What The FinTech #158 - 6 Nov 2023
🚀 Welcome to What The Fintech - your weekly dose of electrifying insights, game-changing breakthroughs, and dazzling trends from the pulse-pounding world of fintech across Hong Kong, Singapore, China, and Asia! As your go-to source for top headlines and industry insights, we're here to keep you updated on the latest innovations revolutionizing the way we think about finance and technology in this dynamic region.
Prepare to embark on a thrilling adventure through the digital landscape as we explore the ground-breaking developments, visionary startups, and trailblazing trends that are shaping the future of finance in Asia and beyond. So buckle up, grab your favorite beverage, and get ready to ignite your curiosity with the latest and greatest from the fintech universe! Let's dive in! 🌊💡💸
***
🌐 Discover What The Fintech on Substack and Elevate Your FinTech Game! 🚀💡💸
We've landed on substack! Click "subscribe" to follow our captivating newsletter and stay in the loop with the latest fintech marvels. Don't miss out - join the fun and level up your fintech knowledge today! 🎉🔥🌟
-
What The FinTech #68: Ever wondered how open banking might revolutionize your financial experiences? Look no further! 🌐
I had the pleasure of sitting down with the dynamic duo, Jessica Liu and Ankit Suri of Planto, to unpack the transformative world of open banking and the game-changing #IADS initiative by Hong Kong Monetary Authority (HKMA). 🎤✨
From understanding the very essence of open banking to diving deep into #Planto's cutting-edge solutions and their position in this ecosystem, this episode is a roller-coaster of insights! 🧠🔍
🔹 What sets Planto apart in the open banking sector?
🔹 How are traditional banking models being reshaped?
🔹 Could there be potential hurdles in the open banking vision?🔹 And what's the buzz about data providers possibly charging for API access?
-
🎙️🎧 Dive into previous sessions for a mix of insights and exciting discussions. 🎥🚀 Stay tuned for what's coming, and as always, your likes, give a 5⭐, shares, and subscribes mean the world! Keep the fintech vibes strong! 💪🎉
Spotify ⭐⭐⭐⭐⭐
Apple Podcast ⭐⭐⭐⭐⭐
Google Podcast ⭐⭐⭐⭐⭐
Amazon Podcast ⭐⭐⭐⭐⭐
-
What was the FinTech this week in: 📰
HONG KONG
Hong Kong and Thailand to set up cross-border payments link
Visa completes digital Hong Kong dollar pilot test with local banks
JCB expands partnership with Stripe to boost e-commerce merchant acceptance in Europe, Singapore and Hong Kong
WeChat Pay HK launches exclusive rewards for Hong Kong shoppers in Luohu Dongmen
Hong Kong and Thailand to set up cross-border payments link
The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand will launch a new bilateral cross-border payments link from December 4. The new infrastructure will connect the two jurisdictions’ instant payment systems – Hong Kong’s Faster Payment System (FPS) and Thailand’s PromptPay. Hong Kong travellers in Thailand will be able to make purchases at over 8 million PromptPay merchants in Thailand by scanning a QR code using their mobile phones. Yue said this will save them the hassle of exchanging Hong Kong dollars into baht. In turn, Thai visitors to Hong Kong will be able to use Prompt Pay to pay at FPS merchants in Hong Kong that accept QR payments.
Visa completes digital Hong Kong dollar pilot test with local banks
Payment processor Visa has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) pilot program with HSBC and Hang Seng Bank. The e-HKD program involves tokenization of deposits, where the money deposited with a bank is minted on the firm’s own blockchain ledger with the backing of its balance sheet. In addition, Visa said during the pilot that its platform was able to function 24/7, besting traditional payment systems that would not operate after hours or on weekends. For the next steps, the payment processor says it’s exploring tokenized asset markets and programmable finance. “For example, in this pilot’s ‘Property Payments’ use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimizing lag time in the closure of the process.
JCB International Co., Ltd., the international operations subsidiary of JCB Co., Ltd., and Stripe, a financial infrastructure platform for businesses, today announced that they will expand partnership for Europe, Singapore and Hong Kong. The collaboration will provide new growth opportunities for all of Stripe’s e-commerce merchants in those areas by welcoming JCB’s valued cardmembers. In this latest extension, Stripe has also added JCB to its default payment scheme for merchants in the UK and Ireland in August 2023, and for merchants in other European countries, Singapore and Hong Kong in October 2023. With today’s updates, JCB and Stripe are making it easier than ever for global businesses to sell to customers in Japan and across Asia.
WeChat Pay HK launches exclusive rewards for Hong Kong shoppers in Luohu Dongmen
Shenzhen’s Luohu Dongmen Pedestrian Street has become a popular destination for day trips among many Hong Kong residents, offering a wide range of shopping malls, popular food options, and specialty stores. Moreover, its proximity to the Luohu Port makes it easily accessible, with just a two-stop ride from Luohu Station to Laojie Station. To enhance the shopping experience for Hong Kong shoppers, WeChat Pay HK has recently introduced exclusive rewards for those who use Hong Kong dollars for their purchases in Luohu Dongmen. The rewards include an electronic cash voucher package, coupons from various department stores, over a thousand gifts, and special rewards for new users. This initiative is a collaboration between WeChat Pay HK and the Luohu District Industrial and Information Bureau in Shenzhen, aiming to encourage more Hong Kong shoppers to explore the offerings in Luohu Dongmen.
SINGAPORE
Singapore reshapes its crypto hub after Three Arrows, Terraform setbacks
Fintech Fave joins MAS to support interoperability across Singapore’s QR payments
Singapore’s latest QR payments test SGQR+ will streamline payment acceptance for merchants and substantially increase the number of merchant acceptance points
Singapore reshapes its crypto hub after Three Arrows, Terraform setbacks
During the great pandemic-era Bitcoin boom, Singapore established itself as one of the hubs of the cryptocurrency industry, drawing in entrepreneurs and investors from around the world. The Terraform Labs mastermind Do Kwon fled from Singapore to Europe via Dubai and was jailed in Montenegro over a fake passport. The claimed benefits of such digital ledgers include more efficient payments as well as making illiquid assets easier to buy and sell by tokenizing them. Low taxes and a pro-business stance make Singapore attractive to funds, trading firms and wealth managers that want to utilise crypto. The city-state managed S$4.9 trillion ($3.65 trillion) of assets in 2022, the majority from abroad, MAS data show. By next year, Singapore will have one of the “toughest regimes on cryptocurrency when it comes to consumer protection” but also “one of the most facilitative regulatory regimes” for aspects like tokenization.
Fintech Fave joins MAS to support interoperability across Singapore’s QR payments
Fave, a consumer FinTech platform in Southeast Asia and India, has announced its participation in the SGQR+ POC led by the Monetary Authority of Singapore (MAS). The introduction of SGQR+ now aims to enhance interoperability in QR payments by letting merchants register with a single preferred merchant acquirer and accept a wide array of digital payments from customers who use any payment app that has enabled SGQR transactions. Seamless cross-border interoperability delivered through SGQR+ will also ensure that merchants will be able to accept digital payments from overseas visitors. There are two tracks under the SGQR+ POC; the Master Merchant Acquirer track by NETS Group and the Interoperable Switch track by Liquid Group. Fave is participating in the Interoperable Switch track by Liquid Group. Fave merchants such as Jollibee, Dian Xiao Er, Sushiro and more will be able to expand their QR payment acceptance to include participating payment apps.
Stores in Singapore will be able to accept a few dozen digital payment methods with a single QR code from the start under a trial to be launched on Wednesday by the central bank, which intends to reduce hassle for merchants and shoppers as digital apps proliferate. Singapore launched a single QR code called SGQR in 2018, combining multiple payment QR codes. While the scheme now has more than 30 participating members from payment providers and financial institutions, merchants had to sign up with each financial institution to accept payments through the unified QR code. The systems link payments between financial institutions through the unified QR code. SGQR+ will streamline payment acceptance for merchants and substantially increase the number of merchant acceptance points for local and foreign consumers, enhancing their ability to use their preferred digital payment method. In recent years, QR code payments have expanded rapidly in Southeast Asia, thanks to players like Grab and Indonesia’s GoTo offering merchants cheaper alternatives to installing credit card terminals. Merchants often must sign up for multiple services and display each QR code at the checkout counter so customers can scan one to make a payment.
CHINA
China has completed testing for its privacy-first CBDC blockchain ‘mBridge’
China Construction Bank & Thunes team to offer cross-border payments
China’s Tencent has integrated 180 of the company’s business areas with its AI model
China has completed testing for its privacy-first CBDC blockchain ‘mBridge’
Chinese official reveals details of its blockchain system for Currency Bridge, enabling atomic and cross-border payments with simultaneous forex settlement. During a key session at the FinTech Symposium in Hong Kong’s Science and Technology Week, the lead of the Digital Currency Institute of the People’s Bank of China Mu Changchun detailed the latest developments in the technical and privacy frameworks of their central bank digital currency (CBDC) project, known as the ‘Money Bridge’. The ‘Money Bridge’ project will be based on a proprietary blockchain developed exclusively for this initiative, dubbed the mBridge Ledger (mBL). This ledger will deliver crucial services such as simultaneous foreign exchange and payment settlements, wallet administration, and safeguarding privacy.
China Construction Bank & Thunes team to offer cross-border payments
Thunes, the global B2B payment infrastructure platform, and China Construction Bank (CCB), a commercial bank in China, have announced a partnership to collaborate on cross-border payments. With the new relationship, Thunes will support the bank to enable international payment acceptance for Chinese small to medium-sized businesses (SMBs) and introduce outbound cross-border payments for CCB’s consumers, with both products expected to be launched in 2024. China Construction Bank, headquartered in Beijing, is a large-scale commercial bank in China. The bank provides customers with comprehensive financial services, including corporate finance, personal finance, and treasury and asset management. Thunes is a B2B payments company building global infrastructure by enabling seamless, instant, and transparent money movement. Its modular capabilities empower its customers to pay, accept, exchange, and comply, closing the gap between payment systems in developed and emerging markets worldwide.
China’s Tencent has integrated 180 of the company’s business areas with its AI model
Chinese social networking and video gaming giant Tencent Holdings has baked its ChatGPT-like generative artificial intelligence (AI) model into scores of products and services as competition in the red-hot sector continues apace in the world’s second largest economy. The Shenzhen-based firm’s Hunyuan large language model (LLM), the technology that underpins OpenAI’s ChatGPT and similar products, is now integrated into more than 180 services. Tencent’s move to make its AI omnipresent across all of its product offerings reflects a trend that has already taken hold among domestic rivals and foreign tech giants. Baidu has made its Ernie Bot central to its cloud computing ambitions. Alibaba Group Holding, owner of the South China Morning Post, integrated its Tongyi Qianwen model into products including e-commerce platform Taobao and the Slack-like app DingTalk. Microsoft, a backer and user of OpenAI’s models, and Google have been integrating AI into many of their own products such as search and office suites. Microsoft has been especially active in promoting its AI services to companies in Asia.
ASIA
Instarem relaunches cross-border payments services in India on catering to individuals seeking affordable overseas education payments
Why some early-stage Southeast Asia VCs may not survive the looming cull
Card firms in Korea are increasingly hesitant over Apple Pay
UnionPay cardholders can easily pay at all QR merchants in Malaysia now
Razorpay expands its footprint in Malaysia
Vietnam sees ebullient growth in digital banking, payment channel
Grab adds MoMo as payment option in Vietnam
Vietnam’s e-commerce market: Shopee reports high growth rate, Tiki stands still
Visa set to transform payments in Vietnam with new innovation hub
ADB, Switzerland aid fintech development in Vietnam
Instarem, an overseas payment solution, has relaunched its digital remittance services in India. This strategic re-entry into the Indian market aims to deliver a smooth remittance experience, with a focus on catering to the requirements of students and individuals seeking affordable overseas education payments. The Instarem brand, returning to India, is powered by Nium-Forex, an established, regulated provider of financial products and services in India. The new solution offered by Instarem focuses on removing the pain points faced by individuals and students who are trying to find a hassle-free and cost-effective way to finance their education overseas. The new solution liberates its users from restrictive transaction limitations, enabling them to make large payments annually without the necessity of splitting the payment into numerous transactions. This simplifies the process and makes it more economical for their customers.
Why some early-stage Southeast Asia VCs may not survive the looming cull
The venture capital (VC) world in Southeast Asia will go through a culling, in which newer firms currently deploying their first fund may not be able to raise another in the coming years, resulting in their premature death. This reality is the culmination of three factors — too much capital deployment post-pandemic, the plummeting valuations of start-ups, and a climate of caution among investors today. The low interest rate environment of 2020 and 2021 saw high amounts of capital pumped into the VC ecosystem. A CB Insight Report noted a “new all-time high” in global VC activity in 4Q2021 worth US$621 billion ($853.25 billion). Back then, Asia ranked the top region for the number of VC deals, taking up 36% of the global deal share. Start-up valuations were soaring although some businesses being valued in the billions have not yet turned a profit. A record of 23 start-ups in Southeast Asia achieved unicorn status — a term referring to privately held companies valued at over US$1 billion.
Card firms in Korea are increasingly hesitant over Apple Pay
Hesitation over adopting Apple Pay entered a new phase after a parliamentary audit held on Oct. 11 raised concerns about Hyundai Card, which introduced the service at the cost of paying high commission fees to Apple. During the parliamentary audit, Rep. Yun Chang-hyun of the ruling People Power Party said that Apple Pay’s high commission fee could harm customer interests. The exact terms of the agreement between Apple Pay and Hyundai Card have not been disclosed, but the card issuer is widely believed to pay Apple a 0.15 percent fee for each Apple Pay transaction. This fee is considerably higher when compared to the 0.03 percent commission collected by Apple Pay in China and 0.05 percent commission in Israel. Despite the relatively high commission fee, Hyundai Card partnered with Apple to gain a first-mover advantage as it could contribute greatly to attracting new — and potentially young — iPhone users. Hyundai Card’s desperation was hinted at when it gave up its exclusive partnership with Apple Pay during the financial authority’s review process to finally earn the permit to introduce the service in Korea.
UnionPay cardholders can easily pay at all QR merchants in Malaysia now
Now, all QR merchants in Malaysia can service consumers with UnionPay, building on the collaboration between UnionPay International (UPI) and Payments Network Malaysia Sdn Bhd, or PayNet, Malaysia’s national payments network. This cross-border QR code linkage enables the full acceptance of the UnionPay App (Chinese-mainland, Hong Kong and Macao versions) and Chinese-mainland bank apps connected to the UnionPay App Network Payment Platform at the QR merchants in Malaysia. As the designated operator of DuitNow QR, Malaysia’s national QR code standard, PayNet works with all QR merchants in the country totaling over one million, which can service UnionPay cardholders without any adaptation of the systems or the QR code. Besides, newly-enrolled QR merchants in Malaysia will support UnionPay-powered wallets by default.
Razorpay expands its footprint in Malaysia
India-based fintech company Razorpay has expanded in Malaysia by obtaining a licence to acquire merchants through Curlec, the new non-bank member of PayNet. This membership is set to allow Curlec to drive nationwide adoption of real-time payments through DuitNow, the Malaysian payment solution that was designed to enable real-time payments between locally registered bank accounts. The product also gives users the capability to transfer and receive funds instantly by using their mobile device and their national identification number, without the need for a bank account number. The Curlec by Razorpay will be leveraged in order to build a safe, customer-first, and efficient payment infrastructure for clients and individuals in Malaysia. In addition, Curlec aims to accelerate the process of developing a cashless society in the region.
Vietnam sees ebullient growth in digital banking, payment channel
There is an increasing preference for digital banking and new payment modes such as mobile banking apps, e-wallets, QR code-based payments, e-commerce payment platforms and mobile wallet debit or credit cards among Vietnamese consumers. he Vietnamese consumers become more digitally proficient, there is a surge in the use of mobile apps; however, when it comes to complicated transactions such as high-value transactions, restructuring of bank loans and insurance purchase, they prefer offline channels. Every four among five consumers use e-wallet at least once a week and introduce the wallet to others. Momo was the most used e-wallet by Vietnamese, followed by ZaloPay and VNPay. Vietnamese consumers are more upbeat about the financial future than those in other countries. Some 76% of the respondents expect to be better off in June next year, while the figures in Indonesia and Thailand are 74% and 68%.
Grab adds MoMo as payment option in Vietnam
Grab Vietnam has integrated MoMo, a local e-wallet and payments app, into its cashless solutions. This means that the firm’s payment solutions are now available within the Grab app for Vietnamese users, including its e-wallet service, linked bank accounts, and its buy now, pay later offering. MoMo established a similar tie-up with Grab rival Gojek. It has also partnered with other major names such as Western Union and Apple. MoMo recorded US$355 million in revenue for 2022, growing 18% year on year. This came with a 45.7% increase in gross profit over the same period.
Vietnam’s e-commerce market: Shopee reports high growth rate, Tiki stands still
A report on Vietnam’s e-commerce market in the third quarter was conducted independently by Metric based based on official figures collected from the five e-commerce platforms, including Shopee, Lazada, SenDo, TikTok Shop and Tiki. The total revenue of the Vietnam’s e-commerce market reached VND63 trillion in the third quarter 2023 with 443 stalls having orders and 602 million product units successfully delivered. The figure demonstrated a 54.42 percent increase compared with the same period 2022. Of the e-commerce platforms, TikTok Shop caught special attention from the public with its rapid expansion. Its market share jumped from 3 percent in the third quarter 2022 (the same as Tiki’s) to 16 percent in the third quarter in 2023. Meanwhile, Shopee saw its market share slightly decrease from 72 percent to 69 percent, and Lazada from 21 to 14 percent. However, compared with the second quarter this year, Shopee was the only platform which obtained growth (from 63 percent to 69 percent, with VND43.713 trillion). Meanwhile, Lazada’s market share dropped from 18 to 14 percent (VND8.768 trillion), TikTok Shop from 18 to 16 percent (VND10.122 trillion), while Tiki made no headway with just one percent (VND599 billion) and SenDo VND29 billion. However, in general, the third quarter witnessed outstanding revenue growth of the top five e-commerce platforms, at 22.66 percent, a very encouraging result in the context of current upheavals. The report also pointed out that in the first nine months of the year, the total revenue of the Vietnam’s e-commerce market reached VND163 trillion, which means that the nine-month revenue was higher than the revenue of the whole year of 2022 (7 percent, or VND10 trillion). The high revenue of VND25 trillion from TikTok Shop made a contribution to the growth. Notably, in the first nine months of 2022, TikTok Shop was not present in the market. If calculating the revenue of the platforms Shopee, Lazada, Tiki and Sendo, the growth rate over the same period would be 33 percent.
Visa set to transform payments in Vietnam with new innovation hub
Visa has announced the opening of its latest Innovation Space hub in Hanoi’s Hoa Lac Hi-tech Park (NIC). Visa’s Innovation Space in the NIC will produce payment technologies that will introduce various quality of life solutions for the Vietnamese population, particularly in public transportation, home shopping, as well as mixed reality retail experiences. In the example of urban traversal, new payment experiences in public transportation offered by Visa will allow commuters to tap their Visa cards on specifically-designed bus touchpads, removing the need for physical bus tickets. The roll-out phase of this service will be handled by Visa’s Urban Mobility Team, which will also offer guidance and assistance for similar contactless payments public transport projects in the future.
ADB, Switzerland aid fintech development in Vietnam
The Asian Development Bank (ADB) and the State Bank of Vietnam (SBV) on October 25 held a kick-off ceremony marking the implementation of the Swiss-funded 5 million USD technical assistance, which aims to nurture financial technologies (fintech) serving the improvement of financial inclusion in Vietnam. The technical assistance is crucial in helping advance the access to finance of small- and medium-sized enterprises (SMEs) and women-owned and women-led SMEs (WSMEs) in particular via supporting the SBV in developing and implementing the regulatory framework for strengthening the digital finance sector, ensuring safe market conduct and a thriving ecosystem. Additionally, it will build the capacity for relevant government ministries and members of fintech and banking associations and assist selected commercial banks in developing digital banking. This, in turn, will help improve the quality and diversification of fintech services and products, contributing to boosting the national financial inclusion. Through fostering Vietnam’s fintech industry and digitalisation of the banking sector, the programme offers new opportunities for SMEs to improve their access to financing.
-
And that's it for this week's What The Fintech 🎉 We hope you've found our selection of Asia's fintech trends, innovations, and insights both informative and valuable. Your feedback and suggestions are important to us, so please share your thoughts to help us curate content that matters most to you. 🌟
Interested in sponsoring our newsletter? Don't hesitate to reach out – we'd love to discuss partnership opportunities! 💼
Stay connected and engaged by following me on LinkedIn, Instagram, Twitter, YouTube, and Telegram. Catch the annotated edition of this newsletter on Monday or Tuesday, and don't miss my daily tweets @medhy_souidi for the latest fintech updates! 🚀🔥💸
Until next week, keep exploring the future of finance together! ✨
Your Fintech Navigator,
Medhy
🔗 Follow me on LinkedIn / Instagram / Twitter / YouTube / Telegram