Asia Payments Research

In recent years, Asian countries have begun experimenting with instant cross-border payments on alternate payment rails, as covered in depth in a recent white paper by Kapronasia and ACI Worldwide. The idea is to enable instant, affordable and transparent payment flows using state-of-the-art digital technology. While much of the activity has been in Southeast Asia, India is an important player in this space as well given the prominence of its United Payments Interface (UPI) platform. The advent of the link-up between Singapore’s PayNow and UPI – slated to go live by July 2022 – marks an important step forward for real-time cross-border payments in the region.

Jakarta-based Xendit is Southeast Asia’s latest fintech unicorn, hitting a US$1 billion valuation after a Series C fundraising round that raised US$150 million led by Tiger Capital Management with participation from returning investors Accel, Amasia and Goat Capital. It has now raised a total of US$238 million. Xendit is best known for its digital payments infrastructure.

Singapore-based Nium became Southeast Asia’s first B2B payments unicorn in late July following a series D funding round that raised more than US$200 million. Nium is using that substantial capital injection to support an ambitious international expansion plan that includes the United States, Europe and India.

September 14 2021

Why did PayPal acquire Paidy?

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PayPal has long been one of the world’s preeminent online payment companies, but to stay at the forefront of the industry it needs to capture new market segments and build a larger presence in Asia Pacific, the fastest-growing region for digital finance. Targeted acquisitions will be integral to PayPal’s strategy, hence the recent purchase of the Japanese buy now, pay later (BNPL) platform Paidy for US$2.7 billion.

Ant Group-backed Mynt has grown expeditiously thanks to the success of its e-wallet GCash in the Philippines. In January, Mynt closed a funding round that raised US$175 million and brought the company close to unicorn status. In late July, Mynt’s chief commercial officer Frederic Levy told Nikkei Asia that the company was aiming to become a “double unicorn” – with a valuation of US$2 billion. But it is unclear if Mynt can maintain the same level of growth now that the Philippines has five genuine digital banks.

With the Australian buy now, pay later (BNPL) segment increasingly crowded, some of the biggest players are searching for greener pastures overseas. While Afterpay has been the most aggressive in terms of global expansion, its rival Zip (Australia’s No. 2 pure-play BNPL firm) is catching up. Having already expanded to New Zealand, the U.S., Canada, Mexico and the UK, Zip is now foraying into Africa with the acquisition of South African payments startup Payflex.

The super app trio of Grab, GoTo and Sea is growing increasingly dominant in Southeast Asia, but not yet in Vietnam. In fact, it is the homegrown MoMo which leads Vietnam’s e-payments market. MoMo says it has a 60% market share and processes US$14 million annually for 25 million users.

Not every tech company is cut out to be a fintech. Even the super apps that have bet everything on a fintech transformation will agree with that statement: They just will insist their particular business model is a winner. Not gaming hardware maker Razer though. The Hong Kong-listed firm is the latest non-financial company to have second thoughts about a fintech foray, pulling the plug on its Razer Pay e-wallet and card after failing to win a digital bank license in Singapore.

Move over Grab and GoTo: There is a new Southeast Asian unicorn in town. The rapid ascendancy of Singapore-based payments startup Nium, which reached a US$1 billion valuation following a Series D round that raised more than US$200 million, shows that there is more to Southeast Asian tech than consumer-oriented super apps.

Just when buy now, pay later (BNPL) had seemingly reached an apex in Australia, Jack Dorsey’s Square buys Afterpay for US$29 billion, the largest M&A deal in Australian history. Anyone who thought Afterpay would be easily surpassed by deep-pocketed global payments giants like PayPal or Australia’s own banking heavyweights will have to think again.

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