Over the last quarter of a century, the way people access, spend and transfer money has gone through significant change with the appearance of various fintech innovations. The recent proliferation of e-wallets and payment platforms has driven increased online purchases, and money is now flowing around the globe at unprecedented levels. By 2027, the value of cross-border payments is expected to reach US$250 trillion.
For users and entities such as small and medium businesses (SMBs), this has been transformative. The move away from physical money, combined with the ability to purchase online and internationally, has seen a boom in cross-border purchases. But problems remain due to the legacy infrastructure still required to make transactions.
Fintech is providing solutions, but underlying problems remain
With the increasing ubiquity of smartphones, fintech has provided multiple solutions for making cashless transactions. Digital wallets, for example, can be connected to payment platforms or banks and are soaring in popularity. For instance, in Australia, e-wallet use rose 90 per cent between March 2020 and March 2021, becoming more popular than contactless payments.
Due to the vast and rising amounts of international trade – global payments revenue is predicted to grow from US$1.9 trillion to US$2.5 trillion in 2025 – the G20 has made cross-border payments a priority. They identified four primary issues – cost, speed, transparency, and access.
These are complex issues and result from legacy infrastructure. The latter, transparency, is particularly problematic for SMBs. Large businesses have solutions for international payments, and fintech has several options for P2P transactions. But small businesses have been left behind. SMBs who fall under the required thresholds for trading volume are stuck with slow, expensive, and non-transparent payments.
However, fintech is coming up with new solutions and innovative platforms to help SMBs expand abroad.
Discarding traditional infrastructure solves a lot of issues for Southeast Asian Companies
A great example of a fintech company taking a new approach is XanPool and its platform XanPay. XanPool CEO and founder is cryptocurrency entrepreneur Jeffery Liu. He wanted to design a way to solve the problems created by relying on legacy platforms and structures, such as Visa, SWIFT, and banking networks.
Liu explains how XanPool and XanPay solve traditional problems. “We created XanPool to make onboarding and offboarding from fiat currency to cryptocurrency a lot easier. Because legacy infrastructure was created before the internet, it is no longer fit for purpose and was causing a lot of pain. It can sometimes take a week or more to make a transfer, there are foreign exchange charges and a standard merchant fee of three per cent, and there’s no transparency.”
With a background and in-depth knowledge of blockchain technology and cryptocurrencies, Liu built a platform that operates outside the limitations inherent with traditional structures. XanPool has created automated market-making software that allows buyers and sellers – liquidity providers – to buy and sell crypto using bank accounts or e-wallets. The liquidity providers are essentially a fiat gateway, and they make up the XanPool network.
G20 solutions are too slow
“The G20 has finally realised how important cross-border transactions are,” Liu says. “They have correctly identified the four main issues of cost, speed, transparency, and access. But their solutions are largely based on the traditional ways of routing money. For example, one of their targets is for 75 per cent of retail payments to occur in under an hour and within a day for the rest of the market. That is still too slow. There’s also the fact that most of the proposed solutions are for the end of 2027.”
XanPool’s processes solved all these issues and led to the establishment of XanPay. “By using crypto and a peer-to-peer network made up of individuals and businesses, transactions are instant and cheaper. That solves the problems of speed and cost, and the third – transparency – is also no longer an issue. The final problem of access led to us creating the XanPay platform.”
Liu says, “There are existing solutions for most transactions with the exception of SMBs wanting to make cross-border payments. They face all four problems and a host of other issues such as chargebacks, credit card fraud, and rejection from main platforms if deemed too risky. Using XanPool’s existing cryptocurrency and network of local currency providers solves all these concerns. So, we created XanPay, which is a platform that works with local e-wallets and payment platforms.”
XanPay was created for small businesses to operate internationally. “The platform operates outside legacy payment frameworks and is designed for SMBs. Many small businesses are embracing e-commerce and want to expand, but they were being hampered by the old ways international payment structures route money. We are helping to change that.”
Although primarily based in Hong Kong, the company and platform were operating in four Southeast Asian countries from launch and have grown from there. “We’re available in over 20 APAC countries so far,” says Liu. “We have also integrated with 25 payment solutions and connected to over 500 banks. This has all happened in just the last couple of years and is only the start. We recently raised US$27 million in Series A funding, and that extra capital will help us to expand to new countries and markets.”
It remains to be seen if improvements built on top of traditional payment structures, such as those proposed by the G20, will be enough to benefit smaller merchants operating internationally. If not, there are a number of innovative entrepreneurs and fintech companies ready to fill the gap.
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Brankas, an open finance technology company based in Indonesia but operates regionally, has secured US$20 million in the Series B financing round led by Insignia Ventures Partners.
The co-investors are Visa, fintech VC fund AFG Partners, and Treasury International (backed by veteran fintech founders Jeff Cruttenden of Acorns and Eli Broverman of Betterment).
Existing investors BEENEXT and Integra Partners also participated.
With the fresh investment, the firm intends to extend its product portfolio in payments, data, and banking-as-a-service API products and strengthen its capacity by doubling its team of more than 100 staff in 17 countries.
Brankas will also scale its network of more than 40 financial institutions and more than 100 technological firms, which utilise its embedded finance APIs to design, roll out, and manage digital experiences across a variety of use cases, including digital banking, online credit scoring, e-commerce, and gig economy payment.
Brankas was launched in 2016 by CEO Todd D Schweitzer and CTO Kenneth Shaw. Graduating from Plug And Play’s first incubator in Southeast Asia, the startup offers API-based solutions, data, and payment solutions for financial service providers (banks, lenders, and e-wallets) and online enterprises.
The fintech firm works with banks to design and maintain their open finance infrastructure, including APIs for real-time payments, identification and data, account opening, remittances, and other services. This allows financial institutions to foster their digital capabilities, expand their customer reach, and unlock new revenue streams.
For online businesses, fintech firms, and digital banks, Brankas serves as a bridge to critical data needs for verification or scoring processes, reaching previously untapped customer segments.
Brankas said that it will announce agreements with prominent digital banks and fintech leaders in Vietnam and Bangladesh early this year.
Beyond financial services, Brankas’s APIs can also be used in e-commerce to validate and secure payments on their platforms.
So far, the firm claims to have served clients in Singapore, Indonesia, the Philippines, Vietnam, Thailand and Malaysia.
Brankas also boasts of being the first firm to launch banking-as-a-service APIs for account opening and credit card issuance in the region.
Last April, the firm became one of five participants of Visa’s 2021 Accelerator Programme. It then collaborated with Visa to develop a digital credit card issuing proposition that used Visa’s data capabilities.
“Embracing Open Finance in Southeast Asia” report, which Brankas and Integras Partners conducted in July 2021, noted that open finance has sparked interest in the SEA region’s central banks. However, the adoption strategies differ from nation to nation, with some favouring a market-led approach and others opting for a regulatory-driven one.
As stated by Bain & Company in 2019, over 70 per cent of Southeast Asian consumers lack access to financial services, and millions of small and medium-sized firms (SMEs) face significant financial shortfalls.
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FoodMap, an agritech e-commerce platform connecting farmers and food producers directly to B2C and B2B customers, has raised an oversubscribed pre-Series A round of US$3 million, co-led by Vulpes Ventures and Beenext.
Ascend Vietnam Ventures and existing investor Wavemaker Partners joined the round.
Despite recent giant growth leaps in the manufacturing and technology spaces, Vietnam largely remains an agricultural country, with about 20 per cent of the population working in agriculture and related areas. However, there exist some critical pain points — multiple middle-men layers leading to 6-7x mark-up prices for end-users and lack of quality control in food production leading to low exporting prices and lack of consumers’ trust.
FoodMap addresses these pain points using technology.
Launched in 2020 by Pham Ngoc Anh Tung, FoodMap aims to solve the gap between demand and supply across the invisible supply chain with a back-end management system for farmers and suppliers.
“FoodMap wants to help both sides of the equation by optimising the production process, raising the value of Vietnamese food products, and increasing visibility across the supply chain to strengthen customers’ trust. We currently focus on fresh products, seafood, selected meats, ready-to-cook and non-perishable products”, Tung shared.
Currently, FoodMap supplies products from over 300 farmers and producers to Vietnam. It enables customers to access FoodMap’s product via an e-commerce platform and mobile app. All products listed on FoodMap come with a QR code.
For farmers, FoodMap increases their income by roughly 10-20 per cent for their raw products while reducing inefficient mark-ups across multiple layers of intermediaries. In addition, it provides them with insights and analytics for future harvest planning.
As for suppliers, it brings their brand and story to the online audience and starts digitising sales. For example, for some long-standing brands, FoodMap has started generating up to 50 per cent of their total sales volume. On the other hand, it offers quality control and product discovery for customers.
“One thing that sets FoodMap apart from other foodtech players is our deep understanding of consumers’ taste and building products accordingly for their private label offerings. This helps generate high margin, brand loyalty, and exclusivity as competitive advantages,” added Tung.
FoodMap currently has five private label products — tea & coffee, fruits, ready-to-cook, chocolate, and seafood, which generate the bulk of Foodmap’s topline and margin.
The firm currently operates from its two warehouses in Ho Chi Minh city with cold storage. For deliveries, most products are delivered within 24 hours to ensure customer satisfaction.
FoodMap plans to increase its B2B presence with growing demand from both modern trade and general trade outlets.
On the B2C side, FoodMap recently launched a group buying affiliate program to enable social selling among its customers.
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I developed the habit of reading books at an early age. While both my mom and dad read occasionally, they were not avid readers by any standard. Yet, somehow I found myself spending more time reading than exercising any other hobby of mine.
As a kid, I attended a humble elementary school located on the outskirts of Sofia. The school offered a tiny library. In fact, it did not look much like a library, just a room that used to store old furniture, converted into book storage. Yet, despite the poor appearance, I loved spending time there.
My elementary school after it got renovated
The librarian had one notebook to keep track of all visitors. Each student was assigned one page to keep a record of their activity. Most students would read just a few books in the course of their studies, so a page per person was plenty. At that age, pretty much everyone preferred to do sports or act cool rather than read. As far as I remember, I was the only student during my time who needed more than a page to keep track of all the books I borrowed. This leads me to think that my passion for reading must have developed quite early. I was obsessed with reading fantasy and science fiction. Books such as I, Robot (Isaac Asimov), Harry Potter series (J. K. Rowling), and The Wheel of Time (Robert Jordan) left lasting impressions. Overall, two things pulled me towards fantasy and science fiction. One, it helped me escape the day-to-day reality that at times was not pleasant. Two, such books broadened my perspective. It pushed the limits of what I thought was possible.
As I got older, my book diet became more balanced. I started adding a lot more non-fiction. While fantasy and science fiction held sentimental value for me, learning about the real world felt important too. Over time, my reading started guiding important decisions in my life. The authors of those books felt like mentors I had never met.
“The reading of all good books is like a conversation with the finest men of past centuries.” – Rene Descartes
Eleven years ago, my consistent reading led to leaving my home country for studies abroad. Going to uni was not a typical choice in my circle of friends. Most of my high school classmates preferred to get regular jobs or just have fun. Given my circumstances, moving countries for studies was unthinkable. My parents could not support me financially, and I did not have a lot of savings myself. Yet, it always felt right. While it was not easy, I somehow managed to make it work. Thinking back, I give credit for that choice to the literature I read. Where else would I get that idea from?
Studying abroad was not the only contrarian choice that worked out for me. Reflecting on my career, I started working early, with my first job taking place when I was 14 years old. Becoming independent at such an age allowed me to build a pretty decent career in hospitality, even before completing my bachelor’s degree. Then, at the age of 22, I received an offer to lead an F&B outlet, part of a five-star resort. That was more than what anyone in my family had achieved (career-wise) so far. But I decided to turn down the offer, continue studying and pivot my career to tech. As a result, leaving all hospitality-related experience and knowledge behind.
“A classic problem in computer science is hill climbing. Imagine you are dropped at a random spot on a hilly terrain, where you can only see a few feet in each direction (assume it’s foggy or something). The goal is to get to the highest hill.
Consider the simplest algorithm. At any given moment, take a step in the direction that takes you higher. The risk with this method is if you happen to start near the lower hill, you’ll end up at the top of that lower hill, not the top of the tallest hill.” – Chris Dixon, Partner at a16z
In hindsight, that was one of the best decisions I ever took. I was clearly climbing what seemed to be the proper mountain but ultimately ended up being the lower hill. Looking back, it’s easy to make such conclusions, but at the time, I did not know anyone in tech. I did not have a single conversation with friends or family that encouraged me to make the leap. Nevertheless, I made the leap despite what my friends and family thought. Once again, my inspiration must have come from somewhere. I think reading the right books helped.
As I slowly explored the tech sector and started learning what I am good at, I took another unconventional choice. In 2016, I moved to Asia.
Everyone around me was, WTF? Why would you leave family, friends, and in general your comfort? After all, moving from Bulgaria to Denmark 11 years ago was hard enough. Later, changing industries added another layer of complexity. Yet, here I go again, moving 15,000 km away from family and friends to start from the bottom.
Five years later, I look back and think how that choice proved to be another great one. Relocating to an ecosystem experiencing high growth while facing talent shortage is a recipe for a rocketship career trajectory. Asia has the exact same dynamic. Massive market, plenty of capital, and lack of people who understand startups. Words cannot describe the importance of being in a good ecosystem. Especially when you are ambitious and have a lot of energy. Lately, I did the math and figured that my salary in the past five years experienced 420 per cent growth! Add all the learnings from operating several startups in emerging markets. Now, you can see why I stand behind that call five years later.
Looking back, I did not have many friends who left Europe for Asia. Under normal circumstances, most people would have a family member or friend who took on a similar path to guide them. But, unfortunately, I cannot think of anyone in my case.
Meaning, I never had a mentor or a family member who encouraged me to make such risky choices. But I must have received the inspiration from somewhere. The more I reflect on it, the more I think my love for reading must be responsible.
Having said that, I did meet some great people who inspired me as I was making those choices. You always do. Yet, I still feel that my reading diet guided me a lot better than any person I met. As a result, I do my best to nurture my love for books daily. For example, annually, I set resolutions on how much I want to read. I write essays like this one to encourage self-reflection. And I do my best to have a balanced diet of fiction and non-fiction books. As Naval once said, it’s important to read whatever interests you early on to build the habit. Once the habit is formed, you can read anything.
“Read what you love until you love to read.” – Naval
Additionally, I am very picky about the books I read. Over time, I built a process of making decisions on the next book I will be reading. The process is simple and consists of triangulation between the following methods:
Recommendations from people I respect
Ratings on GoodReads or Amazon
Qualitative reviews
While the method sounds simple, I end up picking worthy books in 9 out of 10 cases. It works because I religiously follow each step to ensure the book is good enough. Anyway, enough about me. In 2021, I read many great books, but these were some of my favourites.
This year, my reading list includes two sci-fi, four fantasy, three biographies, and everything else can be parked under self-improvement.
“Surely You’re Joking, Mr. Feynman!”: Adventures of a Curious Character by Richard P. Feynman | source
“You have no responsibility to live up to what other people think you ought to accomplish. I have no responsibility to be like they expect me to be. It’s their mistake, not my failing.” ― Richard Feynman, Surely You’re Joking, Mr. Feynman!
At first glance, the book is written in a very casual and fun way, which makes it easy to read. I devoured it over a week. But do not be fooled by the playful character of Richard Feynman. He is a winner of the Noble Prize in Physics (1965), holds the Einstein Award (1954), Ernest Orlando Lawrence Award in Nuclear Physics (1962), and has been awarded the Oersted Medal (1972). On top of that, he taught himself how to open uncrackable safes. He learned how to draw portraits of people and even performed his own exhibition. All that while joining a Brazilian Bongo group. Additionally, he traveled around North America, Brazil, and Japan. Not to mention the entertaining stories from casinos and strip bars.
I can usually tell when I will love a book: I cannot shut up about it. Richard Feynman’s biography is definitely one of those books. He is a personal hero of mine. A genuinely funny character who nurtured his curiosity and became one of the best at various disciplines. Disciplines entirely unrelated to each other (e.g., playing in a bongo group and cracking safes). He understood the importance of following your curiosity by immersing in a new field. Not only to give it a try but to become one of the world’s best experts at each hobby of his. His intelligence, positive attitude, and great sense of humour result in an incredible read.
“We all step in shit from time to time. We hit roadblocks, we fuck up, we get fucked, we get sick, we don’t get what we want, we cross thousands of “could have done better”s and “wish that wouldn’t have happened”s in life. Stepping in shit is inevitable, so let’s either see it as good luck, or figure out how to do it less often.” ― Matthew McConaughey, Greenlights
Yes, another memoir. Perhaps, the gloomy mood around COVID-19 made me appreciate books and people who are overwhelmingly positive and funny. It’s a suitable read for all times, but somehow it does make more sense during these uncertain and strange times. I listened to the audiobook while travelling across Bali, Indonesia, and loved every minute of it. Before reading Matthew’s memoir, I did not know much about him. Of course, I did watch many of his movies but did not know anything about his actual character. In turn, the experience felt like I was sitting with him over a beer while listening to stories of his life. He is witty, poetic, funny, and unpredictable. I laughed out many times or stopped to reflect on a profound truth that resonated with me.
I strongly recommend you to get the audiobook. His voice is great, and the narration is fun and poetic. I was frequently smiling while listening. But consider that the book can feel a tad narcissistic at times; after all, it’s a memoir. Perhaps not everyone’s cup of tea, but I loved it.
Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb | source
“Further, my characterisation of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on. These types often consider themselves the ‘victims’ of some large plot, a bad boss, or bad weather. Finally, a thought. He who has never sinned is less reliable than he who has only sinned once. And someone who has made plenty of errors—though never the same error more than once—is more reliable than someone who has never made any.” ― Nassim Nicholas Taleb, Antifragile: Things that Gain from Disorder
When I read my first book by Nassim Taleb, “Skin in the Game,” I was shocked by his attitude. It’s so rare to find an author who does not try to be politically correct at all times. Taleb is brutally honest and does not sugarcoat his opinions. In turn, his attitude triggers many people to dislike him. He seems to be angry, contrarian, and dismissive all the time. Yet, you will learn a ton by giving him a chance and pushing through his harshness. He is intelligent, observant, and knows how to break down complex concepts in a way so anyone can understand.
The whole book’s premises can be broken down to the following quote: “Difficulty is what wakes up the genius.” Antifragility is a fascinating concept. Many people think of resilience or robustness as the definition of antifragile. But it’s a lot more. Resilience and robustness resist shocks and remain the same. Antifragile people use shocks, chaos, disorder, volatility, and uncertainty to get stronger.
In my humble opinion, to be successful in today’s ever-changing world, you have to become antifragile. I find myself pitching the book to friends and family during dinner conversations. A clear sign that it left a lasting impact on me. This is one of the most important books I have ever read, and I hope you will appreciate it as much as I did.
Reading List 2022
My reading list for the next year is not completed yet, and that’s intentional. While I have a few books on my shelf, I leave a lot of room for serendipity as my interests evolve. At the moment, I have purchased the following books and cannot wait to start them:
“The Cold Start Problem” by Andrew Chen – as a founder and operator in tech, the content of Andrew Chen has been very influential for me over the years. Moreover, I leveraged his research when writing on network effects and marketplaces. In turn, I cannot wait to read his newest book. After all, the author could be considered as one of the top experts in network effects globally.
“Project Hail Mary” by Andy Weir – Bill Gates recommended Project Hail Mary earlier this week, which piqued my interest. Looking at the great reviews and since I am a big fan of The Martian, I bought the book quickly.
“Will” by Will Smith and Mark Manson – since I loved Matthew McConaughey’s memoir and am a fan of Will Smith (both music and acting), it felt appropriate. So I am super excited about reading this one.
I hope you enjoyed my recommendations. I am looking forward to a more normal 2022 where we can go back to travelling and socialising
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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. This season we are seeking op-eds, analysis and articles on Web3, climate tech and sustainability. Share your opinion and earn a byline by submitting a post.
