Valyou makes remittances convenient, simple

• Language literacy and awareness of e-money among challenges to overcome
• No plans to enter payment space yet; to offer insurance products, salary services

VALYOU Sdn Bhd, Malaysia’s first wallet-to-wallet remittance service provider, set foot in Malaysian soil in 2016 when the telecommunications company, Telenor Group, the holding company of local telco Digi.Com Bhd, bought over an existing Malaysian-based licensed money services business.

Following this strategic acquisition, the brand Valyou was established. With its partners, Valyou supports remittances to more than 200 countries around the world, but in Malaysia, there are nine countries to which most transfers occur namely Indonesia, Bangladesh, Pakistan, India, the Phillipines, Vietnam and Nepal.

In conversation with Digital News Asia, the CEO of Valyou, Prasanna Rao (pic), talked about the company’s journey thus far and its position in the remittance market. Asserting its difference from other remittance providers, Rao shares “We are the only operators to offer e-wallet with remittance services.”

While the main target audience for Valyou is migrant workers, the company also recently launched Valyou Online, an online platform aimed at allowing white collar workers and expatriates within the country to transfer funds. “While the wallet only has a capacity of RM5,000 (US$1,200), users are able to remit larger sums via the web platform,” Rao explains.

The convenience gameplay

To appeal to its target market of migrant workers, Valyou’s gameplay is centred on convenience and keeping things simple for its users.

“They can download the digital application from Google Playstore and walk into any of the 2,000 merchants nationwide.”

This is how the Valyou application works – users need to download the app and register with their passport details as per Bank Negara requirements. Once ready to use, users can take their physical cash to merchants in order to “cash in” e-money into the wallet and “cash out” as needed. It allows users to transfer e-money as need be and perform transactions such as mobile reloads and bill payments. 

Speaking of response rates, Rao shares: “The fact that over 60% of total transactions are done via the wallet shows it has been accepted very well among the community.” Meanwhile, the remaining 40% of transactions are done over the counter at Valyou branches and agent locations.

With Digi’s significant market share among migrant workers, Valyou has capitalised on the telco’s database to understand its user demographic. “The reason why we have developed our product so fast and were able to create an impact on the market is because we have a bigger cousin like Digi,” Rao admits.

Equipped with data of where the migrants live, the company was able to build cash-in channels around these areas in particular. “We didn't have to go on a wild goose chase. It was quite straightforward, we could pin point exactly where to go.”

Overcoming challenges

Although geographical expansion came easy to Valyou, market penetration and adoption proved to be hurdles. Rao said it was particularly difficult to get migrant workers on board the e-money bandwagon: “This particular segment believes in touch and feel. They have not experienced cash being converted into e-money. That is the biggest challenge – creating awareness of this digital currency.”

To address this pain point, Valyou appointed ambassadors within the community to remit funds using the app. “From there, word of mouth spread. The started seeing the convenience, trust in the product built up and then, there was no stopping them.”

On top of that, the company also took heed of the heavy usage of social media among this target audience and started using digital marketing to reach out to them.

“They are extremely active on Facebook. We have about 170,000 followers from these communities. A lot of queries come in and we communicate with them in their own language,” Rao says.

In efforts to overcome the language barriers to access this community, Valyou interacts with its customers in their main language which include Bahasa Indonesia, Nepali, Bengali, Vietnamese, Tagalog and Urdu. “Our app is user-friendly and available in almost every language of the migrants in Malaysia. Because they are not all literate, English is not easy for them and so we use their own language.”

In its early days, Valyou also faced an offline challenge. “Our initial expectation was that customers will transfer money from bank accounts into the e-wallet, but we found out that less than 50% of migrant workers have a bank account. The majority are paid in cash.”

Therefore, the company set out to create offline merchants at sundry shops and mobile top-up outlets, located less a kilometre’s distance from where they live. This is a welcome change from their conventional method of remitting money which involves them “walking to city centres and queuing up at branches that are only operational from 9am to 5pm.”

When asked about their digital literacy and smartphone penetration, Rao said that 70% of migrants use smartphones as a means of entertainment and communication. “They watch a lot of YouTube and content online. It also helps them connect to family back home via instant messaging and video calls.”

While it was a challenge in the initial stages, it is less of an issue today. “Smartphone popularity is growing in this community. It is a natural change that is occurring.”

What lies ahead?

Being contenders in the remittance space already with Valyou and Valyou Online, one would think the payment space is next on the agenda for the company. However, Rao says there are currently no plans to head in that direction: “We want to take it one step at a time. There’s still a lot to do in the remittance space - probably one or two years of good work has to go in.”

He adds that while the payment market is overcrowded, it is definitely a big market Valyou will explore at a later stage. However, Rao shows no signs of worry at being late to the game: “Customers are always on the lookout for something better that others are not able to give them. Once you identify what that is, it is never late in any market.”

In its immediate plans, the company hopes to customise insurance products for migrants and propose this idea to Bank Negara. “The biggest gap for migrant workers here is insurance. They have to pay a lot of money when they are sick and especially if there is an accident or death.”

The company is also working on salary services for employers of the workers to credit wages directly into the e-wallet. While it is still subject to approval, Rao says, “I think Bank Negara will welcome the idea with open arms. There is value we can definitely add. If we have taken the control measures and mitigated risk, I don’t see them saying no.”

As part of its long-term goals, Valyou hopes to become a one-stop centre for migrant workers. “We would like to create a marketplace that offers products used by them. We already have an e-wallet for the payment aspect, but we’ll have to figure out the logistics issues.”

Although there has been recurring talk of the Malaysian government’s intention to reduce the number of migrant workers, Valyou remains confident in its growth strategy. “We don’t want to be a single product of company. We are looking at all the requirements that migrants have – so that 80 or 90% of their spending is captured by us. In fact, the ambition is go 100%. There is a possibility if we have the right products.”