After announcing fundraising plan last year, the fintech platform Transfez that offers digital remittance services today (5/19) just finalized its seed round. This round was led by East Ventures and BEENEXT.

“We are very pleased to have two well-known investors supporting Transfez’s mission. Currently, cross-border payments are complex due to different terms and payment channels in each country. As a result, transactions are expensive and time-consuming. Our goal is to simplify the complex process,” Transfez’ CEO, Edo Windratno said.

The company plans to use the fresh money for product development and market penetration. Currently, Transfez serves the B2C sector offering money transfer services to 26 foreign currencies in more than 50 countries. In addition, Transfez will also expand its services to the B2B payment sector in the near future.

Was founded in early 2020, Transfez has processed a total of IDR1.5 trillion ($105 million) transactions. Apart from the Covid-19 pandemic, they also claim to have experienced a 30 times growth of transactions processed in the past year.

Transfez offers international money transfer services cost up to 10 times lower than conventional banks with an all-digital and real-time process. Customers can send and receive their money in minutes because Transfez has liquidity in every country where the company operates.

“We believe that the Transfez team has the ability to serve millions of Indonesians to send and receive money digitally around the world in a more cost-effective, seamless and secure way,” East Ventures’ Partner, Melisa Irene said.

The rise of remmittance players in Indonesia

Since 2015, there are many remittance services provided by foreign to local platforms in Indonesia. One of the main reasons is to cater for the large number of migrant workers abroad in terms of sending money to their families back home.

The Central Bureau of Statistics (BPS) reports that there are around 276,553 migrant workers abroad. Taiwan, Malaysia and Hong Kong are three most favorite harbor for our workers. Meanwhile, the number of Indonesian students studying in other countries is 20,225 people. Both students and the workforce are the foundation of the remittance business, but the market might continue to widen.

Aside from fintech platforms such as Transfree, Xendit, TransferWise, Wallex, Zendmoney, OY!, TrueMoney, RemitPro which try to offer similar services, banking services like BNI have started to actively develop their technology by establishing strategic collaborations with related parties to strengthen remittance services.

Meanwhile, BRI Ventures is involved in funding Nium, a remittance startup from Singapore.

Yusuf Rendy Manilet, an economist from the Center of Reform on Economics (CORE), said that the popularity of remittances this year cannot be separated from its huge potential. The opportunity remains as digital players are yet to reach all layers put remittances as the next most promising fintech service derivation.

One of the factors driving the large potential for remittances is the number of Indonesian workers and students abroad. Moreover, Yusuf said, Indonesia will experience a demographic bonus. The growth of the productive age will pick up – something he considers reassuring investors of the prospects for the remittance business.

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Original article is in Indonesian, translated by Kristin Siagian