Payfazz and Xfers, two startups that want to increase financial inclusion in Southeast Asia, announced today they have joined forces to create a new holding entity called Fazz Financial Group. As part of the deal, Payfazz, an agent-based financial services network in Indonesia, invested $30 million into payments infrastructure provider Xfers.
Based in Singapore, Xfers will serve as the B2B and Southeast Asia arm of Fazz Financial Group, while Payfazz, which already uses Xfers’ payments infrastructure, will continue expanding in Indonesia. The two companies will retain their names while working together under the new holding entity.
Both Payfazz and Xfers are Y Combinator alums, and want to make financial services accessible to more Southeast Asians, even if they don’t have a bank account. Xfers co-founder Tianwei Liu told TechCrunch in an email he and Payfazz co-founder Hendra Kwik began talking about joining forces in early 2020 because of their startups’ shared goals.
“This is also coupled with the fact that last year, the COVID-19 pandemic has driven a significant increase in demand for digital payments and financial services across Indonesian rural areas, creating a huge growth opportunity for us,” Liu added.
Kwik will serve as Fazz Financial Group’s group CEO, while Liu will be the financial entity’s deputy CEO. Both will continue serving as CEOs of their respective companies. Fazz Financial Group also appointed as its chief financial officer Robert Polana, who previously held the same role at booking platform Tiket.com.
In Indonesia, Payfazz has built a network of 250,000 financial agents to reach people in rural areas where many banks don’t operate branches. Customers deposit cash with agents, and that balance can used to pay phone, electricity and other bills.
Payfazz, which announced a $53 million Series B in July from investors including Tiger Global and Y Combinator, also offers loans and payment services for offline retailers. As part of Fazz Financial Group, it will continue to build its agent banking network.
Payfazz gets $53 million to give more Indonesians access to financial services
Payfazz uses payment infrastructure developed by Xfers to accept digital payments. Originally launched six years ago with an API for bank transfers, Xfers has since expanded its portfolio of software to include payment acceptance for businesses, tools for disbursing and transferring funds and a cryptocurrency wallet. In 2020, Xfers obtained a Major Payment Institution license for e-money issuance from the Monetary Authority of Singapore.
Xfers will continue to serve clients in Indonesia and Singapore with its payments infrastructure, which enables them to accept bank transfers, e-wallet funds and payments through convenience stores and agent banking networks (like Payfazz). Xfers says it has access to more than 10 million underbanked consumers in Indonesia through its work with agent banking services, and also plans to expand into Thailand, the Philippines, Malaysia and Vietnam.
Fazz Financial Group plans to launch two new products later this year: a zero-integration payment solution for Singapore-based merchants and a single-integration solution that will connect local payment methods across Southeast Asia.
Liu said that, unlike the United States, Southeast Asia “has a fragmented local payments landscape, even within each country,” meaning that consumers often use several payment methods. Creating a single-integration for payment methods in Southeast Asia gives brands a growth channel when entering new countries, allowing them to scale up more quickly, he added.
“The COVID-19 pandemic lockdown has also driven a big surge in online sales and transactions across Southeast Asia, so there is a huge need for online payments by businesses and merchants across the region,” Liu said. “The zero-integration and single-integration solution will help businesses and merchants start accepting online payments quickly and easily with a simple integration within minutes, without any need to deal with complex regulation/license handling and technology development.”
Singapore-based Xfers Lands $2.5M To Simplify Bank Transfers For Online Sellers
Read the original post: Payfazz invests M in Xfers as the two Southeast Asian fintechs form Fazz Financial Group
