The remittance process takes too long. This startup is changing that.
By Leila Lai for TechInAsia
Chynge, a Singapore-headquartered fintech startup which has developed a way to clear monetary regulations on remittance transactions more efficiently across the Asia Pacific region, is now looking to expand its reach.
We want to make [the remittance process] a sub-one minute transaction.
Since its release in Q2 this year, the company has already handled S$2 million in gross transaction volume. It also recently set up shop in Vietnam and Malaysia, beefing up a remittance network that already includes Singapore, Indonesia and Australia.
The remittance process, which usually takes about ten minutes, is much shorter with Chynge’s help. “We want to make that a sub-one minute transaction,” said Chynge co-founder and CEO Joe Tusin.
Revamping the remittance process
Chynge lets customers enter their information into an app and then visit a remittance office for a one-time face-to-face verification with a teller.
Once the account has been verified, customers can send remittance instructions through the app, eliminating the need for subsequent trips to the office.
The app automatically performs compliance checks on the customer’s data, as required by the regulatory authorities of the sending and receiving countries.
To reduce the risk of unauthorised transactions, money laundering, and other illegal activities, it also monitors daily and monthly transaction limits. Digitizing these processes reduces the margin for error and time spent processing each transaction at remittance offices.
How it all started
Tusin and co-founder Naresh Parshotam started the company in October 2014 as a peer-to-peer money changing app, aimed at backpackers and budget travellers. Along the way, they realised that there was a bigger problem to tackle, namely the inconvenience of visiting a remittance agent to transfer money.
Chynge reduces the time spent on the checks required to authorise remittance transactions.
Another aspect of the difficulty was the number of controlled currencies in the Asia Pacific region, an important consideration for conducting business in the area. With government controls on currencies such as the Chinese yuan and Malaysian ringgit, there are multiple barriers to overcome when remitting funds in such currencies.
“We’re not talking about the EU where you can cross 28 states and nothing changes,” said Tusin. “Here, you board a bus (to another country) and you have to change money.”
While Chynge cannot circumvent such restrictions, it reduces the time spent on the checks required to authorise remittance transactions.
Chynge now has 15 team members and one remittance agent partner each in Singapore, Indonesia, Australia, Vietnam and Malaysia. The startup team is currently raising money in Series A funding, said Tusin, declining to reveal the names of early angel investors as they are mostly private individuals.
Although the founders have yet to settle on an ideal fee structure for their business, Chynge has been able to achieve a monthly recurring revenue of S$50,000.
CIMB Private Banking economist Song Seng Wun said that the startup’s success would depend greatly on its ability to prevent abuse and avoid contravening the various countries’ regulations.
“Consumers cover many types, law-abiding consumers and crooks as well,” said Mr Song. “The app’s usefulness is as good as its ability to continue to expose high-risk transactions in a fairly seamless manner, without breaking any laws.”
Mr Tusin hopes Chynge will eventually provide solutions to other regions with close trading ties and multiple currencies like the Asia Pacific.
“It’s a regional problem and it’s a global problem, but [we will] just focus and get it done here in Asia Pacific,” he said. “Then, the next thing is South America and then Africa.”
This article is part of Tech in Asia’s campus outreach initiatives, where we partner up with Nanyang Technological University’s Wee Kim Wee School of Communication and Information (WKWSCI) to allow their Tech & Startup Reporting Lab students to showcase journalistic pieces. These students report from a newsroom at Blk 79 at One North. For more pieces within this collaboration, read here.
First appeared at TechInAsia