A bachelor party in a resort in Phuket sparked off the birth of InstaRem, a digital cross-border payments company based in Singapore. Read on to find out how Prajit Nanu, Co-Founder and CEO, turned his frustrating experience in booking a villa in Phuket into a business that enables individuals and businesses to send cross-border payments at the lowest possible cost and fastest possible time.
Tell me a little bit about yourself.
I started my career in 2002 straight out of college. Had a brief stint in consulting before spending over a decade in IT/ BPM Industry having worked in New York, London and Mumbai with leading firms such as Capita and WNS. My last corporate role was with a Dutch professional services firm, TMF as their Global Sales Director. I live in Singapore with my wife who works in PWC as part of their tax practice. My father was an entrepreneur and built his own business from scratch and I always had an ambition to do something on my own. In 2013 the idea gave birth to InstaReM
What is your business venture about?
InstaReM is a Singapore headquartered digital cross-border payments company. We enable individuals, SMEs and financial institutions to send across payments at the lowest possible cost and fastest possible time.
What is your mission at the outset?
We felt that there is no real cross border payment leader in Asia for Retail and Businesses. Our product aims to solve the transparency and speed issue around cross border money transfers
How did you get your idea or concept for the business?
I had nothing to do with the remittance industry until September 2013 when one of my friends decided to get married and they wanted to organise a bachelor party in a resort in Phuket, Thailand. I was assigned the task of booking a villa for the bash. I Googled, picked a terrific spot, and wanted to send INR 40,000 (US$640) to book the resort.
I called the villa, told them to take my credit card number, and deduct the payment. They said that won’t be possible, and they wanted me to send it to their account as a bank-to-bank transfer. I called up my priority relationship manager at the HDFC Bank in Mumbai for help. He asked me to do a lot of documentation.
Out of sheer frustration, I posted on my social media page that I was looking for a way to send money to Thailand from India. One of my school friends who read it was on a two-year assignment in Thailand, and offered to help. I transferred money to my friend’s account in India, and the friend transferred an equivalent amount from his own account in Thailand to book the villa. He told me that every month he has been moving money from Thailand to India and his bank was charging a fee for the transaction and taking an FX spread cut as well. And that was his first glimpse at this problem.
The holiday was horrible as I spent most of time thinking how we can scale this concept. After tonnes of research and identifying a better way to move money we started.
What is unique about your business?
We are all for our customers by being cost effective, efficient and convenient. We are also building our business in Asia where no one is really focussed. For e.g. in Europe one license activates 32 countries. In Asia, it’s a painful process to apply for a remittance license in each market and takes 6-8 months. By end of 2017 we will have licenses in all key Asian countries which currently no one has.
Who do you sell to and how do you get customers?
Our value proposition is different as per the customer base:
Unlike our competitors who charge a transaction fee and a FX spread we charge a percentage of the amount. If you are sending $1000, our fees will be 0.5% or $5 which includes FX and Transaction fee. World Bank rates our service as the lowest cost in few corridors. In addition to cost we also complete a transaction on the same day or within 24 hours.
Using our local payout mesh in Asia and Europe, Financial institutions such as Banks, Payment processors and Corporates can leverage our platform to make local payments. Our payments are processed on the same day and there are no deductions
We believe that in additional to the typical methods of advertising, word of mouth is the best way to get our name out there and gain credibility. We make use of a host of traditional, digital and on-ground activities to increase our brand awareness and convert users.
For SME’s we are building a digital bank for Asia. We expect to roll this out in Q1 2018 with all features all SME’s expect from lending, payments and transactional banking
Why will customers stay or do repeat business with you?
Convenience and transparency.
What have been the biggest obstacles?
We have had to tackle few obstacles during our journey, some of them are:
1. Hiring – Well-funded start-ups especially in India give a 40-50% hike on base salary while we ask our staff to take a pay cut because we believe you have to join a start-up for right reasons which is not money. It becomes difficult to hire quality staff for younger start-ups like us.
2. Licensing – Some of the licensing information available in Asia is a bit opaque. For e.g. in Europe after a license is applied you need to get a review and notification post 30 days etc
If you had one piece of advice to someone just starting out, what would it be?
Focus on unit economics from day one and find an investor who is aligned with your views on the business. A wrong choice in Investor will slow you down significantly.
Do you have any final thoughts?
Entrepreneurship is tough and you should get in it for the right reasons. From long hours and no breaks to constantly motivate a team when you are searching for sources of motivation. It does look glamourous from outside but it does take a toll on you.
Having said this, it’s the most enjoyable part of my life. From being a concept to 60 staff in 5 countries gives me immense pride.
Who is your biggest inspiration or drive to do what you are doing?
There are quite few global leaders who provide inspiration from Jack Ma, Bharti Mittal, Narayan Murthy, Keshav Murugesh (CEO of WNS) and so on but I have to acknowledge my father as well who build a decent size company in 80’s with no financial backing.
In payments arena, I love what John Kunze has done with XOOM in the US
What’s next for you and for Regit InstaReM?
We hold remittance licenses in Australia, Singapore, Hong Kong, and Canada. We are applying for licenses in other jurisdictions such as Europe and US and this will allow us to increase our customer base massively. We are constantly in negotiations with different banking partners around the world. Having more banking partners allows us to provide a greater range of currencies and thus attract more customers.
We have started a project with a banking partner that will allow us to create a digital bank that will serve individuals and businesses. We are creating a new product for the Singapore market that will focus on blue collared foreign workers. Both products are outside of our remittance core but both will include remittance payments as an offering. By doing this, we are going to attract many new customers from many new and non-traditional sectors.
And most importantly we are committed as a team to be profitable from H2 2018.
Hock Lai has 18 years of experience in the financial industry, having performed roles in both business and technology. He graduated from the National University of Singapore (Real Estate), Nanyang Technological University (Infocomm Technology) and Nanyang Polytechnic (Fund Management & Administration).
He is also a Fellow of the Singapore University of Social Science, advisor to FinTech Startups and mentor to student FinTech projects.
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