Singapore based Xendit, a money-transfer service, has launched its peer-to-peer (P2P) mobile payment application in Indonesia.
Xendit, a mobile wallet that allows consumers to pay each-other without fees, plans to leverage on the growing usage of smartphones and internet penetration in the country. The company is pitching itself as a private money-transfer service that is competing with companies like Venmo in the Southeast Asian market.
Xendit’s co-founder Moses Lo said in a statement the users can transfer money within private groups, as well as chat. Since starting the beta a few months ago, the company claims that 13,000 people are using the service.
“In Southeast Asia, it’s the perfect storm,” Lo said. “One is a huge population with technology, two is nascent financial services, and third is it’s one of the most viral regions. In Indonesia, there’s [greater than 100 percent] penetration for phones. These people don’t have a bank account, penetration credit card is 3 percent, but there’s a huge population with technology.”
Users load money onto Xendit and they can send and request money from friends in the service or through phone numbers. The company not only has to work with Indonesian banks, but also ATM networks, Lo said.
The company is part of this year’s summer Y Combinator batch. The incubator is the only institutional investor in the company.
Xendit admits it may face tough competition from telecom operators, banks and existing players that offer similar service. Services like WeChat that could throw their resources behind a competing product. And although PayPal and Venmo do not offer peer-to-peer payments in Indonesia yet, they apart from the existing “cash culture” are competing products.
“We have to convince people in a cash culture that we’re more seamless,” he said. “Through the market share, cash is still the biggest, and we need to change that.”
Xendit holds money on behalf of the user, and then works with banks to wire money. “It’s a normal banking relationship,” Lo said, but in the future the company wants to have deeper integrations and core banking services. “For now we’re doing payments pretty normally; we’re just doing it in an automated, fast, seamless fashion.”
Many sales in Southeast Asia happen through services like WhatsApp. For example, a merchant may sell something by posting an image to Instagram, which will then turn into a WhatsApp conversation, which then turns into a transfer of money for the purchase, Lo said. Xendit, he said, is geared toward making that more seamless.
“Indonesia is so big, that’s where [we figured] we’d start and want to win.” Lo said. “The vision is Southeast Asia, the Philippines, Thailand, those with similar profiles among other Asiatic countries.”
For now, the service is free. And in terms of building a business, “it depends on what consumers want it to be,” Lo said. The hypothesis, he said, is starting off with payments and then moving into financing