What The FinTech #103 - 3 Jul 2022
Happy Sunday & Welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia!
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What you would have missed if you had stayed in a cave during the entire week!
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What The FinTech Episode 6
Medhy interviewed Calvin Cheng, CEO & Founder of Wizpresso.
Wizpresso design solutions to help you get your work done as quickly and as productively as possible. They power legal and financial professionals to find insights, verify information, and manage documents.
To learn more about Wizpresso, listen to this episode.
The previous interviews, and the next one, are available on podcast: Spotify, Apple Podcasts, Google Podcasts.
Dennis Shi - CEO of Mojodomo - Video on Linkedin / Youtube
Jessica Liu - Co-founder of Planto - Video on Linkedin / Youtube
Neil Tan - CEO of Neptune Digital - Video on Linkedin / Youtube
Percy Hung and Brian Tsang, co-founders of Choco Up - Video on Linkedin / Youtube
Alvin Kwock, Co-Founder of OneDegree - Video on Linkedin / Youtube
Calvin Cheng, CEO & Founder of Wizpresso - Video on Youtube
What The FinTech Episode 7 & 8
Check out the previous videos here: on What The FinTech, Instagram or Youtube.
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What was the FinTech this week in: 📰
HONG KONG
Airwallex intros global payment services in new Zealand
Airwallex intros global payment services in new Zealand
Financial services startup Airwallex is launching global payments in New Zealand to offer businesses international collections, multi-currency wallets in over 11 currencies, and local payouts in over 30 currencies. The launch provides New Zealand businesses with a transparent, faster and more cost-effective alternative to legacy financial institutions (FIs. Businesses will soon have access to Airwallex’s full product suite being progressively rolled out in the market — corporate and employee cards in multiple currencies, spend management, and online payment capabilities. Airwallex offers a modern technology stack and financial infrastructure that enables businesses of all sizes to operate internationally. The company’s cross-border payments and foreign exchange platform offer end-to-end payments and collection solutions.
SINGAPORE
Funding Societies to acquire payments startup CardUp
BNPL player Zip exits Singapore; terminates partnership with Singtel’s Dash
Moolahgo adds payments to Visa accounts
OpenSea collaborates with Singapore-based blockchain firm Klaytn to expand NFTs projects in Asia
Deel launches in Singapore to Empower Organizations to Hire Anyone, Anywhere
Funding Societies to acquire payments startup CardUp
Funding Societies, a digital financing platform for small and medium enterprises (SMEs), said it is acquiring payments startup CardUp for an undisclosed amount in a cash-and-shares deal that is still subjected to regulatory approval. Singapore-based CardUp was founded in 2016. It helps individuals and businesses make and collect payments digitally, including with credit card, even where cards are not accepted. Its capabilities also include invoice automation tools and integrations with third-party business software. Its revenue increased 53 per cent quarter on quarter in Q2 this year. The company recently co-invested in Indonesia’s Bank Index and launched a virtual business card in Singapore. Last month, it launched in Vietnam, marking its fifth market expansion.
BNPL player Zip exits Singapore; terminates partnership with Singtel’s Dash
Australian buy now pay later (BNPL) company Zip has begun winding down its operations in Singapore, along with its tie-up with Singtel’s e-wallet Dash since Jun 20. The e-wallet no longer lists Zip on its website, and the Zip and Dash tie-up web page calls up an error message. The termination of the partnership comes just 4 months after the announcement on Feb 10, or 1 full repayment BNPL cycle. The winding down and termination of the tie-up comes as Australia Stock Exchange-listed BNPL players have taken a beating, with all trading down since the start of the year. Zip is down 88.1 per cent as of Jun 27, 2022.
Moolahgo adds payments to Visa accounts
Singapore-based e-wallet Moolahgo has partnered with Checkout.com to allow users to make cross-border payments directly to Visa cardholders. Moolahgo has created an e-wallet app with numerous payment features, including its cross-border payment service. In 2021, Moolahgo launched an instant funds transfer service to Indonesia e-wallets with just the use of a phone number. Now, Moolahgo launched a new payment service which it calls ‘Pay Now to Card’ in its e-wallet app to allow one to easily send money directly to a credit or debit Visa cardholder as long as the feature is supported by the card issuer. Traditionally only made available by banks, Moolahgo is one of the the first fintechs in Singapore to offer a payment to card service in a digital wallet.
OpenSea collaborates with Singapore-based blockchain firm Klaytn to expand NFTs projects in Asia
The Singapore-based blockchain platform, Klaytn, and OpenSea, the leading cryptocurrency platform, have announced their collaboration that aims to expand NFT projects in Asia. The partnership includes ecosystem grants and conference collaborations among others. The collaboration is a significant step in creating a blockchain for Metaverse, GameFi, and the creator economy. Klaytn, a public blockchain platform based in Singapore, and OpenSea, the world’s leading marketplace, announced their collaboration that aims to maintain the Asian NFT ecosystem. Conference collaborations and ecosystem grants to promote Asian NFT projects among an international audience are also part of the partnership. The largest NFT marketplace in the world supports Katyln along with three other blockchains, Polygon, Solana, and Ethereum. Klaytn is a public blockchain with a focus on gamefi, metaverse, and the creator economy.
Deel launches in Singapore to Empower Organizations to Hire Anyone, Anywhere
Deel, a leading global compliance and payroll solution that helps businesses hire anyone, anywhere, has announced its launch in Singapore. Founded in 2019, Deel enables companies to compliantly hire independent contractors and full-time employees in over 150+ markets, in minutes. Deel makes remote work accessible to all companies, helping businesses easily enter new markets, hire talent wherever they are, at the same time managing teams, contractors, and payroll in multiple markets – all in one centralized platform.
CHINA
Tencent Launches Extended Reality Unit to Tackle the Metaverse Market
Chinese tech giants vow to stop NFT secondary trading
China approves plan to support development of fintech sector
Tencent Launches Extended Reality Unit to Tackle the Metaverse Market
Tencent, the Chinese technology and entertainment giant, announced the creation of its own metaverse-driven division. The division, named the extended reality unit, will be the one tasked with encompassing all metaverse-driven efforts, including hardware and software developments. According to reports, the company aims to employ over 300 in this unit, with Tencent giving it big importance even among executing cost-cutting measures.
Chinese tech giants vow to stop NFT secondary trading
China’s technology giants including Tencent Holdings and Ant Group have signed a pact to stop the secondary trading of digital collectibles and “self-regulate” their activities in the market. The companies were among 30 firms and institutes that have agreed to the Digital Collectible Industry Self-Discipline Development Initiative in which they will help prevent secondary trading and speculation in digital collectibles. The initiative was led by the Chinese Cultural Industry Association and other signatories included Baidu and JD.com.
China approves plan to support development of fintech sector
China will step up the supervision of large payment firms to ward off systemic financial risks and will support platform companies in servicing the real economy. China will push large payment firms and fintech platforms to return to their roots, and will look to better coordinate supervision between various regulatory bodies. The country will also strengthen the supervision of financial holding firms and of platform firms participating in financial activities. Beijing has in recent months softened its stance over a wide-ranging crackdown that started in late 2020 with Chinese authorities abruptly pulling the plug on fintech giant Ant Group’s mega IPO and later expanded to multiple industries, including technology, education and property. Ant has been working with financial regulators for months on a broad revamp and Reuters reported last week, citing sources, that China’s central bank had accepted Ant Group’s application to set up a financial holding company, a key step to finish the restructuring and reviving its stock market debut.
ASIA
Stablecoin implosion shows it has ‘no role’ as a form of money, says Bank of International Settlements’ Asia chief
India proposes tougher IT outsourcing rules for banks
Volt, Australia's first online-only bank, shuts down due to fundraising woes
SoftBank opens virtual shop in Zepeto
Payoneer partners with EC21 to grow Korean SMBs Globally
In Indonesia, ‘pay later’ services leave some drowning in debt
According to Bank of International Settlements (BIS), the recent collapse in the value of stablecoins shows they are ill-suited as a form of money and that their attempt to piggyback on money issued by central banks does not give them the stability their name suggests. Despite stablecoins differing from cryptocurrencies such as bitcoin and ethereum in that their value is pegged to another asset, often a fiat currency or a commodity, which theoretically making them immune to wild price swings, is not spared such as in the case of algorithmic stablecoins such as TerraUSD, the link to the value of the underlying asset can be somewhat tenuous and, as the recent collapse demonstrated, fragile. In the bank’s annual economic report released this week, it predicted that central-bank digital currencies will form a key plank of the future monetary system.
India proposes tougher IT outsourcing rules for banks
India's central bank, the Reserve Bank of India (RBI), is set to introduce new rules for IT outsourcing within the financial services sector. The draft rules have been issued in reaction to a series of technical glitches within India's banking market and concern at the growing dependency on third party service providers. The draft guidelines cover the management of outsourcing-related concentration risk and call for periodic assessment of outsourcing by foreign IT service providers. With banks increasingly relying on third party services for their IT and IT enabled services, the whitepaper proposed that banks should ensure that outsourcing arrangements neither diminish its ability to fulfill its obligations to customers nor impede effective supervision by the supervising authority.
Volt, Australia's first online-only bank, shuts down due to fundraising woes
Volt Bank, the first exclusively online bank to gain an Australian banking licence, said on Tuesday (Jun 28) it would shut down, returning deposits, and selling its mortgage book after failing to raise sufficient funds to support the business. Its collapse is a further blow to a business model that the Australian government and regulators promoted heavily after a 2018 inquiry into misconduct in the finance industry led to a loosening of rules for new banking entrants. The company had A$113 million (S$108 million) in deposits and A$80 million of home loans as of April, according to government data, a tiny fraction of the A$3 trillion mortgage market.
SoftBank opens virtual shop in Zepeto
Japanese telecom operator SoftBank had established a virtual shop at Naver Z’s metaverse platform called Zepeto. SoftBank set up a digital service center for customers, who are required to use their avatars to visit there. SoftBank follows suit of other global corporations, including Starbucks, Nike, Hyundai Motor, and Samsung Electronics. They also built their presence there. In addition, K-pop stars like BlackPink held virtual events on the Zepeto platform, which attracted more than 300 million subscribers over the past four years. It is a global platform as less than 10 percent of them are Korean users.
Payoneer partners with EC21 to grow Korean SMBs Globally
Payoneer, the commerce technology company powering payments and growth for the new global economy, and EC21, a Korean-based global B2B marketplace, have partnered to support the cross-border business of Korean SMBs. Under this partnership, EC21’s billing system will integrate Payoneer’s ERP API service. This solution enables Korean SMBs to manage their Payoneer accounts, analyze their revenue, and send and receive payments in over 190 countries and territories, all directly from within the EC21 platform. EC21 is one of Korea’s largest B2B platforms, serving 90,000 Korean SMBs and 2.5 million SMBs around the world who market and sell over seven million products in the online marketplace.
In Indonesia, ‘pay later’ services leave some drowning in debt
BNPL, which lets customers pay for goods in instalments at varying rates of interest, has helped to plug a significant lending gap in Indonesia. Credit card penetration in the country is notoriously low, sitting at a meagre 6 percent in 2021, with nearly 65 percent of Indonesia’s 275 million population remaining unbanked. As the country’s population has moved increasingly online in recent years, digital payment methods like BNPL have experienced a surge in usage. Indonesia’s mobile internet penetration, at 68 percent in 2021, is now among the highest in the region and is projected to hit 79 percent by 2025. Credit card applicants in Indonesia are typically required to provide proof of monthly earnings along with a healthy credit score, earns $95-$300 a month writing for a content provider website.
BLOCKCHAIN - CRYPTO - DIGITAL ASSETS - DE FI
ANZ’s stablecoin used to buy tokenized carbon credits
BIS proposes caps on bank bitcoin holdings
China’s WeChat blacklists accounts tied to crypto, NFTs
Reserve Bank of India launches blockchain trade financing project
ANZ’s stablecoin used to buy tokenized carbon credits
ANZ’s stablecoin A$DC has been used to buy Australian tokenized carbon credits, marking another critical test of the asset’s use cases in the local economy. In March, the “Big Four” bank became the first major Australian financial institution to mint its own stablecoin after overseeing a pilot transaction worth $20.76 million, or 30 million Australian dollars (AUD), between Victor Smorgon Group and digital asset manager Zerocap. ANZ’s stablecoin is fully collateralized by AUD held in the bank’s managed reserved account. So far, A$DC transactions have primarily been conducted over the Ethereum blockchain.
BIS proposes caps on bank bitcoin holdings
The Basel Committee on Banking Supervision today issued a second public consultation on the prudential treatment of banks' cryptoasset exposures. The basic structure of the proposal in the first consultation is maintained, with cryptoassets divided into two broad groups: Group 1 includes those eligible for treatment under the existing Basel Framework with some modifications. Group 2 includes unbacked cryptoasset and stablecoins with ineffective stabilisation mechanisms, which are subject to a new conservative prudential treatment. The updated proposals provide more detail on the proposed standard and include new elements such as an infrastructure risk add-on to cover the new and evolving risks of distributed ledger technologies; adjustments to increase risk sensitivity; and an overall gross limit on Group 2 cryptoassets.
China’s WeChat blacklists accounts tied to crypto, NFTs
Chinese social media app WeChat is reportedly banning accounts associated with cryptocurrency and NFTs. None of the over 1 billion WeChat users will be allowed to discuss anything related to digital assets. The details of the ban apparently indicate that any public account that works with crypto or NFTs will be “shadowbanned,” or they won’t be able to be engaged with anymore. The recent attention might come from the fact that NFT platforms have increased from 100 to over 500 this year. While China had put stringent regulations against any kinds of digital assets, it had been looking more into central bank digital currencies (CBDCs). But the Chinese government hasn’t looked favorably on crypto. China, once the hub for crypto mining, has banned everything to do with mining — sending the miners to various other countries like Iran, Kazakhstan and the U.S., with many of these countries beginning to embrace the digital assets.
Reserve Bank of India launches blockchain trade financing project
The Reserve Bank of India (RBI) has launched a blockchain-based trade financing pilot project. The project is launched in collaboration with lenders including HDFC bank, ICICI Bank and State Bank of India, among several others. Belgium-based SettleMint, US-based Corda Technologies and IBM are providing technology support for the project driven by the central bank’s Innovation Hub in Bangalore. The central bank’s project hopes to integrate blockchain technology into the core banking system to prevent letters of credit fraud. Letters of credits serve as financial contracts between a bank and a beneficiary that guarantees transactions are made when agreed conditions are met. The pilot project, called ‘proof of concept’ in industry parlance, has begun with banks to run blockchain-backed systems to issue digital letters of credit. Blockchain’s immutability could be used to mitigate tampering of documents recorded on the digital ledger.
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