Stripe may be the biggest fintech to fly under the radar in Asia Pacific. In private markets, its valuation is reportedly close to US$100 billion, up from about US$35 billion in April 2020. The San Francisco-based merchant payments provider saw its fortunes soar during the pandemic as its many North American customers moved online. It is now looking east to fuel its next stage of growth, including China, India, Southeast Asia and Australia. In 2020, Stripe increased its staff in the APAC region by 40% to more than 200.

PayPal is a payments giant with super app ambitions but a small footprint in Asia. Indeed, although PayPal has been present in many Asian markets for ages, it is not a market leader in any of them. In fact, to date, it is more notable for reducing its presence - exiting the domestic payments business in both Taiwan and India, for instance - than scaling up. Becoming a bigger player in Asia will not be easy for the US$340 billion company, despite its vast resources.

Afterpay is the world's foremost buy now, pay later rising star. The Australian company has been on an unmatched hot streak, its share price surging by about 300% in 2020. At roughly AU$134, Afterpay is trading 27 times its price-to-earnings ratio. In the six months to December 31, Afterpay's overall income rose 89% to AU$420 million, even as losses reached AU$76.5 million. Merchant growth in North America was 141%. The company's active users rose 80% year-on-year to 13.1 million. It seems that nothing can slow the company's ascent, with the possible exception of tighter regulation.

It seems that almost every plucky fintech in the cross-border payments space seeks to challenge SWIFT these days. Airwallex is perhaps the best known. The Hong Kong-headquartered (but Australia-founded) unicorn boldly proclaims that it wants to rejig global payments rails at SWIFT's expense. Then there is Lightnet, which is only slightly less ambitious. Lightnet aims to dominate B2B remittances in Asia with none other than cryptocurrency, which it says will render obsolete traditional global payments methods like SWIFT and Western Union. Lightnet is focused on making cross-border payments more economical by trimming the number of intermediary parties from about five to just the sender and receiver. The company expects costs to be further trimmed as its network grows.

India's payments market is more competitive than ever. While Walmart-backed PhonePe and Google Pay remain dominant for now, WhatsApp Pay may eventually chip away at their market share. With 400 million users of its messaging app in India, the Facebook-owned company could potentially channel the network effect to its advantage. But WhatsApp could be tripped up by fallout over its updated data privacy policy. 

The clock is ticking for a Grab exit. Southeast Asia's most valuable startup has been in business now for almost nine years. It has been losing money that entire time. To be sure, Grab has seen its user base, valuation and revenue grow exponentially over that time. The company has evolved from an Uber lookalike into an aspiring super app betting on digibanking to deliver it from the red ink into the black. That could be easier said than done.

While many countries have experienced a surge in cashless payments during the pandemic, for the Philippines fast-tracking the financial sector's digital transformation is a game changer. The reason is that the Philippines is a fast-growing, highly connected and populous country (108 million people) that lacks payments incumbents. There are no entrenched credit card companies in the market. That means ascendant e-wallets like Mynt's GCash have the chance to become dominant players in one of Southeast Asia's largest emerging markets.

In Vietnam's fiercely competitive e-wallet market, Momo stands out. The company has attracted deep-pocketed backers including private-equity firm Warburg Pincus and Silicon Valley fund Goodwater. Momo has is Vietnam's largest e-wallet by users, with 25 million, which it plans to double in two years. Momo recently completed a mammoth funding round that reportedly raised US$100 million that the company will use for strategic acquisitions and to enhance its app with biometrics technology.

Buy now, pay later (BNPL) is taking the payments world by storm, from the advanced economies to emerging markets. There seems to be a universal appeal for consumers - whether they are accustomed to using credit cards or not - to interest-free installment payments. That holds particularly true during the pandemic, when lenders control credit tightly. In India, some of the largest BNPL players include the unicorn Pine Labs, Vivifi (which operates Flexpay), Simpl and ZestMoney. All of these firms saw growth in their BNPL products in 2020.

Not so long ago, Ant Group looked set to build a digital finance empire in Asia. Ant has a foothold, in one form or another, in every major Asian economy. The company has invested in e-wallets across Southeast Asia. It operates fledgling digital banks in Hong Kong and Singapore, the region's two key financial hubs. It is a major backer of India's largest fintech unicorn, Paytm. Ant even has fintech investments in Bangladesh and Pakistan. Yet in retrospect Ant may have overextended itself internationally, confident that its ascent was insuperable even as regulatory problems mounted at home.

WhatsApp has something most other would-be super apps do not: the stickiness of an immensely popular messaging service. And unlike China's WeChat, WhatsApp is a global phenomenon, with large user bases in a diverse array of countries: India, Indonesia, Brazil, South Africa and the United States to name a few. Having eschewed advertising, WhatsApp hopes to monetize all those users with digibanking and e-commerce services. If WhatsApp becomes a global one-stop shop for communication, shopping and banking it will be the only app of its kind.

Afterpay has to be feeling pretty good heading into 2021. It has become one of the largest buy now, pay later (BNPL) firms in the world and is growing fast just as the sector hits its stride. BNPL is not a new idea, but Afterpay has repackaged it neatly: four interest-free installments with no fees at all for customers as long as they pay on time. Retailers are willing to take on the risk of late or missed payments because Afterpay is bringing in more business for them. The company's sales grew 112% year-on-year in November to a record US$2.1 billion. Its share prices have risen roughly 270% to A$113.29 from A$30.63 when the year began.

South Korea's digital payments market has grown at a brisk clip amid the pandemic. From January to November, contactless payments rose 17% as businesses and consumers shifted to online transactions, according to the Bank of Korea. E-commerce transactions rose 26% during that period. It is against this backdrop that the Korean startup CHAI sees an opportunity for an API that allows online merchants to accept more than 20 payment systems.

E-commerce is an ideal platform from which to launch a digital payments business. Alibaba figured that out early on, launching Alipay back in 2004. Today, it is hard for any e-wallet to become as dominant as Alipay, especially in a market as competitive as Indonesia. Yet Sea Group's ShopeePay is fast becoming one of Indonesia's most popular e-wallets on the back of Shopee's ascension. Shopee was Indonesia's top e-commerce platform by site visits in 2019 and looks set to repeat that feat this year.

Gojek began more than a decade ago as Indonesia's answer to Uber. It since has evolved into a large platform company with super app ambitions. For Gojek, the key to becoming Indonesia's dominant app lies in mass monetization of its e-wallet services. The trouble is, that's easier said than done. Indonesia has a surplus of e-wallets all trying to cash in on the booming segment. User loyalty is shaky.

China is strict about gambling, only permitting it in the special administrative region of Macau. Elsewhere in the country, gambling is illegal. China's restrictions on gambling cover cyberspace too. Yet that ban is hard to enforce, especially as the pandemic has pushed so much economic activity online. According to a recent Caixin report, some of China's largest internet companies have become party to the illegal online gambling ecosystem. The internet giants may not be privy to the illicit transactions, in some cases because of inadequate due diligence.

Grab has long had its eye on Indonesia, the home turf of its rival Gojek and Southeast Asia's largest economy. If Grab is going to be region's dominant super app, it needs to have a strong foothold in Indonesia, which by population is nearly as large as the Philippines, Vietnam, and Thailand combined. By leading a US$100 million Series B funding round in Indonesia's homegrown e-wallet LinkAja, Grab is signaling its intention to challenge Gojek more forcefully in the country's burgeoning digital finance segment.

After years of solid growth, global remittance flows are set to shrink in both 2020 and 2021, weighed down by the pandemic and its associated economic fallout. Asia, one of the fastest growing regions for remittances in recent years, will be one of the hardest hit regions, the World Bank estimates. Remittances in East Asia and the Pacific are projected to fall by 11% in 2020 and 4% in 2021. In South Asia, remittance flows are predicted to fall 4% this year and 11% the following year.

WhatsApp Pay just launched in India for 20 million users. That is big news, given the long and drawn-out waiting period. Indian regulators, however, made a more consequential decision than giving WhatsApp Pay a belated green light, which is overshadowing the app's rollout. The National Payments Corporation of India will restrict the market share of third-party payment applications by capping at 30% the total transaction volume any single digital wallet can process on the preeminent Unified Payments Interface (UPI) platform.

By at least a few metrics, Ant Group-backed GCash is the Philippines' top e-wallet. GCash, a subsidiary of the Globe Telecom-owned fintech startup Mynt, recorded 10 million downloads in the first nine months of the year, more than any other finance app, according to analytics firm AppAnnie. User growth rose 130% over that period. GCash expects transaction volume to reach P1 trillion this year, an amount that it took the company the three previous years combined to reach.

Buy now, pay later is taking the payments world by storm in Europe, the United States and Australia. Firms like Klarna, Afterpay, Sezzle and PayPal (with its "Pay in 4" product) are tapping strong consumer demand for interest-free installment payments. In Southeast Asia, however, BNPL remains at a nascent stage. None of the big BNPL players have launched their services in the region yet. There are some promising local startups though.Singapore-based hoolah is one of Southeast Asia's ascendant BNPL startups. In March, Hoolah raised an undisclosed eight-figure sum in its Series A round. Hoolah will use the cash to expand regionally. Investors participating in the round included venture-capital firm Allectus, iGlobe Ventures, Genting Ventures, former Lazada group CEO Max Bittner, and FNZ CEO Tim Neville.

Hoolah has been in Singapore since 2018 and works with merchants including HipVan, Castlery, Sennheiser and Skin Inc. The firm charges merchant-partners a fee for every successful transaction. Hoolah's BNPL service lets shoppers make purchases in three interest-free monthly installments. The company's key customer segments are youngsters (aged 18-26) who are not yet able to qualify for a credit card, some 26 to 35-year-olds and gig-economy workers. The latter segment likes using hoolah because the workers do not receive fixed salaries.

Hoolah enjoys a first-mover's advantage in Singapore. In an interview with Vulcan Post last year, co-founder and COO Arvin Singh explained why BNPL has been slow to arrive in Southeasts Asia. “There’s a high degree of complexity of achieving a seamless checkout experience while managing a flexible payment solution that includes risk management, consumer payback, direct merchant integration, merchant side funding and the commercials," he said.

In September, hoolah launched its BNPL service in Singapore's physical retail stores, where it sees an opportunity to grow sales as the pandemic eases in the city-state. To use the service, customers scan a QR code at the point of sale with hoolah's app. They then enter the total order amount, which is divided into three monthly payments.

Hoolah launched in Malaysia earlier this year and plans to expand to Hong and Thailand before the end of 2020.

Meanwhile, of the major global BNPL players, Afterpay is likely to be the first to expand to Southeast Asia. The Australian firm is reportedly mulling the acquisition of EmpatKali, which like hoolah is based in Singapore, but is focused on the Indonesia market. EmpatKali has "an established, albeit, very early stage position in Indonesia,” Afterpay's CEO Anthony Eisen told Reuters.

Ant Group's IPO is a big deal. In fact, the listing is expected to raise US$34 billion, would make it the biggest IPO of all time. Ant's valuation based on the pricing will be roughly US$313 billion, similar to Mastercard (US$319 billion) and JPMorgan Chase (US$309 billion). Can Ant justify that valuation? After all, the company derives the vast majority of its revenue from just one market: mainland China. And Ant has long benefited from a dearth of digital competition. Once the IPO is over, Ant will likely use some of the proceeds to fund its expansion in Southeast Asia. Ant has invested in a large number of e-wallets across the region and applied for a digital bank license in Singapore.

TransferWise is one of the few European fintechs making inroads in Asia. That's because the UK-based firm has a coherent Asia strategy: Enhance payments of every stripe - cross-border, domestic, real-time, credit card, e-wallet and more - and enable its partners to integrate the TransferWise open API directly into their infrastructure. TransferWise's APAC headquarters are in Singapore and it operates in Australia and New Zealand as well. The company has inked a deal with Alipay that allows it to begin serving the China market, albeit in a limited manner.

The Facebook-Jio deal appeared to pave the way for the long-awaited launch of WhatsApp Pay in India. Thanks to its US$5.7 billion investment in Reliance's Jio Platforms, Facebook finally had a heavyweight local partner in the subcontinent. Political pressure is mounting on New Delhi to prevent foreign tech giants from dominating the digital economy. The Facebook-Jio deal directly addresses those concerns. Yet, more than four months after India's Competition Commission approved the deal, WhatsApp Pay remains in beta launch.

The fintech narrative has adapted swiftly to the worst public health crisis in a century. Digital banking is now depicted as an epochal shift, driven by drastic pandemic-induced changes in human behavior. In many cases, this is an exaggeration. But some fintech startups, like the newly minted Indian unicorn Razorpay, have turned this crisis into a genuine opportunity. The Bengaluru-based firm raised $100 million in a series D financing round that closed in October, co-led by Singapore’s sovereign wealth fund GIC and Sequoia India, and is now valued at roughly US$1 billion.

Australia's Afterpay is riding high on the BNPL boom sweeping its home market, the United Kingdom and United States. Afterpay is valued at US$23 billion, while its share price has risen about 960% since the ASX bottomed out in March. Both the UK and U.S. are key growth drivers for Afterpay, accounting for 41% of its revenue in FY 2020. Services like Afterpay's are gaining in popularity not only because people are shopping online more often, but also because credit is harder to come by during the pandemic-induced downturn. Some lenders are concerned about the ability of consumers to reliably make payments. As a result, consumers are more apt to be interested in installment payments.

Airwallex is among a handful of loss-making fintech unicorns that has continued to raise vast sums from investors amid the coronavirus pandemic. Established in Australia in 2015 and now headquartered in Hong Kong, Airwallex is set on a bold path of international expansion and plans to use the US$40 million raised in an extended Series D round that closed in September to bring its cross-border payments business to the United States, Middle East and Africa.

Kakao's fintech ecosystem is coming into its own. The key units, the Kakao Pay e-wallet and digital bank Kakao Bank, are both gearing up for IPOs in 2021. Kakao Pay is slated to list first, in what will also be the first time a Korean mobile payments firm goes public. Kakao Pay's IPO is expected raise up to 10 trillion won (US$8.5 billion).

Cracks are gradually appearing in the armor of the duopoly Alipay and WeChat Pay have long enjoyed in China online payments. One after another, large Chinese internet companies are expanding their presence in that segment, from e-commerce giants Pinduoduo and JD.com to travel booking site Trip.com. The U.S.'s PayPal and American Express have also entered the market. The additional competition is long overdue and most welcome.

If ride-hailing companies can aspire to be digital banks and super apps, then perhaps airlines can too. In fact, consumers probably trust airlines with their data more than they do Grab and Gojek. For Malaysia's AirAsia, which lost a record US$238 million in the second quarter, developing new revenue drivers is a necessity as the pandemic keeps international air travel grounded. That's why the company is expanding its fintech services - including possibly applying for a Malaysia digital bank license - and launching an Asean focused super app that covers entertainment, shopping and travel.

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