Island Fintech Weekly (17 Oct)

Oct 17, 2021

Greetings Islanders,

Island Fintech Weekly is nearly half a year old! Scrolling through past editions, I must say I really have enjoyed writing. But doing it consistently - sourcing content, keeping things original, and getting inspiration - this has been a ton of hard work. Nik writes the OG fintech newsletter, This Week In Fintech, something I have read for years now. Nik did a nice interview on how he keeps consistent. This tweet hit home 😮‍💨

Nik @NikMilanovic

action shot of me writing the weekly newsletter

So thanks for sticking around. Your support makes it all the more worthwhile! We’re only just getting started - you may also notice the format’s a bit different today, let me know what you think.

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Note: Are you looking to raise angel funds for your fintech? Have any questions or thoughts around Wise’s Platform API? Reach out to me via LinkedIn.

🐠 Dips

1️⃣ Atome gets an atomic deal with SC

Who says you can’t buy BNPL as a feature in SEA? Standard Chartered seems to be taking inspo from Square’s Afterpay acquisition, having announced a $500m financing deal with Atome.
SC will use this investment to be able to anchor its strategic partnership in offering BNPL services across SEA, targeting a roll out in Indonesia, Malaysia, Singapore and Vietnam in the next few months, and later expanding to include digital lending products.
- Benefits to SC: Offering BNPL, a strategically important product that SC currently does not offer at a competitive level 🤺
- Benefits to Atome: Cheap line of financing 💰 + merchant acquisition via SC introductions 🏬 + additional distribution channel through SC’s client base 👩‍👩‍👦‍👦
Seems like a win for both sides, but especially so for Atome!

2️⃣ PayMaya is selling insurance

Bolttech (who just closed a $210m Series A funding round) partnered with the Philippines e-wallet platform PayMaya to offer affordable micro-insurance products within its app, in a service named PayMaya Protect for cover typical health insurance (underwritten by a legacy insurer, Pioneer Insurance), providing approx $~15k coverage at rates that go as low as $2 monthly, and with added flexibility - PayMaya said the products allow a subscription model so that customers can choose when they need cover. PayMaya also offering mobile phone insurance - protecting against liquid damage and cracked screens for as low as $1 a month. After all, without its customers having working phones, how can PayMaya process its payments?
It’s interesting to me that a platform (Bolttech) is working with another platform (PayMaya is a financial superapp) to distribute a fairly tricky service to sell - insurance. PayMaya and Bolttech are both examples of Online-to-offline (O2O) platforms. O2O platforms facilitate transactions among users with both online and offline components (e.g. online purchase of physical goods that are then delivered offline). These Platforms are unique in which they require both physical and digital infrastructure to function.
The beauty of O2O platforms in fintech is that they allow financial services to be sharpened and distributed in a way to meet the individual needs of customers. In this case, the clunky insurance policy has been tapered into a neat, affordable package with plenty of flexibility - and also protecting the things that matter - things like their phones. The other superpower of distribution is that reaching consumers who perhaps, were not able to afford or know about insurance services without the distribution capabilities within the PayMaya universe.

3️⃣ The state of cross border eCommerce in Singapore: 📈📈📈

The annual value of business-to-consumer (B2C) eCommerce exports from Singapore is heading up and up. According to a recent report from Amazon, Singapore based sellers are raking in $1.03b in 2021, and this value could reach $2.6 billion in 2026 if these sellers, who are primarily SME businesses, keep selling at this pace.
What is interesting is that of these businesses, 90% of them are selling outside Singapore - so money is essentially moving back into Singapore in SGD from various currencies.
That process of collecting money from foreign customers can be tricky. You have various payment portals, invoicing, tax, withholding and payroll complexities. Amazon is trying to coach growing sellers with with bootcamps focused on ‘starting local, going global’. Along with training programs, navigating the mechanics of cross border commerce can help sellers save cost — here is an in depth Forbes article describing some of the challenges in Cross-Border e-commerce.

🐋 Dives

The New Era of Credit Cards (Prince Jain)
McKinsey 2021 Global Payments Report (McKinsey)
The Platform Economy: Southeast Asia’s Digital Growth Catalyst (Tech for Good Institute)
BaaS served three ways: A closer look at a rapidly evolving market (TechCrunch)
How fintech can bridge the credit gap for first-time borrowers (Financial Express)

🍹 Twitticisms

(P.S. Again, if anyone has SEA or Asia focused fintech Twitter accounts I should be following, tweet me. The accounts I see on my feed are overwhelmingly 🇺🇸 focused)