Ant Financial, the Alibaba affiliate that runs payment gateway Alipay has made a low key investment in Singaporean startup M-Daqaccording to Tech In Asia.

M-Daq is very media shy but it has raised $87 million in its series C funding round in November making it one of Singapore’s top-funded startups. The issue share capital that Ant Financial owns in M-Daq is worth $22 million, the value of its total shares being higher.

M-Daq’s series C fundraising round was raised at company’s valuation of $185 million. It was led by self-described “a new strategic investor”, speculated to be Ant Financial.

Why Alibaba cares about M-Daq

According to Tech In Asia, M-Daq debuted a forex product for ecommerce called ‘Aladdin’, which it piloted with a ‘global ecommerce powerhouse’.

M-Daq technology was built to make cross-border  transactions less costly, with better and more predictable rates for merchants.

This will be useful if Alibaba wants to boost sales between sellers in China and buyers across the world.

This is where it gets slightly complex; documents obtained by Tech In Asia reveal that Ant Financial invested in M-Daq via an entity called API Investment Limited. An entity called Shanghai Yunju Investment Limited holds 100% of shares in API and 100% of Shanghai Yinju’s shares are held by Ant Financial.

It could be said then, that Alibaba plans to leverage from M-Daq’s cross border payment product in support of its plans for global expansion. Neither company has responded for comment.

A version of this appeared in Tech In Asia on July 22. Read the full version here.

Digital Ventures, a new subsidiary of Siam Commercial Bank Group, announced the launch of its first startup incubation program, reports The Nation.

Charle Charoenphan, Head of the Digital Ventures Accelerator incubation program said the initiative will provide advice and funding for startups to strengthen Thai based and regional financial technology business, (fintech buzzing again).

Each business participating in the program will be given a grant of $8,600 (300,000 THB).

Startups participating in the program will be intensely educated on basic entrepreneurship with consultation mentors. This kind of model already exists in the form of Dtac Accelerate and True Incube, among many others. Although these new startups get initial funding, 300,000 THB is only enough to kick-start a project off the ground, not viable for any significant development.

Half of the program slots have been reserved for start-ups directly related to fintech, while the remaining half have been reserved for start-ups in other fields – a move designed to maximize the benefits for both SCB and its corporate and individual customers.

Digital Ventures plans to launch a free bank-simulation platform next month that acts as a virtual testing environment for businesses developing fintech products.

The division is playing the role of a laboratory within SCB that carries out research and development for fintech products and services, and innovates new solutions such as blockchains, the Internet of Things, machine learning and biometrics technologies to satisfy customer demand.

Digital Ventures has also partnered with Singapore-based Life.SREDA, a global venture-capital fund specializing in financial technology. The collaboration would strategically benefit Digital Ventures in both research and investment, improving the company’s financial services.

SCB’s digital ventures is another fintech initiative that has recently been surging in popularity.

A version of this appeared in The Nation on July 22. Read the full version here.

Asia has taken the global lead in funding fintech startups reports Forbes. Average funding received per company by region is as follows:

  • Asia: $34.6 million per deal (130 deals)
  • US: $20.4 million per deal
  • Europe: $12 million per deal

More fintech companies are being backed by venture capital funding at 33% annual growth.

Crowdfunding, cross-border transactions, P2P lending, mobile and electronic payments are some of the startups that have vastly enhanced the performance of financial operations across different consumer segments. According to a survey conducted by Ernst & Young, the top reasons for utilizing fintech services among consumers are:

  • Convenience in the account setup procedures
  • More attractive rates and fees
  • Better quality service and products

The top reason for not using fintech services is lack of awareness as 53% respondents agreed with this statement, according to the survey.

According to research firm Celent, more than 75% of estimated investments are put towards maintenance, meaning that money is mostly spent on monitoring rapidly changing regulations and not innovating new technologies. This seems to be a global trend in the financial technology sector, as Thailand’s government is working to relax regulations. Singapore reports to have set up a regulatory ‘sandbox‘ to facilitate fintech development and Malaysia has also been working to improve regulations to enable fintech acceleration.

Despite Asia attracting the most funding, it doesn’t necessarily mean that fintech growth is accelerating at a fast speed, as reports showed that investments in Asia for Q2 have slowed down compared to the same period last year.

A  version of this appeared in Forbes on July 20. Read the full version here.

The formation of The Fintech Association of Thailand was announced today at the ‘Positioning Thailand’s Fintech Ecosystem’ conference held at C-asean. The association will see members from the private, public and financial sectors come together to boost Thailand’s fintech potential.

The event was organized by C-asean to promote the launch of The Fintech Association of Thailand in collaboration with:

  • Wisudhi Srisuphan, Thailand’s Deputy Minister of Finance
  • Dr. Veerathai Santiprabhob, Governor of Bank of Thailand
  • Korn Chatikavanij, Thailand’s Former Minister of Finance
  • Tipsuda Thavaramara, SEC Thailand Deputy Secretary-General
  • Teeranun Srihong, Senior Executive Vice President at Kasikorn Bank

And other industry specialists who participated in different rounds of the panel.

Thailand’s sectors must encourage friendly, collaborative competition in order to advance the country’s fintech growth without fear of cannibalization. Traditional industries are being disrupted, which means that Thailand is moving towards a new phase, says Dr. Veerathai.

This is the first year that the Bank of Thailand has received more request to close down bank branches from commercial banks than to launch more branches.

Threat from global players

Thailand should not be wary about competing with other ASEAN countries in fintech, instead, it should be concerned about the influence of global players such as Alipay or PayPal. These global companies have the capacity and outreach to disrupt domestic development. If Thailand is unable to fully accelerate the government’s e-payment platform, PromptPay, then the country could potentially lose access to data and transaction information.

The role of regulators in the success of fintech

Regulators in Thailand are traditionally conservative and hardly deviate from the fine print. However, the Bank of Thailand is working wth the government to relax certain financial regulations.

Regulation should be principle based, rather than rule based. A good regulator must also be an innovation facilitator. Rules cannot be rigid when it comes to technology.

The possibility of forming a ‘sandbox’ was discussed during the roundtable as other countries such as Singapore have launched them to facilitate the growth of fintech startups. The sandbox is to be treated as a lab space or incubator.

Regulation, in regards to fintech should be principle based and not strictly rule based as it will leave no room for innovation. The forum called for regulators to also take on the role of ‘innovation facilitators’. With this in mind, the Bank of Thailand is currently reviewing to revise certain financial regulations with the government.

The Thailand Fintech Association will be able to drive progress for fintech in Thailand, but it must also keep in mind the consumer and infrastructural and regulatory challenges that come with moving towards a changed cashless society.

The formation of  The Fintech Association of Thailand was announced today at the ‘Positioning Thailand’s Fintech Ecosystem’ conference held at C-asean. The association will see government figures, banks, regulation officers and the private sector join forces to drive Thailand’s fintech industry to its full potential.

The event was a roundtable discussion with key figures in the financial, media and regulatory sector, where a number of  important issues and topics regarding the country’s Fintech landscape were discussed.

C-asean launched the event in collaboration with the esteemed panel of speakers:

  • Wisudhi Srisuphan, Thailand’s Deputy Minister of Finance
  • Dr. Veerathai Santiprabhob, Governor of Bank of Thailand
  • Korn Chatikavanij, Thailand’s Former Minister of Finance
  • Tipsuda Thavaramara of the SEC Thailand Deputy Secretary-General
  • Teeranun Srihong Senior Executive Vice President of Kasikorn Bank

Thailand’s weak fintech infrastructure

According to Korn Chatikavanij, Thailand has a good market size with innovative ideas to drive the fintech industry forward. However, what the country currently lacks is the integration of sectors, from private to public, and also between regulators. Talks regarding the government’s e-payment initiative, PromptPay, has brought into light the country’s readiness for a cashless society and trust issues.

Thailand lacks one crucial component; the ability to address and identify problems with infrastructure.

However, it is time to acknowledge that industries need to be disrupted, and traditional banking services must adapt with changing trends.

ecommerceIQ Thailand FinTech Ecosystem

Source: C-asean Facebook Page

One of these trends is the request for traditional banks to close down rather than expand as amount of online services grow. Although most of these changes are happening in Bangkok, the government’s PromptPay rollout strives to shift the whole country to digitized payments.

Ideas such as blockchains and ‘smart contracts’ that have been adapted in other countries are thrown around simply as buzzwords in Thailand instead of viable solutions.

In Singapore, the government and private sector support the fintech initiative by allocating funds to all startups and sectors that develop fintech, from hardware development to programming. This is how successful fintech companies accelerate quickly. These kinds of development need to happen in Thailand.

The main consensus from panelists,

Fintech cannot be treated as a buzzword, companies must be accountable for their mistakes and prioritize the customers.

In order to pave way for financial innovation, there must be competition in the marketplace, according to Tipsuda Thavaramara from the SEC, and this means properly defining regulations that control traditional systems.

ecommerceIQ Thailand FinTech Ecosystem

Global players pose as the real threat to digital development

Thailand should not be concerned about competing with other finance players in the country, such as banks or firms, nor should it be concerned about competing with other ASEAN countries’ fintech development. It is big players such as Alibaba that we should be concerned about, says Korn. Global companies have the bandwidth to disrupt domestic development.

Without strong domestic development, the country could potentially lose out to popular payments in China and the West such as Alipay and PayPal.

“Cannibalization of the industry is ok as long as we participate in the cannibalization” – Teeranun Srihong, Senior Executive VP of Kasikorn Bank.

How to regulate fintech

Members of the panel proposed to set up a ‘sandbox’ as a space to outline regulations and facilitate fintech startups to grow. The sandbox is to be treated as a lab space.

Regulators in Thailand are traditionally conservative and hardly deviate from the fine print. However, the Bank of Thailand is working wth the government to relax certain financial regulations.

Regulation should be principle based, rather than rule based. A good regulator must also be an innovation facilitator. Rules cannot be rigid when it comes to technology.

Aside from reviewing regulations, the government is also working to push out e-KYC (electronic-know your customer), which is supposed to validate and store user data. This will be very useful following the launch of PromptPay. In Q4 of this year, The Bank of Thailand will also be pushing for the launch of QR codes to support the e-payment system.

The formation of the Fintech Association will be beneficial in driving progress and conversation forward as it will provide a viable link between different sectors needed to push the country’s fintech advancement forwards. However, a lot of work is left to be done until Thailand can claim to be a fully functional digital society.

Written By: Anutra Chatikavanij

Omise, a Bangkok-based payment enabler much like Stripe, has raised a $17.5 million Series B round to expand its reach across Southeast Asia, reports TechCrunch.

The company proves a payment gateway system that allows any retailer take credit card payments online. Omise isn’t releasing any figures for its business but Harinsut said the company can reach profitability inside the the next year.

The company offers its service in Thailand and Japan (the birthplace of CEO Jun Hasegawa), but there are plans to expand to Indonesia, Singapore and Malaysia, where it has carried out closed testing.

Omise funding history

This new round, which is one of the largest for a fintech company in Southeast Asia to date, was led by Japan-based SBI Investment, with participation from Sinar Mas Digital Ventures (SMDV) in Indonesia, Thailand’s Ascend Money (affiliated with mobile operator True), and existing backer Golden Gate Ventures. Omise has now raised over $25 million, including a $2.6 million Series A in May 2015 andundisclosed round from Golden Gate Ventures last October, right after the Singapore-based VC firm announced a new $50 million fund.

Competitive e-payment market

There are many rivals, including 2C2P which raised $7 million last year and ispowering a social commerce trial with Facebook. Stripe, meanwhile, is in the region, but it appears to be working on creating demand in the U.S. from overseas via its Atlas project, rather than going for a full-on localization approach.

Unlike its local competitors, Omise is solely focused on digital payments and not cash.

Around 60% of payments online right now in Southeast Asia.

He explained that the challenge is about reaching suitable scale. Omise makes its money by charging 3.65% on transactions, with a one dollar fee for up to $60,000 (1 million THB) withdrawn, but it offers flexible packages for larger customer.

A version of this appeared in TechCrunch on July 21. Find the original version here.