Cross-border payments and innovations in remittance in the post-pandemic world

In this exclusive interview, Ho Chee Wai, Head of Neo Financial Services, Instarem, shares his thoughts on changes in consumer and travel preferences in an endemic world and how it has impacted financial and payment habits.

As borders are opening up, global travel seems to be returning to normalcy. What are the major changes in consumer and travel preferences in an endemic world and how it has impacted financial and payment habits?

The pent-up demand for travel has resulted in the revenge travel phenomenon and prices of airfare at an all-time high. A customer survey Instarem conducted in April revealed that 82% of customers have plans to travel before the end of the year and 59% of them have travel plans within 3 months. Some of these trips are also spontaneous, impromptu, and quick weekend getaways.

This was attested by what Instarem witnessed in our amaze card payments data – a whopping 150% MoM increase since February 2022 in foreign currency transactions through amaze. Instarem’s amaze users are also travelling and spending more on hotels and airline bookings, especially in popular countries such as France, US, Spain, Thailand, and Malaysia. Of these transactions, we identified the greatest amount of spend on amaze across two key travel vendors such as the accommodation on Airbnb and flight bookings made on Singapore Airlines.

As many are travelling and spending more frequently, this also necessitates that we give extra care to the customer experience. The digital transformation that business leaders have been talking about for years was accelerated, and what would have taken a decade or more, was compressed into a month. With security and safety being top-of-mind with consumers, fintech players are spearheading innovations across online payments, cashless and contactless infrastructures, platform interoperability, and convenience.

Consumers are thus demanding a seamless customer experience – airlines must provide an easy way to check-in, online payments must be made effortlessly and flexible ticket refunds that allow change or cancellations subjected to the uncertainties of CV-19 are adopted to ensure a smooth and safe travel experience. With amaze, we are also innovating with customer experience in mind to bring a one-stop payments solution that can serve modern travellers with ease and convenience in a few clicks and taps.

How companies in the fintech sector have helped spur the travel and tourism recovery as border restrictions relax?

Post-pandemic, digitisation and automation have been key. As border restrictions loosen up, fintech firms have helped by easing the frictions normally associated with travel by digitizing processes, whether if it is exchanging currencies electronically, enabling service interoperability through various platforms, or when implementing seamless e-payments.

Instarem is guided by the principle of making payments instant and simple and with travel opening up, amaze has truly helped travellers with simplifying payments while planning and paying for their trips. Spontaneous trips are also simpler because customers do not need to worry about queueing up at money changers prior to their trips and suffer from bad exchange rates.

amaze also makes your overseas trips safer. The less cash you bring, the less risk of theft or robbery. Moreover, with amaze, instead of carrying five physical cards you now have added benefits of just using the amaze card. One less card brought overseas is one less risk.

What are the differences in consumer preferences and demands of cross-border payments across different markets?

Consumers expect quick, simple, and affordable payment solutions that speak to their needs. But how we communicate and deliver the experience through a friendly UI/UX, and receptive customer service, ranges differently across markets.

One of the world’s biggest remittance markets, the Philippines, has around 10% of its population working overseas and sending massive remittances back home each day. They are known as Bagong Bayani, the modern-day heroes who leave their homes so that they can better provide for their families back in the Philippines. Although physically distant, their strong links with their communities, such as extended family, high school, and varsity friends, and even peers on social media are of high importance, which is seen through the spirit of Bayanihan. Bayanihan is the sense of solidarity done without any expectation of receiving something in return, especially through times of difficulty, and one of the ways they do so is through sending money home that has not stopped even when the pandemic hit.

One of Instarem’s Filipino expat users is a large community of Filipino nurses in Australia wiring funds and making money transfers to the Philippines multiple times over the course of the month for family maintenance to support their immediate family back in the archipelago. To reduce the hassle of remitting money at physical locations, Instarem has introduced a feature that lets users in Australia make international transfers directly via their debit or credit cards and allow money transfers to the Philippines with the option to choose cash pay-outs, which is a preferred payment mode for Filipinos. Instarem makes it easy for both parties to send and receive money from Australian Dollars (AUD) or other currencies to Philippine Peso (PHP).

Right across Southeast Asia, there is also a large Malaysian migrant workforce working outside of their home nation, and a significant number of them remit funds back home through daily wire transfers, or queue at money exchanges to convert local currency into Malaysian Ringgit to send home.

With Malaysia being one of the largest corridors among Instarem’s users, Instarem has also witnessed a large volume of payment transactions in both the sending and receiving across the region. We have seen our market share grow by a massive 54% since 2019, putting us in the leading spot against competitors. Our Instarem app allows instant onboarding for Malaysian Nationals and expats through local partners and allows users in Malaysia to send money to beneficiaries in over 55 markets in the world, within minutes, as well as gain faster access to recent transfers in the app dashboard. We are also pleased to share that Malaysia has been added as a real-time corridor for Instarem..

Do you see any role of cryptocurrencies in easing travel, especially now that they are under pressure and meltdown?

Blockchain technology can be a transformative force to increase the efficiency and security of remittances, which would be a highly preferred method for travel and international payment. Blockchain-based money transfers such as through cryptocurrencies, that do not involve real, physical inter-country movement of currencies help to reduce the transaction costs, currency conversion rates and commission fees typically associated with traditional payment systems, thereby helping customers save a significant amount of money.

However, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely and this represents a major roadblock in the path to widespread adoption and the influence that cryptocurrencies will have on travel. The digital acceleration has indeed seen more firms integrating cryptocurrencies into their payment systems and pushing large segments of consumers to create digital wallets, especially in developing countries with poor banking infrastructure. Cryptocurrencies will be an alternative to traditional payment modes, as consumers continue to look for the cheapest, fastest, and most secure platforms for money transfers.

What is Instarem and how does it help in cross-border travel? Can e-commerce companies use it as well?

Instarem is a digital cross-border payment and neo-banking business. We enable payments to over 170 countries, allowing individuals and SMEs to send, spend, and receive money in a simple manner. Headquartered in Singapore, we are licensed in 11 countries, and have offices around the world.

On 23 August 2021, we launched APACs first smart debit card amaze in Singapore. This signifies our commitment to enhancing consumer remittance globally with an all-in-one consumer app that empowers customers to do more with their money in an intuitive, transparent, and cost-effective way.  amaze combines five cards into one, enabling fuss-free switching where users get to choose which of the five cards to link and get up to 1% cashback on top of bank card rewards.

As international travel picks up pace, travellers are looking for ways to get the most value out of their trips and to ensure that their post-pandemic travel takes place with ease. Since travellers today are already subjected to different requirements and regulations in the countries they plan to visit, amaze makes life simpler at least in travel payments. amaze is the only card in the market that allows linking and toggling between 5 cards that do not require any top-ups as users spend directly from their bank cards. While saving on foreign exchange rates which are otherwise hefty with bank cards, it also does not have a spending limit, unlike most multi-currency wallets.

With Instarem’s spend, save, and receive functions, it is also the go-to choice for eCommerce companies to facilitate seamless cross-border transactions with payment service providers, and help them receive payments from their customers from the respective markets in a quick, efficient and cost-effective manner. Instarem offers a range of flexible FX options and 24/7 FX capabilities. It reduces customers’ cross-border fees by pricing in the customers’ local currency, which gives them the ease of domestic payments while allowing the business to absorb exchange fees into the price. With a network in over 100 markets and 65 in real-time, it empowers SMEs to bridge currency borders by tapping into its global reach.