Payfazz Invests $30M in Xfers, Forming Fazz Financial Group

Fazz Financial Group: A New Force in Southeast Asian Financial Inclusion

Payfazz and Xfers, both companies dedicated to broadening financial access throughout Southeast Asia, have announced the formation of a new holding company, Fazz Financial Group. This strategic alliance involves a $30 million investment by Payfazz, an agent-based financial services network operating in Indonesia, into Xfers, a provider of payments infrastructure.

Strategic Roles Within the Group

Xfers, headquartered in Singapore, will function as the B2B and Southeast Asia division of Fazz Financial Group. Simultaneously, Payfazz will maintain its focus on expansion within Indonesia, continuing to leverage Xfers’ existing payments infrastructure. Both entities will retain their individual branding while collaborating under the umbrella of the newly established holding company.

Shared Origins and Accelerated Growth

Both Payfazz and Xfers are graduates of the Y Combinator program. Their common objective is to deliver financial services to a wider segment of the Southeast Asian population, including those without traditional bank accounts. According to Xfers co-founder Tianwei Liu, discussions regarding a potential merger began in early 2020, driven by their aligned visions.

Liu further explained that the COVID-19 pandemic significantly increased the demand for digital payments and financial services, particularly in rural Indonesian areas, presenting a substantial opportunity for growth.

Leadership Structure

Hendra Kwik, co-founder of Payfazz, will assume the role of Group CEO for Fazz Financial Group. Tianwei Liu will serve as the Deputy CEO, while continuing his leadership role at Xfers. Robert Polana, formerly the CFO of Tiket.com, has been appointed as the Chief Financial Officer of Fazz Financial Group.

Payfazz's Extensive Agent Network

In Indonesia, Payfazz has cultivated a network of 250,000 financial agents. This network extends financial services to individuals in rural communities often underserved by traditional banking institutions. Customers can deposit cash with these agents, utilizing the funds to cover expenses like phone bills, electricity costs, and other payments.

Payfazz, which secured $53 million in Series B funding in July from investors including Tiger Global and Y Combinator, also provides loan products and payment solutions for offline retailers. As part of Fazz Financial Group, the company will continue to develop its agent banking network.

Xfers' Evolving Payments Infrastructure

Payfazz utilizes the payment infrastructure developed by Xfers to facilitate digital payment acceptance. Initially launched six years ago with an API for bank transfers, Xfers has broadened its offerings to encompass payment acceptance tools for businesses, fund disbursement and transfer solutions, and a cryptocurrency wallet.

In 2020, Xfers was granted a Major Payment Institution license for e-money issuance by the Monetary Authority of Singapore.

Expanding Regional Reach

Xfers will continue to support clients in both Indonesia and Singapore with its payments infrastructure. This infrastructure enables acceptance of bank transfers, e-wallet funds, and payments via convenience stores and agent banking networks, such as Payfazz. Through its agent banking collaborations, Xfers currently reaches over 10 million underbanked consumers in Indonesia and intends to expand its operations into Thailand, the Philippines, Malaysia, and Vietnam.

New Product Launches Planned

Fazz Financial Group is preparing to introduce two new products later this year. These include a zero-integration payment solution tailored for Singapore-based merchants and a single-integration solution designed to connect various local payment methods across Southeast Asia.

Addressing Fragmentation in Southeast Asian Payments

Liu emphasized that, unlike the United States, Southeast Asia’s payments landscape is highly fragmented, even within individual countries. Consumers frequently employ multiple payment methods. A unified integration for payment methods across Southeast Asia will provide brands with a valuable growth pathway when entering new markets, enabling faster scalability.

“The surge in online sales and transactions across Southeast Asia, accelerated by the COVID-19 lockdowns, has created a significant demand for online payment solutions for businesses and merchants throughout the region,” Liu stated. “These new solutions will empower businesses to quickly and easily accept online payments with a streamlined integration process, minimizing the complexities of regulatory compliance and technological development.”

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