The remittance business is still lucrative to this day. Especially startups that touch this niche are still a handful. A brand new startup named Transfez appeared trying to reap a fortune in the remittance business.
Transfez CEO Edo Windratno said that the initiative to establish a startup appeared in 2018. The experience of sending money in conventional remittance services that takes time and high costs is the reason Windratno makes similar services more efficient. In December 2019 Windratno and his team finally released the Transfez application on Android and iOS.
“Our goal is to make cross-region transfer in this country as easy as a domestic transfer,” Windratno said when being interviewed at his office.
Even though it has been only a month, Transfez developed quickly. The remittance services now reach 37 countries across Asia and Europe. This service is claimed to have sent money of up to 220 billion with users mostly come from students and importers. However, Transfez is currently available to send money from Indonesia abroad.
As a reference, TransferWise is the most popular global remittance startup that currently supports sending funds to Indonesia, including various local e-money platforms.
Mechanism
Fast and cheap are the two things that Edo highlighted from Transfez. The average time required for Transfez to transfer funds is around one day. However, for some destinations, such as South Korea and India, they only need 5 minutes. While the cheap factor is due to transaction costs they charge starts from Rp 50,000 to Rp 100,000.
In each destination, Transfez holds at least one financial or banking institution as partners. The Transfez system requires users to send to their account first. Next, their partners will send money with an equivalent value of the nominal transferred.
“We eliminate various parties involvement which applies in conventional remittances, therefore, we can compete in terms of speed and price,” he added.
Transfez gains income from every transaction that occurs. The inclome also comes from margin exchange as well as the remittance business in general.
Target
Transfez has obtained a license from Bank Indonesia (BI), and its ambition is to expand to 80 destination countries this year. They are targeting some areas, such as the United States, South America, and Africa. In terms of features, they are determined to facilitate sending money from abroad to Indonesia.
Eventually, Transfez has passed the bootstrap phase, which indicates they’re moving towards a funding round. Nevertheless, they are yet to reveal more about this. “There is [plan], but can not be revealed,” Windratno said.
Opportunities in the remittance market are currently wide open in Indonesia. The World Bank (2018) noted that the amount of remittances to Indonesia has reached US$ 11 billion or around Rp150 trillion. While the amount of remittances out was around US$ 5 billion or Rp68.5 trillion. With a relatively small number of players, the opportunity to reap profits in this business is wide open for Transfez.
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Original article is in Indonesian, translated by Kristin Siagian
