MoneyMatch encouraged by discussions with Bank Negara

By Sharmila Ganapathy-Wallace January 17, 2017

Says discussions with regulator have been “positive and encouraging”
Targeting Malaysia, Singapore, Indonesia and Cambodia

Founders Adrian Yap (left) with Naysan Munusamy who is also CEO of MoneyMatch.

BANKS and other financial institutions have traditionally been the go-to places for transactions such as international money remittances and currency exchange. However, advancements in technology have paved the way for startups such as MoneyMatch to provide these services to retail customers more efficiently and at a much lower cost.

The startup has three products currently in the closed beta-testing stage, namely MoneyMatch Transfer (a remittances app), MoneyMatch Exchange (a peer-to-peer currency exchange app) and MoneyMatch e-KYC, an electronic know your customer component that ties together the first two products.

“The KYC component gives us the ability to scale, and carry out the KYC function in a digital format, versus having to go to physical branches and what-not. Currently, the remittances and currency exchange are done in physical locations or branches. We are trying to decentralise the system and digitise the experience for retail banking customers,” Naysan Munusamy, MoneyMatch co-founder told Digital News Asia in a recent interview.

However, MoneyMatch has yet to launch the three products as it has yet to receive regulatory approval from the central bank to offer its products to consumers in Malaysia. “We’ve been in talks with regulator Bank Negara Malaysia for a very long time, on how best to go about this business and the business model as well. Everything that we do will require regulatory approval,” explained MoneyMatch chief executive officer Adrian Yap.

He shared that they are “really close to the final stages of discussion with Bank Negara” and that discussions thus far have been very positive and encouraging. Yap said that they first began talks with the regulator 10 months ago, even before fintech became a buzzword. “When we tread new water, these are the things we have to do. We both want to ensure the consumer gets the best,” he emphasised.

According to Naysan, Bank Negara is “very open to hear about digital innovation”. “They like the end result we are trying to achieve, which is cost savings for the customer. Internally we are confident, but externally we are dependent upon regulatory approval.”

Yap explained that once regulatory approvals come through, the next step for MoneyMatch will be a full-scale launch of the three products. “We feel that the products will bring quite a significant impact to the market as well, so hopefully with our marketing campaign we will be able to get some traction and conversion quickly.”

Commenting on the products, Naysan said that MoneyMatch Exchange is more of an international product for now and that they are waiting for the go-ahead from Bank Negara before they can launch it in Malaysia.

“It’s not something we have marketed, we have about 700 users for MoneyMatch Exchange in the Android app store from over 20 countries. The purpose of launching an international product for now is to get as much feedback as possible from the international market,” he said, adding that when they do a full-blown launch they will initially target Malaysia and Singapore for MoneyMatch Transfer and MoneyMatch Exchange. The target group for MoneyMatch Transfer, he said, will be high net worth individuals and small and medium-sized enterprises.

According to Naysan, with MoneyMatch transfer users save up to 90% per person. “The average remittance cost is anywhere from 3% to 5% (including the fees and spread), we charge 0.5%. What we’re very confident about is that we will be able to provide cost savings to the consumer.”

“The key product offering doesn’t incur legacy costs or legacy infrastructure that banks do, so that is our competitive advantage. Hopefully the consumer will feel that with these cost savings, and our more efficient and convenient product/way to send money, hopefully that will be an interesting enough proposition for users to adopt and convert to,” Yap added.

Going forward, MoneyMatch would like to focus on the Southeast Asian story. “Our goals are Southeast Asia as core business, next we will focus on Indonesia and Cambodia. For the peer-to-peer currency exchange model, we won’t use the Philippines, since flows are inward. Indonesia and Cambodia have a lot of genuine two-way flows,” Naysan explained.

“Also we may eventually expand to markets like Australia and Hong Kong, but they are not our core focus. The more currencies we have, the more options we have to help our customers save money. But the core focus is Southeast Asia.”

MoneyMatch, which has received two rounds of funding to date, has utilised the funds for product development, Yap shared. The startup received US$150,000 in funding from Australia’s Kosciuszko Holdings early last year. Prior to that, in January 2015, they secured RM50,000 pre-seed funding from Watchtower & Friends who run an Accelerator programme under the Cyberview Living Lab Accelerator.

What will they do if the talks with Bank Negara fall through? Yap said they will to accommodate as best as they can to satisfy Bank Negara’s requirements. “But if all else fails, we will look to see if we can run our operations offshore. But we would definitely like to be a Malaysian story first.”

Once they receive regulatory approval and have carried out the product launches, the next step will be to launch Series A funding, Yap said. “We are already in talks with two investors for our future Series A funding round. However it is still at the very early stage and we will pursue this in the third or fourth quarter of 2017.”

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