- Providing an e-marketplace for migrant workers in Malaysia
- Founders aim to ambitiously create a digital bank in future
MALAYSIA is a nation of migrants; it was and is being built on the backs of people who are looking for better lives. There are currently about 3.3 million migrants in Malaysia (excluding the 2.2 million illegal workers), most of them blue-collar workers who do not have access to banking facilities.
This means that a foreign worker is unable to perform the simplest of online transactions – such as buying a bus ticket – as he does not have a credit card or debit card tied to bank account.
Stepping into this gap is MyCash Online, a five month old e-marketplace created specifically for migrant workers. In the words of Bkash Fintech Malaysia Sdn Bhd co-founder Mehedi Hasan, a Bangladeshi national, it provides a safer and convenient way for unbanked migrants to spend money while working in Malaysia. Bkash Fintech owns and operates MyCash Online.
Key to its service offering is its network of 266 stores around the country, though most are in the Klang Valley. Calling them his agents, Mehedi explains that all are connected to the backend of MyCash Online either through its website or mobile app where they can then offer the various products to the migrant workers and earn a commission.
Its current services are international mobile top-up (for Bangladesh, Nepal and Indonesia), Malaysian mobile top-ups and online bus ticket purchases. Mehedi plans to add a lot more merchants to turn the site into a thriving marketplace.
As this is mainly a pre-paid business, these agents buy credits in advance. “About 60% of our agents buy credits in advance so that they can better serve the migrant customer,” says Mehedi.
Agents which consist of mom and pop stores, mamak restaurants and mobile phone shops purchase their credits through cash payments or via FPX with Mol Pay. FPX (Financial Process Exchange) is a payment gateway that allows users to make real time online payments using their current or savings account.
MyCash Online currently does not accept any payments direct from migrant workers – though that is in the works.
“As we are not accepting any payments from the migrant workers, we do not need any licence from Bank Negara Malaysia (BNM),” says Mehedi. “However, we are currently trying to either to get an eMoney license or work with a partner to offer this service directly to customers. We have also presented our idea to BNM and hope to get a license under the regulatory sandbox coming later this year.”
One-stop shop for unbanked migrant workers
While the services offered by MyCash Online are not innovative, the concept of a one-stop e-shop for migrant workers certainly is. And this is Mehedi’s big dream – to turn MyCash Online into a digital bank, offering customers a range of services through digital engagement and alternative banking facilities to brick-and-mortar retail banks for the migrant worker population.
“Instead of registering an account with the various websites to book your tickets, top up your mobile credit or transfer money, all you need to do is maintain one account with us and one credit balance. Anything you need, you can come get it here,” says Mehedi. But first he needs that license from BNM and then comes the massive education process as Mehedi is well aware that most migrant workers are not comfortable doing things online. “They are very, very careful with their money.”
Psychology and insight
Mehedi came to Malaysia 8 years ago to further his studies and subsequently worked in two software development companies. He soon realised that app-based services were where his future was and left employment to create his own startup, which came into being in November 2015.
Mehedi’s first app, Kokil, was a music-based one aimed at the Bangladeshi migrant community. The free app is still fairly popular today – it has 30,000 downloads – and Kokil’s community Facebook page, is thriving. It was through this social media connection that Mehedi first got the idea to start an e-marketplace for migrant workers.
“I noticed that people were asking each other questions about how to remit money to Bangladesh and asking us if we knew any convenient way to complete online transactions without needing a bank account. This was the perfect opportunity for me to provide a beneficial service to this community and monetise it at the same time,” he reveals.
Using Mehedi’s insight into the migrant worker community, MyCash Online literally cashes in on the basic psychological behaviour of the migrant worker in Malaysia. He explains that many of these workers do not have bank accounts because of problems with documentation and even if they do, are unwilling to physically go to the bank – access to online banking is extremely poor – because of language barriers and negative perceptions of the way they will be treated.
“The Malaysian tech scene caters almost exclusively for Malaysians, nobody thinks or even knows of the needs of the migrant workers,” says Mehedi, explaining that he and his co-founder Akm Nurol Haq, who is also Bangladeshi, are able to engage directly with their customers, find out exactly what they need and also explain MyCash Online to potential clients.
MyCash Online was officially launched in April 2016 and in five months has racked up 88,126 transactions valued at US$191,000 (RM790,939) – that is about 26,000 unique users a month with revenue at RM27,715. [Para updated with correct figures.]
Between setting up the startup in November 2015 and launching the service in April, Mehedi was on the ground talking to migrant workers, as well as the owners and operators of convenience stores.
Mehedi explains that while the owners of small convenience stores in areas with a migrant-heavy population are usually Malaysians, the operators are themselves foreign workers and the stores are migrant-centric. Mehedi and team were able to obtain five convenience stores in Kuala Lumpur to act as MyCash Online agents within the first week of the launch.
Today, even though the majority of his 266 agents are based in the capital city, Mehedi is continuing to build his agent network as well as expanding his team. The startup obtained MSC status in July from the Malaysian Digital Economy Corporation, allowing Mehedi to employ Bangladeshi students as interns. Again, their ability to connect with the target customer is invaluable.
While the team works hard to expand the startup’s reach, word has also been spreading about MyCash Online through other means.
“We got a call from someone in Sungai Petani, in Northern Malaysia who heard about MyCash Online from his friend in Kuala Lumpur and wanted to offer it to his customers there,” says Mehedi, who with his co-founder subsequently travelled to the small northern Malaysian town to check out the scene and help their new agent set up.
The agent-startup relationship is somewhat symbiotic – the agents gain a small commission from the sales and Mehedi gets insights into customers’ needs and ideas for further expansion of MyCash Online services. “We are helping each other grow,” he says with a smile.
It was from his agents that Mehedi got his next big idea – selling air travel tickets to migrant workers. Mehedi and team are working with AirAsia to provide an e-ticketing service on MyCash Online where AirAsia tickets can be purchased. Mehedi’s agents will be able to print out the e-tickets for their customers as necessary. This service will be launched in October.
Mehedi’s intention is to eliminate the need to use a travel agent for airline ticket purchases, providing a cheaper and more convenient means for his customers.
Of course, the entrepreneur is not stopping there – various new services are in the works. It is currently in talks with Malaysian electronic payment system provider Touch ’n Go to issue a co-branded prepaid card migrant workers can use as an e-wallet at its 266 agents to make small purchases. The matter is still under discussion and no commitment has been made as yet. "We should be able to finalise this in due course, once we get the various approvals, including from the relevant regulatory bodies," says Mehedi.
Also by 2017, Gift to Bangladesh, a service that enables cash transfers, bill payments and even delivery of goods within Bangladesh and from Malaysia to Bangladesh will go live on the MyCash Online platform.
Mehedi explains that it is common for migrant workers to bring gifts such as blankets, prayer mats and other bulky items when they travel home to Bangladesh. “Instead of doing that, they can use this service, which is like online shopping – they purchase the item here and we will have it delivered in Bangladesh.” Though there are similar online shopping services available within Bangladesh, none cater to a customer outside the country paying through a non-Bangladeshi issued credit card.
The service will also eventually include online electricity and telephone bill payments, and purchase and delivery of groceries and medication. “You don’t have to send the money to Bangladesh and have your parents withdraw the cash and go and line up to pay the bills or buy what they need. This is so much more convenient, especially for those who live in rural areas,” says Mehedi.
Moving on, Mehedi wants to expand services to Singapore, the United Arab Emirates and Saudi Arabia, places where migrant workers face the same problems as in Malaysia and require the same solution.
At the same time, he is planning to execute a deep dive in Malaysia – penetrating rural areas to open up the e-marketplace not only to migrant workers but also Malaysians. “Actually, anybody can use the services we provide,” he points out.
Despite MyCash Online’s early traction with the startup seeing positive cash flow, Mehedi is not getting carried away.
“We are still trying to achieve our goal of creating a digital bank. We should be in shape to do it by 2018,” he says, adding that by that time the company should be seeing transactions worth US$80 million (RM332 million) taking place per year.
“If we achieve that, then I can say we are successful.”