Alibaba-backed Ascend Money eyes Singapore for remittance business

Singapore - AN Alibaba-backed payments company spun off from Thai conglomerate CP Group may launch an international remittance business in Singapore as early as next year, its top executive said on Wednesday.

This is part of Ascend Money's ambitious push into the South-east Asian market, with some US$100 million (S$143 million) expected to be spent by the e-payments company in 2017 to bump up it regional presence.

"(Singapore) has an interesting pain point here," chief executive Punnamas Vichitkulwongsa told reporters at a media briefing in Singapore, noting that while Singapore has ample access to banking services, remittance charges for foreign workers can still be high.

"Lucky Plaza still charges quite a bit," he said, referring to the shopping mall on Orchard Road where many foreign workers go to send money home. Mr Vichitkulwongsa himself is well-acquainted with Singapore, having spent some years working with Temasek Holdings and Singtel.

He saw Singapore's regulatory framework as a clear benefit for fintechs, noting the central bank's role as a collaborator with the sector, and its pragmatic approach to regulations. "Singapore will always prosper, because you know you have to evolve." To be clear, Ascend Money is mainly targeting the un-banked in ASEAN, and aims to serve 100 million under-served consumers in the region by 2020. That is about five times of its current customer base of about 20 million.

"We would love to be a pan-Asian financial provider," said Mr Vichitkulwongsa, whose company is now 20 per cent owned by Alibaba's Ant Financial. "We have a strong belief that financial access is a human right."

Ascend Money targets users across six markets - Thailand, the Philippines, Vietnam, Indonesia, Cambodia and Myanmar - through the use of a mobile wallet that not only offers payment, but that can also include investment and insurance options once Ascend clinches licences to offer online wealth management services as Alibaba does.

It has also built an agency network that allows Ascend's customers to withdraw cash from these agents without a typical banking account. This speaks to the large swell of unbanked individuals in South-east Asia, with more than 60 per cent lacking a bank account, said Mr Vichitkulwongsa, citing UN figures. And while those in ASEAN are digitally savvy - with the top users in the world of Facebook living in Bangkok and Jakarta - confidence in internet banking is also shaky. A Thai bank recently had its mobile banking service down for about 10 days, he added.

Ascend Money has over 23,000 agents in Indonesia alone, seven times the number of branches compared to the country's largest bank. It has also tied up with CP's chain of 7-11 stores in Thailand, to boost its distribution network for digital financial services. It plans to raise the number of its agents to 500,000 by 2018 - up by about 10 times the current network.

This article was first published on Dec 1, 2016.
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