This week, we put the spotlight on Curfex, a P2P international money transfer platform in Hong Kong. Founded in 2016, Curfex currently allows users to send money between the Hong Kong and South Korea corridor. They will be launching more Asian-Oceanic currencies soon, including Australia, Indonesia, Singapore and Malaysia.
We spoke with founder Wee-keat Lee for more insight on Curfex.
OKLink: Thank you so much for spending time with us, Wee-keat. Let’s start by talking about yourself – what were you doing before Curfex?
Wee-keat: That’s a long story actually. I was an equity analyst at DBS for 5 years before I made a transition from being a financial analyst to becoming a corporate strategist. Later on I worked as a management consultant for another year.
OKLink: What brought you to the remittance industry?
Wee-keat: It’s a bit of everything. I’m Malaysian, and I constantly have the need to send money back to Malaysia. One of the frustrations I had was poor transparency and a total lack of control. Whenever you send money back to Malaysia, the Hong Kong bank would not be able to tell you what the exchange rate is. You can only send the amount back, the Malaysian bank will then determine the rate band, and then the Hong Kong bank will tell you how much you manage to get your transfer through. Most of the time you end up paying quite a lot of fees transferring back to Malaysia.
Over time as well, whenever my friends and I get together to do some investments abroad, we always have similar problems sending money overseas because the fee charged would be quite high for certain currencies. When we saw there is a rise in P2P transfer in Europe and the U.S. like Azimo, Transferwise, WorldRemit, and so on, we were looking for the Asia alternative but couldn’t find anything in Asia.
So all of these things together, was how the idea came about.
OKLink: Can you tell us a bit more about the latest developments at Curfex?
Wee-keat: Sure. Curfex started last year and we got our MSO license in Hong Kong in April 2016. We’re on beta right now but we’re down to the last bit of system integration. After that we can open up the platform and launch the Hong Kong and Korea corridor. We charge customers a flat 1% fee regardless of transaction amount and the exchange rate is always the spot rate.
OKLink: What’s the structure of your team?
Wee-keat: There are overall about 6 parties. I have my partner in Korea running North Asia including Japan, and a partner in Malaysia looking at the South Asian markets. My whole development team is based in Malaysia and I have two partners in Australia looking at the Australia and New Zealand markets. So all in all, I have 2 guys in Korea, 1 in Japan, myself in Hong Kong, 6 in Malaysia, 2 in Australia.
Curfex attended the first FinTech event #techinasia Tokyo in September 2016
OKLink: What are the corridors that Curfex specializes in?
Weakeat: We’d like to see ourselves upgrading and focusing on the Asia Pacific region, with emphasis on the South Asian corridors. But like I mentioned earlier, what we currently have is Hong Kong to South Korea and vice versa.
At the inception of Curfex we identified 12 markets in the Asia Pacific region – including six in South East Asia and six in North Asia, Australia and New Zealand. The idea was we looked at the flow of funds between these 12 countries and realize they are actually quite balanced among these countries. It is from this basis that we wanted to start building the platform.
OKLink: What customers are you most excited to serve?
Wee-keat: Ideally we’d like to see ourselves as a platform that’s helping a lot of migrant workers save a lot of money because they are the ones who are actually paying the highest fees sending money back home. It’s fascinating that at this age a lot of things are still murky. Many of us take things for granted and don’t question the rates. The truth is banks are able to give better rates to priority customers but not smaller individual clients. When it comes to migrant workers, they actually lose a lot of money to the system. That’s where we want to step in and help.
In terms of geographical location, we’re looking at places like Indonesia, Thailand, Malaysia to a certain extent, and going further into Vietnam as well.
OKLink: What is the biggest challenge in opening corridors?
Wee-keat: I think the biggest challenge is probably understanding the culture, because not every country goes by a rule book. It’s also important to understand the nuances and history behind the industry. Having that understanding will help you to better approach, or to take the right measures in things like applying for licenses.
The thing with South East Asia is that the culture is very different, and the pace is a lot slower. The application can take a little longer than what you’d expect. For example we submitted the same MSO license applications in some of the South East Asian countries and Hong Kong. Hong Kong was able to process it in the span of a couple months, while South East Asia basically came back with a lot of different questions. There is a lot of red tape involved and it’s always an ongoing process.
OKLink: Do you need an MSO license in every country you operate in?
Wee-keat: We go two routes – for the first route we try to get our own MSO license, and for the second route we try to approach licensed players and try to partner with them. Some of the low hanging fruits that we usually go for are brick and mortar businesses that have not opened up their electronic or digital businesses. We help them to digitalize their business and offer them the portals that they need. We help them to open up more corridors at the same time while using their licenses to service other countries.
OKLink: Do you currently have any customers or transactions?
Wee-keat: As we are on Beta right now, we are very selective about who we service at the moment because it’s a period when we’re not only testing our systems, we’re also making sure that we’re gathering enough flow of fund between those countries to balance it out.
So right now we’re exclusively working on two customers, one is a corporate customer in Vietnam trying to send to places like China and Singapore; the other is an individual a property investor in Hong Kong trying to send to Japan for its investment property in Japan.
OKLink: Sounds like you guys are targeting only businesses at this stage?
Wee-keat: Correct. That’s the first thing because we need businesses to make sure the fund flows are stable. Individuals are actually quite volatile because you can’t predict when someone will send money abroad. If you just have retail or you are not able to project or estimate where the flow of funds is, you may be a little steered toward one country and you have trouble meeting the liquidity of another country. But if you build a base with the businesses, when the retail comes in, it doesn’t actually fluctuate that much or not as volatile as could be.
Eventually we would like to extend our services to migrant workers. At the end of the day that’s the community we’d like to help with because while businesses appreciate the convenience, their actual savings is not as much as with migrant workers.
OKLink: What does your typical day look like?
Wee-keat: It’s a bit of everything. My partners say I’m very convincing, so every time we need to convince a regulator, or a partner, I’m there. That’s my primary role – which is also why I’m flying a lot. Partially this is what I was trained up to do as an analyst, because whenever you sell a stock you have to market the company really well. My team is also everywhere so I have to constantly get in touch with them and make sure that everything is going according to plan.
OKLink: What are the biggest opportunities you’re seeing in the remittance industry?
Wee-keat: The most important thing is working together. If you are competing with the different operators out there, essentially what you’re doing is you’re ring fencing your own customers. And when everyone starts to ring fence their customers, there’re not that many customers to go around. But if you’re able to open yourself up and work with others, then their customers can be part of your customers, and with that critical mass can the true P2P model actually work.
OKLink: That sounds very much like why we are building the OKLink network in the first place – to connect players in the remittance industry, big and small. In what area do you think OKLink can help your business the most? How are you planning to use OKLink?
Wee-keat: Real time turnaround. We tell customers we want to send money under one business day. It offers them more control so that they don’t have to wait a few days. We are talking about using OKLink for Hong Kong and Singapore, and potentially also other corridors.
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