Indonesia is not only Southeast Asia’s many inhabited country, but also one of the world’s fastest-growing economies. But many people, particularly outside of major cities, still do not have access to standard monetary services like checking account. Payfazz is among a number of tech startups focused on resolving that issue by finding innovative ways to provide more Indonesians access to monetary services. The business announced today that it has actually raised a $53 million Series B led by B Capital and Insignia Ventures Partners.

Previous investors, consisting of Tiger Global, Y Combinator and ACE & & Business, also returned for the round. New backers include strategic financier BRI Ventures, the venture arm of BRI, among Indonesia’s largest banks. Payfazz’s last round of funding was a $21 million Series A revealed in September 2018, led by Tiger Global. Its total raised to date is now more than $74 million.

There is a growing list of Indonesian monetary tech start-ups, including Modalku, KoinWorks and Kredivo, that concentrate on customer and small business financing, while bigger and more diversified tech business like Gojek and Grab are working their own online payment tools and other services. Payfazz differentiates with a portfolio of mobile services that make it easier for Indonesians to manage routine financial jobs, consisting of expense payments and loans, even if they reside in rural areas without banks. The business says it presently serves 10 million regular monthly active users, and plans to broaden its offerings to consist of more digital financial items.

Founded in 2016 by Hendra Kwik, Jefriyanto and Ricky Winata, Payfazz is an alum of Y Combinator’s accelerator program.

The company utilizes a network of monetary representatives to reach customers because numerous banks don’t open branches in backwoods, Kwik informed TechCrunch. “Due to high repaired expenses, conventional banks find it economical to run just in cities and urban locations with high density and foot traffic,” he said. “This leaves a huge unfinished and underserved banking need in backwoods where banking access is really challenging.”

Payfazz’s network presently consists of about 250,000 agents, most of whom are located in small shops. Users deposit cash with the agents, who function as go-betweens with banks. This enables Payfazz’s users to have a balance they can use to pay phone, electricity and other expenses. Payfazz likewise recently introduced loans and payments for offline sellers.

Kwik stated Payfazz constructed a representative network because even though smartphone penetration is high in Indonesia, many people haven’t utilized direct digital banking services before, so talking with a Payfazz agent helps acquaint them with the procedure. Given that most of its representatives are based out of warung or kirana shops, or area shops that sell food and other requirements, they are simpler for individuals in small towns and rural areas to access than banks, Automated Teller Machine or convenience store chains.

“Our agents are small businesses and individuals who have lots of traffic from backwoods’ populations in their locations. It can be warung and kirana stores, telco stores, small restaurants or even someone’s home,” Kwik said. “They are the ideal profile to become our representatives since they’re everywhere dispersed and have high coverage in backwoods.”

He included that Payfazz likewise offers agents a chance to make additional income. Payfazz takes a 0.5% to 1% commission on every transaction, and representatives are allowed to set the margins they charge clients for transactions, usually between 5% to 9%. Prior to signing on a representative, Payfazz screens them using KYC (“understand your consumer”) and confirmation technology to determine trustiworthiness, traffic and sales potential.

While Grab Financial and other Southeast Asian fintech companies might eventually end up being Payfazz’s rivals, Kwik said he currently sees them as possible partners.

“The factor is merely due to the fact that the majority of these suppliers still focus their market and resources in the cities and city areas, like a lot of the traditional banks. Meanwhile Payfazz focuses all its market and resources in rural areas,” he included. “Payfazz can help other banks and financial company to broaden their reach to rural areas and capture hundreds of millions of users and billions of dollars of profits opportunity there.”

In a declaration about the financing, Insignia Ventures establishing handling partner Yinglan Tan stated “We have been privileged to have actually supported Payfazz given that their early days. Our company believe that this course to taking their fintech ecosystem from Indonesia to the rest of the region will fulfill the pressing needs of many more of Southeast Asia’s digital consumers, and are delighted to see how Hendra and the Payfazz group will develop on top of the portfolio of services that countless Indonesians are already utilizing.”

Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.