banks. The platform enables users to withdraw cash from avenues like neighbourhood shops by placing orders on the bank’s app, selecting a cashpoint nearby and picking up the cash at the said outlet. The startup recently raised US$600,000 from angel investors and also became the first Fintech to receive the Financial Sector Technology & Innovation grant from MAS. SoCash’s goal is to enable convenient access to cash and reduce the cost of cash processing for banks.

OJXLE60Designed by Freepik


Ayopop raises U$1M from GREE Ventures to let Indonesians pay bills via an app

Ayopop is an Indonesian digital payments platform that aims to help Indonesians pay their utility and mobile subscriptions via a mobile app. It has announced that it has raised US$1 million in a seed round led by GREE Ventures. Although most Indonesian are still paying their bills and utilities offline, startups like Ayopop aim to raise awareness and open up opportunities for online digital payments in the country.


Japan: Major bank Sumitomo developing biometric ID fintech software

Japanese Bank Sumitomo Mitsui Financial Group has announced that they are researching and developing a biometrics software that uses voice recognition, facial recognition and fingerprint verification to carry out online payments. This move is part of a continuing effort to increase the security of financial payments and transactions in light of recent cyberattacks on Swift, the messaging system used by banks to conduct transfers. Sumitomo’s technology could prove to be a game changer for businesses that are looking for stronger and more affordable security measures for their online payments.


Inside SelfScore’s No-File Credit Model

SelfScore is a Fintech startup that provides credit access to international students. The startup uses machines learning to determine the creditworthiness of students who lack a credit history, offering them a credit card that they can afford. The startup’s Analytics Based Credit Decisioning (ABCD) system considers Eligibility, Identity, Stability of Identity and Ability to Pay for approval, in the absence of traditional metrics like SSN and Credit Scores. By providing international students with access to credit that they otherwise wouldn’t qualify for, the startup also helps students build their credit scores.

A Simplified View on Credit Payments

Understanding how Credit Payments work

Ever wondered why it only takes a few seconds for your credit card or Paypal payment to be completed? The entire payment process may seem simple, but what happens in this short time may amaze you. Here is an overview of how your credit payment is processed 5 seconds after swiping your credit card at a checkout counter or confirming your Paypal payment on Lazada.


Definition of Key Terms

  1. Merchant Shop – A commerce shop that is offering and selling products to customers
  2. Merchant Acquirer – Acquiring Bank that processes credit card transactions and transfers all transactions to the Card Issuing Banks
  3. Card Networks – Acts as an intermediary between Merchant Acquirer and Card Issuing bank to authorize credit card transactions (e.g. Visa, MasterCard, UnionPay)
  4. Card Issuing Bank – Bank that issues credit cards to customers on behalf of Card Networks


a) Paying for your item

When a customer like Ben wants to pay for a shirt that costs $100, he swipes his credit card in an Electronic Draft Capture (EDC) machine at the Merchant Shop counter and all the transaction information linked to the credit card is captured. While shopping online on Lazada, Ben can pay for the same shirt using a payment gateway like PayPal that similarly captures the transaction information online.



b) Processing your payment

At the Merchant Shop, the checkout machine sends Ben’s transaction information to the Merchant Acquirer. For an online shop, the payment gateway Paypal encrypts Ben’s transaction information, such as his credit card number, into a randomly generated 40 character alphanumeric token and sends this encrypted information to the payment processor used by the Merchant Acquirer.



c) Approving your payment

After checking that your bank account is valid, the Merchant Acquirer forwards the transaction information to the Card Networks (e.g. MasterCard) and then to Ben’s Card Issuing bank to authorize the transaction. The Card Issuing Bank approves the transaction and sends an authorization code to the Merchant Acquirer, who then gives the approval to the Merchant Shop to sell the item to Ben. For an online shop, the payment processor used by the Merchant Acquirer forwards an authorization code to the payment gateway, who then transmits the authorization to the website to process the payment for Ben online.


d) Closing time at the end of the day

The Merchant Shop sends all authorized transactions for that day in a batch to the Merchant Acquirer, in a process known as Batching. The Merchant Acquirer then sends this batch of authorized transactions through the Card Network, to request payment from the Card Issuing Bank, in a process known as Clearing. The Card Issuing bank and Card Network subtract their own share of the Credit interchange fee and transfer the remaining amount of money paid by Ben from his bank account to the merchant acquirer. Lastly, the Merchant Acquirer subtracts its own processing fee that covers the cost of processing credit cards for the Merchant shop and pays back the remaining amount subtracted from Ben’s bank account to the Merchant Shop.



e) You get billed

Ben is subsequently billed $100 by the Card Issuing bank.


Great! So this is the entire payment process in a nutshell and it takes up to 5 seconds on average.

Now that you know how much happens when you perform that simple swipe, it’s time to remember to pay your bills on time!


Toucan Weekly Round Up – 27 March 2017

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Fintech, Mobile Wallet and Bitcoin Focused Articles

Ethereum: The not-Bitcoin cryptocurrency that could help replace Uber

Ethereum is a decentralized application that supports a cryptocurrency just like Bitcoin. You can pay for things online, trade money, and buy and sell anywhere that accepts it. The difference is that Ethereum’s cryptocurrency, known as Ether, runs on a “smart contract” blockchain technology and “if:then” system that allows Ethereum to only be traded if a certain condition is met. This new payment method that incorporates smart contract technology could one day replace lawyers, companies, and even Uber.


Southeast Asia’s Fintech Pivot

Grab is raising a fresh US$1.5 billion in capital to bolster its own payment platform while Go-Jek’s mobile wallet Go-Pay has become the fourth most widely-used e-wallet in less than a year of existence. These moves by two of Southeast Asia’s fastest-rising tech firms are part of a larger trend, a regional pivot towards Fintech. This pivot is significant as payments is the last frontier of e-commerce in Southeast Asia and cracking payments could help make Southeast Asia’s online marketplaces financially sustainable.


Singapore Fintech Startup OOjiBO raises US$3.6M to serve the unbanked

OOJiBO provides a full stack retail banking system on a mobile phone and offers a full suite of services from p2p transfers, retail payments, interest bearing accounts, e-commerce payments, cross-border remittance, cash services, debit/credit card virtualisation and utilities payment. It can be used on both smartphones and feature phones. In areas where data connections are poor or non-existent, the OOjiBO system will automatically switch to an STK (SMS) format, allowing it to deliver financial inclusion to people living in rural areas or places with frequent electricity outages.


Unionbank launches the New Eon with Daon’s Biometrics-based strong authentication

Union Bank has launched the New EON, a digital banking platform, that uses Daon’s IdentityX Platform and its capabilities in mobile biometric authentication to improve security and customer experience. Working with Daon, EON has employed a layered approach to security, including device cryptography and biometric verification to lock down their mobile channel and secure high risk transactions. EON has initially deployed fingerprint and face authentication with subsequent plans to enable additional biometrics like voice recognition.


MENA Fintech Startup Now Money wants to help everyone get access to banking

Now Money was launched by its founders to provide expat workers who don’t have access to banking and remittance services with direct access to a current account, debit card and remittance from their proprietary app and service center. Customers can monitor their transactions, remit money and pay utility bills conveniently from the app. Users can also access multiple online exchange houses and select one based on the rate and services offered.

Toucan Weekly Round Up – 13 March 2017

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Fintech and Startup Focused Articles

This fintech startup is disrupting Korea’s banking sector, rewriting regulation

Toss is a simple and sleek money transfer app that is Korea’s answer to Paypal’s Venmo. The app reduces the mobile banking process to three steps: type in the recipient’s bank account or phone number, set the amount, then input your password or scan your fingerprint on your phone. Toss has also steered beyond transfers, adding microloans, credit score management, and a handy personal finance dashboard. Next up on the agenda is adding overseas transfers, loan brokerage, and insurance.


Ex-Credit Suisse Trader Sees Two-Year Card Startup Making Profit

Revolut is a startup that sells prepaid travel cards that can be loaded with different currencies. Revolut makes money by charging fees on ATM withdrawals and taking a cut from merchant charges on payments in shops. Since it began in July 2015, the company has processed more than $2 billion in foreign-exchange transactions. The company plans to expand into insurance at the end of March and wealth management from April or May this year through partnerships with third-party companies.


5 reasons why paperless finance is the way to go

The prospect of paperless finance will make long waiting lines, inefficient procedures, tedious paperwork, and other hassles associated with slow banking services a thing of the past. Loan processing could also be made much easier, setting up accounts online could become much more convenient than going to a bank.


New Framework to help set up fintech firms in S’pore and Japan

Fintech firms in Singapore and Japan can look forward to an easier set-up process in either country, thanks to a new framework. Monetary Authority of Singapore (MAS) and the Financial Services Agency of Japan have set up a cooperation framework to boost fintech links between the two nations. This effort will help reduce regulatory uncertainty and barriers to market and firms can also initiate discussions with the regulatory bodies, and get advice on regulatory matters such as required licenses.


Singaporean startup raises $2.4m to bring its AI-powered digital marketing tools to mobile.

Singapore-based startup Ematic integrates into a business’ email service and produces insights to help target its communications better. A suite of tools helps it analyze data and design more effective marketing campaigns. This helps businesses navigate through a fine line between successfully engaging your customers and spamming the daylights out of them, staying on the good side of the line. App operators will then be able to feed their users’ behavioral data into their email marketing system and benefit from Ematic’s analysis and automation.