1. What does your company do?
InstaReM is a Singapore-headquartered cross-border payments company, with presence across Asia-Pacific, North America and Europe. Starting its operations in Australia in 2015, today, InstaReM has presence across 34 countries including Australia, Singapore, Hong Kong, United States, Canada, Malaysia, India and European Union. InstaReM has created a unique global payment mesh, which is being leveraged by financial institutions, corporations and individuals to make fast low-cost cross-border payments. Currently, InstaReM powers local payments to more than 55 countries and with 8000+ banking partnerships worldwide, it is able to reach out to 3.21 billion banked people across the globe. It also serves larger institutional and corporate clients with InstaReM MassPay B2B product, which is an international business payments platform with bulk and customized payments facility, multi-currency payments and accounts and a host of other time and cost-efficient payment features.
In short, we help individuals, Businesses and Institutions to move money across borders quickly and at most reasonable costs.
2. What challenges or opportunities do you foresee in your space in the next 2-3 years?
Money Services Businesses are built on trust and it takes an extraordinary amount of time and effort to build trust. Within four years of commencing operations, InstaReM – a relatively young fintech start-up – has managed to acquire Money Services Business licenses/approvals in highly-regulated markets including Australia, Singapore, Hong Kong, Malaysia, India, EU and the US on the back of its strong credentials. Scaling is extremely important for us, and for that, InstaReM has to be present in all high-traffic money transfer corridors. I think one of the biggest challenge in our business is getting regulatory/approvals licenses, especially in Asia. Unlike EU, where a single license from a member state gives access to the entire EU market, one has to acquire separate licenses in each individual country in Asia. We see this as a continued challenge for the next 2-3 years as regulators take cautious approach – rightly so – before extending licenses/approvals for a business that involves people’s money.
Another challenge is getting customers to move to digital platform from traditional methods. There is a general inertia among older generation in exploring digital platforms. But with razor-sharp focus on lowering of costs and superior customer experience, our customer retention rate is as high as 80-85%.
Acquiring right talent is expected to be another big challenge for us in the next 2-3 years. On one side, it is difficult to get right talent with necessary skill-sets, on the other hand, the cost of talent has been rising.
Estimated at US$ 689 billion in 2018 by the World Bank, remittances is a huge global business touching close to 1 billion individuals (266mn migrants and their families) worldwide, especially in the emerging economies. The opportunity to serve this market is huge. Unfortunately, these customers get a raw deal from the traditional players like Banks and Money Transfer Operators, who take away an average of 7% from each cross-border transfer. However, each dollar saved in remittance costs could mean better education, better healthcare and better nutrition for recipients, especially in the developing economies. By giving the migrant a better value for their money with our Zero-Margin Fx rates and low transfer fees, we aim to empower their recipients to #DoMore with their remittance receipts.
3. Do you have any plans to grow your business outside of Singapore?
As mentioned above, InstaReM already has a growing presence outside of Singapore. We have licenses/approval for our money transfer business in 34 countries. We continuously explore opportunity to expand our business in the newer markets. Though I must admit that acquiring money transfer license/approvals is not very easy, especially in Asia. We have applied for licenses in Indonesia, Japan and Thailand and expect them to come about in this year. We will be looking to expand into the other markets like Latin America, the Middle East and Africa once our Asian, European and North American operations stabilize.
4. If you could ask for advice from any business role models, who would it be and why? What would you ask them?
My role model is every startup founder who has raised very little capital and made his business successful and profitable. Start-up founders occasionally get lost in raising capital and focus on that instead of building a credible business. I believe you should raise less but build a profitable business. In the global business universe, I admire Jeff Bezos of Amazon for his ability to foresee the potential of internet to completely disrupt the way we shopped and way the retail industry functioned just a decade ago.
5. Any word of advice for emerging Fintech start-ups or other entrepreneurs like yourself?
From a fintech perspective, my advice to the entrepreneurs would be to get their model correct. If the business model is flawed, even best of the service/product can bomb. Always focus on customer and ensure that they are getting real value from your offering.
Second, have a good team in place because in the end, the people who backed up – and this is based from investors who have backed us and from investors who didn’t – investors like to back up good teams. They look at an entrepreneur and decide if the team is smart and can evolve and emerge stronger from challenges. They don’t want to give money to someone who will run if tough times roll.
Third, choose your investors carefully. Very young start-ups pick their investors carelessly, and that’s bad. Often, young start-ups make the mistake of picking the wrong investors. These are investors who have the money, but do not share the same vision as the start-up or their entrepreneurs. A bad investor is bad for your business, and could get you to fold really quickly. It’s like a getting into a marriage with them – one with arguments, but at the end of the day, you are able to sit at the same table and sort out differences. Our experience is that you can choose people who are of lower valuation but you can get higher returns. Your relationship with your investor has to be good – he must be someone that you wouldn’t mind going out for coffee or a beer with. It shouldn’t be based on fear. And my rule of thumb is never get money from a VC whom you wouldn’t be able to call at midnight to tell them that things have gone wrong.