MoneyMatch launches digital cross-border remittance service

• Two to three times cheaper than what the banks charge for fees and forex spreads
• Aims to be a one stop solution for customers’ foreign exchange requirements

LOCAL fintech company MoneyMatch Sdn Bhd on Oct 30 launched its Transfer portal, a fully digital cross-border remittance service aimed at the general public and small-and-medium sized enterprises (SMEs).

Digital News Asia spoke to MoneyMatch chief executive officer and co-founder Adrian Yap (pic) for some insights into the new service.

One of the highlights of MoneyMatch’s Transfer service is that it offers cheap exchange rates and fees compared to incumbent banks.

“We are cheaper than all the banks judging by the rates published on their websites and we are generally around up to two to three times cheaper than what the banks charge with regards to fees and foreign exchange spreads. Our low overheads allow us to price our product competitively and pass these cost savings back to the SME or individual customer,” he told Digital News Asia via e-mail.

“We can currently send major trading currencies like USD to most of the world, and we currently offer AUD, BDT, CAD, CNY, EUR, GBP, HKD, IDR, INR, LKR, NPR, NZD, PHP, PKR, SGD, THB, VND. 

“We are always constantly looking to expand our offerings and we are looking specifically at improving our reach through European countries, Asia Pacific and Indochina by early next year,” he explains.

Price and convenience

According to Yap, the service’s unique selling propositions are price and convenience. “Whilst price is an important factor when dealing with cross border payments, we try to offer our customer the best possible experience when performing a transaction on our site. The one major advantage that we have is convenience as we are a fully complete end to end digital platform.”

He adds that unlike banks, MoneyMatch has the ability to fully onboard customers digitally with its proprietary E-KYC (know your customer) protocol that is approved by Bank Negara Malaysia.

“With that said, a new user could typically sign up and make cross border payments within a couple of minutes all from the comforts of his or her home.”

The idea behind this concept stems from the insight that most customers typically open a bank account with the bank that is nearest to their homes or place of business.

“For example, James wants to send monies to Singapore, and is banking with Bank A, but Bank B is offering a much better Singapore dollar exchange rate.

“James would not be able to access the Singapore dollar exchange rate for Bank B unless he is a customer of Bank B. James only has to sign up with MoneyMatch and he would then have access to the best Singapore dollar exchange rates compared to all the banks.”

The revenue model and development

Perhaps the biggest question on people’s minds is how MoneyMatch actually makes money from charging so little for its Transfer service.

Yap explains that the typical revenue model for banks have always been foreign exchange spreads and fees.

“We know for a fact then that the business model works as banks are extremely profitable, and we didn't want to reinvent the wheel. We are therefore utilising the same business model but doing it at a discount as compared to the typical bank.

“As mentioned earlier, being a digital player our overheads are much lower as compared to the incumbents and we therefore pass these cost savings back to the consumer whilst maintaining our profit margins.

“The ability for us to be in this landscape without having the baggage of legacy costs allows us the flexibility to compete on pricing when we have to and we are always searching for more innovative revenue streams to complement our existing model which will then allow us to drop our prices even further.”

According to Yap, they took their time with the development of the product as they were also waiting for regulatory approvals before launching the product.

“There were many challenges along the way and we saw this as a positive sign that we were on our way to building something worthwhile. I personally believe that the greater the resistance the company or startup faces, the higher the possibility that it is on track to creating something significant.

He adds that one of the challenges they perceived they would have was regulation. “However, the engagement with Bank Negara Malaysia has been positive from the beginning and that we are extremely thankful and grateful to be a part of their Fintech Regulatory Sandbox.”

Yap expressed gratefulness to Bank Negara Malaysia for the development of Transfer and for the development of MoneyMatch in general.

“MoneyMatch would not have been possible without Bank Negara Malaysia's cooperation and guidance. I won’t go into details as most of the information is confidential in nature, however I will say the constant and collaborative engagements between Bank Negara Malaysia and MoneyMatch was instrumental in helping us get to where we needed to go as a company and we hope that together we will continue to spearhead innovation and digitisation initiatives in the financial sector for many years to come.”

Future plans

Now that the payment corridors and payment rails have been set up, the goal is to scale and grow their SME target base with intentions to market their product to the underbanked small, micro and startup companies in Malaysia.

“The idea of the underbanked company is a company that typically only has one bank account and has no alternative when it comes to performing foreign exchange transactions. The bulk of our SME customers are companies that have less than RM5 million in revenue per year and would therefore be deemed to be too small for a bank to be given preferential treatment,” Yap says.

He adds that there are close to 900,000 small and micro enterprises in Malaysia that fall into that category and the plan would be to capture as much of this segment as they can whilst concurrently looking to expand their business regionally should the opportunity arise.

“MoneyMatch has another extremely interesting product that we are looking to launch very soon called MoneyMatch Exchange, which involves revolutionising the way we exchange hard currencies,” he shares, adding that they are currently in closed beta testing and have also been given approvals by Bank Negara Malaysia to conduct this innovative solution. MoneyMatch Exchange might potentially be the first regulated product of its kind in the world, he adds.

The long-term plan for MoneyMatch has always been to be a one stop solution for all of our customers’ foreign exchange requirements, Yap concludes.

MoneyMatch’s Transfer portal is accessible at: https://transfer.moneymatch.co

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MoneyMatch encouraged by discussions with Bank Negara

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