BUSINESSES are increasingly looking at options to reduce cost and remain competitive in a digital era. And as more SMEs consider the adoption of fintech, firms like MoneyMatch stand an opportunity to grow with the sector.
MoneyMatch is among the first batch of Bank Negara Malaysia’s fintech sandbox. It offers users a cheaper and faster way to transact cross-border money transfer.
“We have over 200 SME clients which transact on our platform monthly,” says chief executive officer Adrian Yap.
MoneyMatch has transacted about RM100mil, which, he notes, is “pretty decent for a fintech startup”. Its next milestone is to hit RM1bil in transaction, which he thinks will take two years.
But it took time for them to get here. Yap acknowledges that convincing SMEs to try out its services was a challenge.
“Every ringgit that flows through our account is a vote of trust. It’s really hard to get people to part with RM35,000 and say, ‘Trust me, I’m a fintech startup, the money will reach the supplier’. It’s a pretty hard ask. It’s easier to get customers to trust a low-risk purchase, like applying for a credit card online or buying things.
“It takes time. And I think we’ve reached a point where we feel we have brand equity. SMEs know the MoneyMatch brand. They trust the brand and they are willing to transact with us. And it’s evident in the amount of money we have transacted thus far,” says Yap.
Being a part of the sandbox also helps build credibility for the company.
There’s usually a 90% conversion for companies which are willing to hear them out, says Yap, and retention rate is almost 70%.
MoneyMatch is able to shave off quite a fair amount on SMEs’ transaction overseas. This then goes back as savings into their profit and loss. Unlike most fintech innovations which are usually better accepted by the second-generation business owners, Yap notes that the generation gap wasn’t such a big issue for the startup.
“When they look at the matrics, the numbers don’t lie. Then, it’s about whether they want to take the leap from trusting a bank to using us based on that savings,” he says.
Yap started looking into developing its MoneyMatch transfer portal with his co-founder Naysan Munusamy at the end of 2014. Both of them had spent over 10 years each in treasury banks overseas and knew there was a space in the financial industry to service the SME market, particularly in the foreign exchange (FX) segment.
“We were trying to figure out the best way to go about it. There was a lot of fintech innovations coming out of the UK at the time and all they were doing was to bring institutional level FX down to SME level. And that’s the industry that we both know really well,” Naysan shares.
Development work on the platform was fairly simple. But while most companies can get a minimum viable product (MVP) out in three months, it took MoneyMatch about two years to get a platform that will pass all the relevant tests including financial security protocols, linkages with e-KYC (know your customer), cybersecurity protocols and streamlining of backend data processing.
Naysan equates the security needs of its platform to that of an online banking platform.
“For us, there is no such thing as a MVP. The product must be ready and fully secured because we are dealing with people’s money,” he says.
Yap adds that the team also needed time for regulation to speed up to ensure that it could operate within a framework. He says the creation of the sandbox by the central bank was important. Not only did it help with giving fintechs like MoneyMatch the credibility it needs, it also enabled them be recognised by other money transfer operators (MTOs) overseas and by other banks.
“Being in the sandbox has been a very positive experience for us thus far. And it has really helped us build the company to today. I’m fairly confident to say that if we weren’t in the sandbox, we won’t be here today. It’s a testament to BNM’s genuine effort to help innovation,” says Yap.
The company also recently signed on with enterprise blockchain solution provider Ripple to utilise Ripple’s xVia solution to facilitate frictionless payments over its proprietary network RippleNet. By tapping into this network, it will allow users to access new markets quicker and cost efficiently without the need to build bespoke connections to banks and networks all over the world.
Today, MoneyMatch can carry out cross-border transactions to over 90% of the world.
Yap hopes to expand MoneyMatch’s reach regionally and increase its offerings to cater to the needs of SMEs.
The goal, says Yap, is to be bank-agnostic. Unlike most fintechs which thrive on linking consumers with financial institutions or insurance companies, MoneyMatch in itself is transactional.
“Most of them are focused on marketing. We’re very deep in compliance, due diligence and our cybersecurity features are all in line with requirements.
“We are an independent platform, meaning that as long as you have any bank account, you can use us,” he says.
Moving forward, the bigger goal is to build a full-fledged digital bank.
“We see ourselves as a very digital player. We’ve no interest in going from online to offline.
“A digital bank is branchless. It requires no human intervention whatsoever. It basically requires connectivity between your mobile phone and...there may be no need for a card. We’ll basically be a bank that’s powered by a mobile phone without the introduction of a credit card,” says Naysan.
“I think we are on the right path. We could do with a little more exposure,” smiles Yap.
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