On Wednesday (April 15), Malaysian remittance firm MoneyMatch explained how it has been using Californian FinTech firm Ripple’s technology to “offer cheaper and faster payments to more than 120 countries around the world.”
Malaysian FinTech startup MoneyMatch was formed in January 2015 by three friends who wanted to “revolutionize the traditional financial industry.” This is when MoneyMatch was accepted into an accelerator program called Cyberview Living Labs Accelerator.
In May 2017, Bank Negara Malaysia approved MoneyMatch to “operate within the FinTech Regulatory Framework.”
In April 2018, Ripple announced an API solution called xVia that it said would let “financial institutions and businesses to easily send payments to and from emerging markets by leveraging the benefits of RippleNet — Ripple’s decentralized global payments network.” One of the first five customers for this product was MoneyMatch.
“By tapping our global network with xVia, our customers now access new markets quicker and cost efficiently. All of these customers run into the same problem: building bespoke connections to banks and networks all over the world. It’s expensive and time consuming. xVia enables them to grow their overall market share by reaching new customers in new markets, easier than ever before.”
Then, in October 2018, FinTech News Malaysia reported that MoneyMatch had announced that it had “conducted their first ever live cross-border transaction out of Malaysia on the blockchain.” MoneyMatch’s statement said that they had worked closely with Ripple to “be fully integrated into the RippleNet xVia platform.”
MoneyMatch said that it had “helped a retail user convert MYR to EUR at a significantly lower cost than a bank’s traditional telegraphic transfer.”
Adrian Yap, Co-Founder and CEO of MoneyMatch, had this to say at that time:
“We’re really proud to make this announcement today as we show clear evidence that a FinTech startup made wholly in Malaysia by young Malaysians is capable of integrating into the Ripple blockchain and performing a live legitimate international money transfer from Malaysia to Europe bringing blockchain innovation to the traditional Malaysian financial services industry.”
Well, earlier today, Ripple published a blog post which provided some interesting details from a recent interview that they had had with the MoneyMatch CEO.
Ripple described MoneyMatch as “a cross-border transfer service that helps small and medium-sized enterprises (SMEs) in Malaysia pay their global suppliers.”
Yap started by explaining the motivation for partnering with Ripple:
“Banks typically focus on larger customers who are sending higher volume transactions and can afford higher fees.
“SMEs don’t have much choice other than to accept these same rates, which adds to the cost of dealing with foreign suppliers.
“We worked with Ripple to create an improved cross-border payment process that offers these customers better rates and faster transaction times.”
He then talked about why his firm had chosen to focus on the needs of SMEs and the main problem they came across as a small Malaysian startup that was trying to address this niche:
“All the banks charged the same fees. They were happy simply generating these revenues instead of trying to increase market share by reducing rates.
“We believed that offering lower prices and a simpler way to send money abroad would really benefit SME customers and allow us to capture this valuable market.
“Our challenge was that we were a small start-up from Malaysia, which is not a top-of-mind market for the rest of the world.
“We needed to develop relationships with banks and payment providers all over the world but didn’t have the required credibility or transaction volumes.”
MoneyMatch decided the solution was to join RippleNet:
“After joining RippleNet, we were suddenly a credible partner for all these financial institutions and payment providers around the world. A RippleNet introduction is more like a hug than a handshake.
“We struggled to find a decent European partner and were stuck using the SWIFT system to make payments there.
“Working with RippleNet partners allowed us to cut our costs by as much as 40% and instead of transactions taking at least two days, we were completing payments in just a few hours.”
Next, MoneyMatch had to convince SMEs why it should be trusted with their money:
“SMEs are rightly cautious with their money. Gaining their trust quickly was not something we could hack – you have to earn it.
“We saw businesses start with lower value transactions. Once we had their trust and they saw how much they were saving, these customers began making 4-5 larger payments with us every month.
“Over time, they also appreciate the benefits of same-day settlements, from helping with cash flow management to getting better terms from suppliers.”
Finally, Yap says that MoneyMatch is planning to use RippleNet to help it open up new markets:
“We are always thinking about how we can serve our customers better. That’s why we’re looking to develop partnerships on RippleNet that will help us build more payment and collection facilities on a global scale.
“We want to match the ambitions of our SME customers and be the kind of growth partner that they won’t find at any of Malaysia’s traditional banks.”