Wallex Aims at the SME Segment, Facilitates Cross-Country Transactions

Compared to business fintech other, remittance not as busy as his brother because of the strict regulations that overshadow him. Nevertheless, this business has a business potential that is no less tempting because the potential is still controlled by banks.

Startups fintech remittance wallex seizing this opportunity by inaugurating its presence in 2018. The proposition offered by Wallex is that it wants to make it easier for SMEs that have received little attention from banks when they want to conduct cross-border transactions.

“SMEs in Indonesia need to make international payments for several reasons. From paying suppliers, paying remote staff, to paying between companies, all these needs have to be done by SMEs. However, they struggle with limited service provider options, exorbitant fees, and outdated banking procedures,” said Wallex COO Hiro Kiga when contacted. DailySocial.

He continued, so far the remittance services provided by banks have adjusted rates for large companies that have become established relationships. Whereas wallex, has served more than 20 thousand customers who come from SMEs and businesses of all shapes and sizes.

In addition, most banks provide a limited choice of currencies only around 10 to 16 currencies. As a result, sending unsupported currency will be a challenge with money being diverted to a center, such as Singapore, and then only to its final destination.

The transfer fee finally swelled and did not happen automatically real-time. Meanwhile, Wallex is able to support payments in 47 currencies through its network and most are sent within a day if funds are deposited before the daily deadline. "We have payments from SMEs to exotic currencies such as Baht, Peso, Dong, Won, Riyal, Rupee and others which are not normally supported by banks in Indonesia."

Not to mention, due to the lack of competition in this area, banks charge large fees for all foreign exchange fees and margins. While on the other hand, assisted by a strong technology network, Wallex is actually able to make business partners save up to IDR 2,4 million for one transaction of $ 25 thousand.

Another limitation, most banks only allow transactions up to $25K through banking online, more than that must go through the branch office. “Walex provides experience full online, all transactions can be done online online in a manner that ensures safety and limits on the amount sent.”

The competitive side offered by Wallex is expected to attract more SMEs to switch from banking services which are actually less friendly for this segment.

Kiga also gave an example, one of the users is Investree. Thanks to this partnership, Investree can save up to 70% in terms of costs and time for international payments. Then there is a company fintech local users who use Wallex services to transact up to $10 million per month.

Apart from Wallex, currently there are several other remittance platforms that have been operating and have licenses from the authorities.

Wallex business development

Wallex CEO Jody Ong added, in the last three years (until June 2021) Wallex has processed $2 billion in GTV transactions (gross transaction value). This performance is quite encouraging in the midst of a pandemic that has resulted in a decline in global trade volume.

When viewed industrially, it is claimed that Wallex processes around 8%-10% of the volume of outgoing remittances processed by non-financial institutions from Bank Indonesia records. “We are a trusted partner for BI and work closely with them to deliver a strong payments ecosystem in Indonesia,” said Ong.

Breaking down further by Ong, of the total volume processed by Wallex, the most popular destination countries are Singapore, the United States, Europe, China, the United Kingdom, Hong Kong, and Japan. In this regard, Wallex also opened a branch office in Hong Kong which began operations in the first quarter of this year.

Especially in Indonesia, which is Wallex's main market, also opened other branch offices in addition to Jakarta. The city chosen is Surabaya. Ong explained, Surabaya is the 2nd largest city in Indonesia and is a port city. "We believe that there are many import-export activities in Surabaya. Surabaya is also known as pintu East Indonesia Gate. We see a lot of growth opportunities here.”

This year, Ong is aiming for aggressive growth with a growth target of 4 times the total funds processed through Wallex Indonesia.