The online money transfer platform will use the funds to will be used to open more corridors with Malaysian business trade partners like Indonesia, Taiwan, India, Vietnam and Hong Kong. The firm will also use the funds to expand its team to accommodate its growth and maintain its service level quality.
A recent report announced that a new disruptive online money transfer platform, which aims to provide the lowest transfer fees in the market from Malaysia to China, has successfully raised RMB2 million (US$500,000) in seed funding to help local small and micro businesses with cross-border trade payments. Investments came from a group of private investors based in Malaysia.
The funding will be used to open more corridors, primarily to countries that Malaysian businesses trade with such as Indonesia, Taiwan, India, Vietnam and Hong Kong. The disruptive tech firm will also use the funds to expand its team to accommodate its growth and maintain its service level quality.
The Malaysia-based fintech simplifies the way businesses remit money to their trade counterparts by allowing businesses to transfer money securely, with faster processing times, and cheaper rates.
It focuses on businesses that are under-served by banks – micro traders, sole proprietors, and other small enterprises – who would otherwise not enjoy preferential rates as those offered to large businesses.
According to the firm’s General Manager, small and medium-sized businesses are generally overlooked by banks because their transaction volumes are small, or they don’t have a proper credit history. Most of them still need to queue at the bank counters and pay higher exchange rates for international transfers.
The company came about when its founders, who have experiences in the financial services, technology and procurement industries, noted the inconvenience of making international business payments at the banks. Payments to China, particularly, was an expensive affair. Additionally, documentary compliance was a challenge and clarity on the status of payment transactions was lacking.
The tech company identified the issue and then began brainstorming ideas for how they could make cross-border remittances more accessible and affordable for smaller businesses.
Thus, they looked at how they can leverage technology to bridge this gap, according to the co-founder of the tech firm. The company started by offering its service to China.
It noted that with total imports from China accumulating to RMB164 billion in 2017, there was an opportunity to serve an equal demand from local businesses looking to perform payments to their Chinese counterparts.
It charges a standard transfer fee of RMB15 regardless of transaction size and claims to have exchange rates that are 50% lower than what banks offer.
One of the firm’s customers, a traditional Thai massage chain that recently expanded their operations to China stated that they loved the convenience and service levels of the Malaysian tech firm and their team provides. The icing on the cake is the thousands of ringgit that the Thai firm was able to save in transferring money for its business operations.
By focusing on making cross-border payments more efficient for businesses, the firm believes it will be able to help thousands of small businesses grow.
Experts argue that it is encouraging and promising to see businesses investing in cross-border e-payment methods because these methods are in line with Malaysia’s smart city goals.
According to the Smart City Initiatives for Malaysia, the country will pursue a new idea and new mode of promoting smart city planning, construction, management and services. This will be done through the use of the internet of things, cloud computing, big data and spatial geographic information integration.
A part of how this can be achieved is by creating an environment wherein SMEs and larger businesses can flourish and thrive by providing support to each other thereby contributing to Malaysia’s economy and developing tech innovations, products and services that will benefit Malaysian citizens, and foster collaborations with foreign countries.
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