Payfazz disclosed a strategic investment in Singapore-based payment gateway startup Xfers. Rumor has been circulating in the industry since May 2020, but Payfazz‘ CEO Hendra Kwik keeps denying it every time DailySocial tried to confirm.
On 19 May 2020, he said that currently, the two companies are solely business partners. Eventually, we found the Xfers logo attached under the Fazz Financial logo at the Payfazz office. However, on January 26, 2021, Hendra still denied the rumor.
Under Fazz Financial, there is also Modal Rakyat. In addition, investment also planted in Credibook which has recently received Pre-Series A funding.
Through the strategic investment, Payfazz and Xfers will become part of the newly formed entity, the Fazz Financial Group (FFG) to jointly achieve the mission of providing financial inclusion throughout Southeast Asia. This will be the first cross-border transaction between two fintech startups in Southeast Asia.
It is said that the investment value Payfazz has disbursed for Xfers was worth $30 million (more than 428 billion Rupiah). Also, Hendra will occupy the position of CEO of FFG, while Tianwei Liu will occupy the position of Deputy CEO. Robert Polana, Tiket.com’s former CFO also joined as FFG CFO.
This strategic move is expected to further encourage the two companies to expand their business in providing more collaborative services throughout Southeast Asia.
For the record, Hendra had first introduced Fazz Financial during an interview with DailySocial in February 2020, as Payfazz has performed various business expansions, therefore, a business group was formed.
Separately, in a virtual press conference today (4/3), Hendra said that both Payfazz and Xfers will have their respective identities in achieving their goals. Payfazz will focus first on the Indonesian market considering that there is still a lot of potentials.
Meanwhile, Xfers will function as a B2B service from FFG – focused on connecting external customers to the payment infrastructure and user network that FFG aggregates. Xfers will continue to focus on increasing presence in a number of countries in Southeast Asia, considering the company is available in three countries. Although it is possible that Payfazz will expand its business in the future.
“Imagine that is like Amazon is Payfazz and AWS is Xfers. AWS present in every building cloud infrastructure, while Amazon is only present in a handful of countries because these two things are different [in terms of challenges and regulations]. Independence is very important, we [Payfazz] ] did not want to limit their operations, nor did we have to follow Xfers’ strategy,” Hendra said.
He added whether Payfazz has the opportunity for regional expansion in the future, the process will indeed be easier as it can take advantage of the API infrastructure that Xfers has built.
The reason behind Payfazz’s interest to invest is actually motivated by the longstanding partnership between the two companies. In addition, they are both graduates of the Y Combinator accelerator program.
Hendra observes Xfers’ API technology really helps the integration process with B2B clients in targeting more unbanked people with financial services. Thus, the more B2B clients successfully signed up with Payfazz, of course, the more inclusive digital financial services are.
“Therefore, we [Payfazz] can focus on pursuing better growth because instead of building the API itself, the costs that should have been incurred, can be transferred to Xfers.”
Currently, Payfazz has 250 thousand registered agents serving more than 10 million unbanked people in Indonesia.
Xfers‘ presence in Indonesia began in 2016 after obtaining $2.5 million in seed funding led by Facebook’s Co-Founder, Eduardo Saverin, Golden Gate Ventures, 500 Startups, GMP Venture Partners, and Partech Ventures.
In 2019, they released Straits X, the first blockchain-supported initiative to advance the open finance ecosystem in Singapore powered by Zilliqa. Xfers’ Indonesian business partners are not only Payfazz, there are also Porter Indonesia, Faspay, Modal Rakyat, and Tunai Kita.
Tianwei said, in the second quarter of 2021, the company will launch two new products. First, a payment solution without integration targeted at merchants based in Singapore. Second, a single integration solution to connect companies/entrepreneurs with fintech expecting to enter Southeast Asia with local payment methods in the region. This is also supported by assistance to reach unbanked consumers.
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Original article is in Indonesian, translated by Kristin Siagian
