The APAC Data Landscape in 2019

Joseph Suriya, Director, Marketing, Tealium
Joseph Suriya, Director, Marketing, Tealium

With the continued explosion of data from a wealth of connected devices, there is more focus than ever on the way companies collect, manage, and use their data. The last 12 months have seen some big names under the spotlight, but as we shift our attention to the year ahead, what lies in store for digital marketers?

There’s no denying, 2018 was probably one of the most significant years to date in terms of shaping the data landscape. In a year where more than 3.6 million Asian Facebook users may have had personal information inappropriately shared with Cambridge Analytica, data has never been more prominent in the headlines.

And data isn’t set to fade into the background any time soon. Rightly, the world has woken up to the importance of data in our everyday lives and, for companies, the ability to mobilise insights from data to drive decisions across all areas of the business is firmly on the radar.

So, amid the introduction of stronger legislation and increasing opportunity – and responsibility – to harness the power of data, plus the potential lure of artificial intelligence (AI) and machine learning, what will the data landscape look like in 2019?

Customer-centricity is priority

In light of new privacy regulations – led by the EU’s General Data Protection Regulation (GDPR) launched in May 2018 – there’s been greater awareness from consumers regarding the use of their personal data. In a world where technology has fuelled rapid advances in all areas of life – from e-commerce to financial services – legislation has been somewhat slower to keep up.

But, thanks to high-profile breaches and changing laws, we’re transitioning to an era where the importance of personal data is much higher on the agenda. In turn, this is forcing companies to ensure they have a customer-centric strategy in place, which clearly places the user’s experience at the heart of all business decisions, with the power back in the hands of the individual.

Build a data foundation first

It’s tempting for companies to get caught up in an exciting digital future – we have already seen AI adoption rates across Southeast Asia grow from 8% in 2017 to 14% in 2018. And while some countries, like Singapore, are storming ahead in terms of innovations – with start-up companies such as CashShield creating noise on a global scale – the picture varies from country-to-country. Most are still working to get the data basics in place first; after all, even the most advanced of machine-learning algorithms are only as good as the data that fuels them. So, it follows that companies must concentrate on building a strong data foundation before implementing any ‘must-have’ technologies.

Many businesses throughout Southeast Asia are still facing challenges with relying on legacy back-end systems, and their priorities at the moment are focused on connecting disparate data silos. In 2018 we saw the premise of Customer Data Platforms gather pace, as companies switched on to the need for a tool to help them collate, enrich, and manage the high volume of event-level data across multiple channels – both online and offline – to create a comprehensive view of the consumer. Putting these building blocks in place is fundamental to delivering a first-class customer experience, and it’s the point from which every other business decision should pivot.

Now is the time to talk about ethics

And what about the appeal of AI, with initiatives such as facial recognition, voice-activated search, and online chatbots? There’s no denying its potential and – while companies ready their datasets with clean and accurate data to get to a point where they can successfully adopt these technologies – now is the time to talk about the guidelines we need to ensure machine learning algorithms are unbiased and ethical – rather than waiting until mistakes have been made. It’s our responsibility, as an industry, to get this right.

We have already seen the creation of the Singapore Advisory Council on the Ethical Use of Artificial Intelligence (AI) and Data, set up with representatives from Google, Microsoft and Alibaba – designed to develop a trusted and vibrant AI ecosystem in Singapore. And with India releasing an AI strategy discussion paper, the UK creating a Centre for Data Ethics and Innovation, and worldwide issues being monitored through the AI Global Governance Commission, there are signs of a shift across the globe which will continue in 2019.

While this reflects the need for new and updated regulations that are relevant to today’s digital landscape, it also addresses a changing approach from companies about how they view consumers’ data. No longer just an ‘asset’, we are starting to see a real understanding and respect for its true value, with focus returned to the individual – rather than a collective audience segment.

The data landscape in 2019 may follow a theme of regulation – but at its heart will be a strong emphasis on the customer – regardless of what new tech may be dominating the headlines.

Mass Automation, Mobile Growth, and AI Mastery: Key Trends for 2019

The start of 2019 sees digital facing a bright future. Not only are consumers optimistic about smart technology — with 73% in China anticipating a positive impact — but the advertising industry is also flourishing. Digital spend in Asia Pacific hit $70 billion in 2018, and by 2022 that figure will reach $110 billion: over half of the total ad market. 

So, what does this mean for 2019?

According to industry leaders, the popularity of automation will see programmatic become the norm, while mobile retains its advertising crown and TV becomes increasingly entwined with digital. At the same time, marketers will also start to realise that effectively mastering artificial intelligence (AI) takes more than simply tech know-how.

Let’s explore the key trends:

Rashmi PaulRashmi Paul, Commercial Director, Asia Pacific at FreeWheel

“While the adoption of automation has been slower in South East Asia than in other regions, advertisers – in their quest for qualified and measurable audiences – are making it the driver of change in 2019 and beyond. We’ll see less media buying through a site-list or a programme-list only, but a deeper commitment to automated content, not just in standard display and video advertising, but in other areas such as outdoor media.

“With people in the region owning two to three mobiles each on average, the mobile app market will continue to grow in 2019, thanks in part to the popularity of gaming and social media. But we will also see an increase in the OTT market, which hasn’t taken off in APAC up until now – both in app, and through the TV. This will be helped by improving internet strength, making it easier to watch content on the move.”

Luca Mastrorocco, GlispaLuca Mastrorocco, VP Global Sales, Glispa

“One of the best things about pioneers is that they blaze a trail for others to follow. China, for example, has so far led the mobile market: aggressively investing in m-commerce apps and testing new features. It is also the biggest driver of global digital advertising spend in Asia Pacific. But due to the groundwork put in by China, there is now a booming mobile economy and programmatic advertising scene for its neighbours to leverage.

“In 2019, we can expect an influx of new players in automated mobile advertising and app development. And these market entrants will have many advantages. In addition to gaining insight from this mobile advertising evolution – such as the formats that drive high engagement, like interactive ads, and those that inspire use of blockers, like interstitials, they will have an understanding of what works well in their region. This might include offering lower app prices in particular areas and the option to pay via carrier billing. The time is coming for new innovators who have watched mobile advances from the sidelines to put their knowledge into action.”

Satoru Yamauchi, Director of Partner Services, OpenX

“Video already dominates Japan’s digital advertising landscape, with spend set to top $200 million this year. Moving into the new year, video will command even more advertising dollars especially on mobile, where consumers are increasingly spending more of their time. The number of smartphone video viewers will grow to nearly 40 million in 2019 and advertisers looking to reach these audiences will need to build campaigns with a mobile specific user experience in mind. Formats that interrupt user activity or delay content access are likely to irritate consumers and fuel negative brand associations. This is especially true in the mobile context, where large ads block content on small screens, slow down load times and eat into data allowances. To ensure a positive user experience, advertisers should harness engaging ads that give consumers a choice about how much they wish to interact with brands, such as opt-in video, which provides a genuine value exchange between advertisers and consumers.”

Joseph Suriya, Director, Marketing, TealiumJoseph Suriya, Director of Marketing, Tealium

“With a growing emphasis on connected devices, and the subsequent explosion of data, in 2019, there will be even more demand on companies to manage an increasing amount of insights. While in 2018, businesses were keen to harness artificial intelligence (AI) and machine learning, they didn’t necessarily fully understand it enough to utilise it to its full potential. In 2019 we will see a greater focus on the quality of datasets behind the algorithms – which fuel tools such as these – and businesses will look to build a strong data foundation before jumping on the latest tech bandwagon. We think a mantra of ‘go boldly, tread lightly’ will be particularly relevant to many companies. They will need to put in place the tools to effectively collate, manage, and enrich data insights – and be able to connect disparate data silos, such as ecommerce, call centre, and legacy back-end systems to create a 360-degree view of each customer.                                                                                               

“In addition to this, we will see changes to roles within the workforce to better understand technologies such as AI and to cope with the increased focus on data as the basis for business decisions. Already, the World Economic Forum suggests the leading job roles over the next five years will include data analysts and scientists and there will be a focus on training new talent. There is evidence of this taking force with Asia’s investment in education and the digital economy, which will ensure employees are better equipped to manage emerging technologies like AI.” 

With industry innovators poised to drive market diversity, efficiency, and expansion across Asia Pacific, the outlook for 2019 looks promising. Existing forces such as mobile and video will gain greater strength, and emerging developments in connected TV will bridge the gap between online and offline. As long as quality remains the foundation of progress — covering user experience and data — digital advertising will continue to offer equal value for all.

Data-driven Singapore Fintech Startup Delivers AI Credit Scoring

Rely, a Singapore fintech company that provides shoppers with an interest-free ‘Buy Now Pay Later’ service for online retail, recently announced a seven-figure Pre-Series A funding round led by Goldbell Financial Services. Additional funding comes from Octava, a family office based in Singapore and strategic investors from the financial and technology sector.

Rely will use the fresh funding for regional expansion, to scale up their team, as well as support more partnerships across the region with leading retailers.

According to a study conducted by Google and Temasek, the Southeast Asian e-commerce industry is expected to exceed US$100 billion over the next couple of years. Singapore, one of the fastest growing players in the e-commerce industry, is predicted to grow to US$5 billion by 2025.

Tapping on this immense growth in the e-commerce industry, Rely offers retailers and shoppers a way to manage their spending and access credit, without using traditional credit cards.

Rely uses its proprietary decision engine, which harnesses the power of artificial intelligence and machine learning, to help determine shoppers’ repayment capabilities for each transaction. With the use of this technology, spending limits are determined for each consumer. Safeguards are also put in place to ensure that shoppers repay on time, and further purchases cannot be made if payments are not made on time.

With Rely, shoppers can use the ‘Buy Now Pay Later’ service upon checkout and enjoy their products without having to pay the full sum upfront. By linking a debit card to their Rely account, shoppers can split their purchases into three equal, interest-free monthly payments. The initial payment is collected at checkout, and the remaining sum is collected over the next two months.

Based on initial data, this service appeals especially to Millennials, who have distinctive spending habits from past generations. They know what they want, and they seek instant gratification when it comes to their purchases. At the same time, they are cautious when it comes to their spending, and are wary of falling into credit card debt. Rely caters to this audience and the relationship between what they want and what they think they ought to do, allowing them to stay in control of the way they chose to handle their finances.

Exciting times for the fintech and e-commerce sector in Singapore.

56% of Business Tech Environments More Complex Than 2 Years Ago

Citrix recently announced the release of research into The State of IT Complexity in Asia-Pacific and Japan that revealed over half of businesses in Singapore are struggling with complexity, coming in third behind Indonesia (most complex) and Korea.

Key study findings:

  • 56% of Singaporean businesses believe their IT environments are more or significantly more complex than two years ago.
  • 95% of employees are using non-business approved applications to get work done.
  • 42% of Singaporean businesses report using over 100 cloud and on-premise business applications.
  • 93% of Singaporean businesses believe that their organization is missing out on the full benefits of analytics due to the complex and disperse nature of their data and applications.
  • 86% of Singaporean businesses are already adopting cloud technology, higher than the regional average
  • 85% of Singaporean businesses are concerned that they would not be able to respond to a data breach required by law (such as GDPR). Of those concerned, the top reasons include:
    • 48% due to data located in different systems and applications
    • 37% due to time concerns
    • 34% due to a drain on resources

Overlapping systems, applications, and new and old infrastructure cost time, money, and affects innovation. The rise in complexity felt by Singapore’s organizations is holding back digital transformation efforts and restricting cloud adoption.

Full studies below.

The State of IT Complexity in Asia-Pacific and Japan [PDF]

The State of IT Complexity in Singapore [PDF]

APAC Leads Global App Ad Growth with 44% Increase in Ad Requests

Leading app platform Smaato recently announced results from its Global Trends in Mobile Advertising H2 2018 report. The report reveals significant growth across key advertising metrics, including ad request volume and eCPMs.

As advertisers direct more money into mobile advertising and consumers continue to adopt smartphones around the world, demand and supply both increased year-over-year, indicating a healthy mobile ad market.

The highest growth region across all metrics was APAC. India stood out from the pack with a 425% growth in mobile ad requests. This was more than twice the growth rate of the fastest growing markets in EMEA and the Americas, which were led by Spain at 152% and the USA at 170% respectively. India’s meteoric ad request growth is characteristic of an emerging mobile market in which the number of mobile device owners, their time spent on mobile, and overall app downloads all rise quickly.

Ad Request Growth on the Smaato Platform

APAC – 44% Growth EMEA – 23% Growth Americas – 23% Growth
India – 425% Spain – 152% USA – 170%
South Korea – 177% Netherlands – 87% Colombia – 150%
Thailand – 77% France – 82% Argentina – 141%
Japan – 53% UK – 70% Mexico – 83%
Vietnam – 50% Italy – 61% Brazil – 54%

Asia Pacific also saw significant eCPM growth in addition to ad request growth. The top five countries in the region in terms of eCPM growth were:

  1. Singapore -154%
  2. Japan – 125%
  3. Australia – 111%
  4. Hong Kong – 99%
  5. Indonesia – 96%

Alex Khan, Managing Director, APAC at Smaato explains, “The impressive ad request and eCPM growth in APAC are driven by app developers finding new ways to better monetize their content even as consumers are spending more time on apps. Advertisers from all verticals are realizing that apps are where consumers are — and they are directing more funds into this channel.”

He adds, “With app usage increasing across the region, there will also be more monetization opportunities for mobile publishers.”

To learn more, download Smaato’s H2 2018 Global Trends in Mobile Advertising report here.

Japan Paves The Way For Significant Boost In Digital Entertainment 

This past summer, Japan made a legislative manoeuvre that went surprisingly under the radar, particularly given a bright spotlight on the country’s innovations ahead of the 2020 Tokyo Olympics. The country legalized casino gaming, with the first resorts expected in the mid-‘20s and a whole new genre of entertainment suddenly open for business.

Those who keep close tabs on Japanese politics likely weren’t surprised by the move, as it had actually been approved by the body known as the House of Councillors some months previously. Prime Minister Shinzo Abe had also voiced support for the process of legalizing casino gaming both as a means of improving tourism beyond the Tokyo area (which does just fine on its own) and with the aim of stimulating the national economy. Anyone familiar with casino resort tourism around the world undoubtedly recognizes that this is a legitimate goal. Existing casino resort hubs around East and Southeast Asia already do quite well on this front, with Macau reporting 21.9 billion patacas in revenue in the month of September alone (roughly $2.7 billion, for reference). And that’s in a year of recovery following a slight downturn in Macau casino business.

What will be interesting to see is whether or not Japan’s new foray into casino entertainment extends to the digital realm. We don’t know yet exactly how all-encompassing the gambling legislation will be, but it appears that online casino growth will be encouraged, or at least welcomed. And here, we’d be talking about a far bigger business than many people who don’t engage directly with it may imagine. Most are aware that there are massive poker tournaments online, and that slot machines can be played in arcade form. However, there are also other table games in digital form, such as roulette, blackjack, and baccarat, that have become very popular at gaming sites. There are brand new sites emerging for bingo as well, not to mention betting platforms that are closely tied to online casinos. The point is, we’re not merely talking about a few poker sites, but rather a whole industry of real money gaming.

This is an industry that ropes in billions and billions of dollars on an annual basis, and whether Japan simply welcomes existing gaming platforms or spawns the design of new ones, it will seemingly be a new contributor in this market. It’s a massive boost in digital entertainment, and possibly a massive business opportunity as well.

All the Digital Numbers You’ll Ever Need

Ever need data to help you understand the latest digital trends and audience behaviours? Good news: DataReportal is a complete online collection of all the reports published by We Are Social and Hootsuite over the past 7 years, and it’s just launched.

The collection already includes more than 7,500 charts covering people’s use of the internet, social media, mobile, and e-commerce in 230+ countries and territories around the world, and they’re promising to add thousands more insights over the coming weeks as they publish their Digital 2019 reports.

In addition to the reports, the site also includes all the analysis articles published since 2011, from extensive global overviews, right down to commentary on individual data points.

Best of all, they’re making all of these resources available for free, so if you have colleagues, clients, or friends who might find them useful, you only need one URL:

https://datareportal.com

Enjoy.

E-commerce in SEA: Holiday Sales Online Consumer Trends

The friendly folks at Meltwater have just released a new report titled ‘E-commerce in SEA: Supercharging Holiday Sales Through Social Media’ analysing consumer sentiment across South East Asia during the year-end shopping period last year to help e-commerce companies better reach their audiences.

The report found that Christmas shopping pulled in 56% of chatter, while Black Friday represented 22% of buzz. Fast-growing Singles’ Day – a shopping holiday started by internet company Alibaba in 2009 – is credited with kicking off the nearly two-month shopping period, and accounted for 20% of social media conversations.

Within the region, Indonesia drove the highest volume of conversations (57%), which isn’t surprising considering the country’s increased internet penetration and smartphone usage in recent years. Philippines and Malaysia represented 30% and 12% respectively, while Singapore brought in 1% of the buzz.

While the top brands varied from country to country, it’s clear that the marketplace model emerged the real winner. In Singapore, Amazon dominated social media with 51% of online conversations; Shopee led the buzz in Indonesia; Qoo10 was the most talked about in the Philippines; and Lazada emerged triumphant in Malaysia.

There’s more at the full report below.

E-commerce in SEA: Supercharging Holiday Sales Through Social Media [PDF]

Adventures in New Retail: The Subscription Flash Sales Platform

1.DD
Diego Dultzin Lacoste & Delphine Lefay, Founders, OnTheList

The OnTheList flash sale platform fills a crucial gap in the Asian retail industry. By serving as a third-party vendor of members-only flash sales, it not only offers brands an environmentally friendly way to get rid of past-season stock, it also gives brands access to a growing consumer database with a more direct, D2C-style subscription consumer relationship. The two founders of OnTheList, Diego Dultzin Lacoste and Delphine Lefay, talked to Digital in Asia about their online and offline retail platform.

Digital in Asia: How did OnTheList find a niche in the Hong Kong premium retail industry?

Diego & Delphine: Prior to launching OnTheList, we worked in regional and international luxury/premium retail brands in Europe and in Hong Kong. With such a fast moving industry led by seasonal trends, there is often a lot of past-season stock occupying valuable warehouse space with few options to get rid of them. For many brands in Hong Kong, the only options available were either burning or burying the stock – both of which are not environmentally sustainable options.

That was when we saw an opportunity to launch an independent, third-party platform that would work directly with such brands to host flash sales and give life to old inventory that would have otherwise been destroyed. While this has been a concept well established and received in fashion capitals across Europe, we found that there was no such option in Hong Kong. OnTheList was the first of its kind in Asia. We have since held over 150 flash sales in partnership with over 250 premium brands in Hong Kong.

The “secret” here we believe, is our approach. Through the flash sales we host, we are able to offer consumers access to premium products at attractive prices, and brands the opportunity to clear past-season items and connect with new customers. While our sales are members-only, membership is free for sign up. Additionally, we cater to current consumer habits and preferences – opening sales from 8am to 8pm, making it convenient for shoppers popping in before work.

We also bucked the trend of going digital first – we started with an offline channel as we have always believed that physical presence creates a sense of desire for purchase – our physical flash sales are held over a short time frame of usually just four days, with stock replenished daily and sale mechanics changing. We have since extended our reach online for sales in Hong Kong, but our entrance into the Singapore market will similarly begin with sales happening in physical spaces as a priority.

DIA: Why is now the right time for expansion across Asia?

D&D: In the past two years since the inception of OnTheList, we have worked with a variety of brands, from fashion and cosmetics to wine and lifestyle, from mid-range to luxury. We have also kicked off our online platform. While our flash sales platform is well-grounded in Hong Kong, our regional brand partners are always asking for our services in neighbouring countries where there are few options to dispose of old inventory. With that, we decided it was definitely worthwhile exploring options in Asia.

Singapore was our first country in mind due to similar customer shopping behaviour and general lifestyle similarities. This coupled with Singapore’s strong economy and economic policies, makes it a great country for our first step overseas.

DIA: How are consumer retail habits across Asia changing? Any differences to the West?

D&D: There has definitely been a shift in consumer premium retail habits. Many studies state that millennials are proving to be the strongest demographic segment spending on luxury – brands must cater to this change and understand millennial shopping behaviour both in-store and online. While millennials enjoy finer products, they are also a price sensitive demographic and brand loyalty is not as easy to maintain as it was once before. In recent years, both retailers in Asia and Europe have enjoyed huge profits accelerated by Chinese shoppers, whilst Western counterparts who enjoy the luxury as well have a vastly different spending behaviour.

DIA: How do you help minimise the environmental impact of fashion retail?

D&D: On average, 217,000 kg of textiles would be sent to landfills daily in Hong Kong. Through flash sales, brands are able to dispose of old inventory in a more sustainable form as the old stock would not go to waste and brands would still receive some returns on the unwanted inventory. In the past two years, we assisted over 250 brands, across premium fashion, homeware, and cosmetics, in holding over a hundred flash sales and selling over a million items that would have otherwise gone to waste. For items that remain after our flash sales, we always encourage the brand to donate them to charity and continue to help people in need worldwide.

How Blockchain Technology is Reshaping the Future of Global Payments

Since the creation of Bitcoin in 2009, cryptocurrency has been touted as the future of banking, payments and financial services. And the future of every other global industry obviously.

Sometimes blockchain use-cases can seem a little bit of a stretch, but for financial services at least, a fintech fuelled, cryptocurrency, blockchain and smart contract enabled future looks realistic.

In a number of ways, blockchain technologies offer advantages over the current financial system. A case in point is foreign exchange, one of the key speculative use cases for the blockchain maximalist: in short, it’s difficult, expensive and slow to send $10,000 overseas using our current system of banking; but it’s easy, cheap and fast to send the equivalent amount in cryptocurrency, free from foreign exchange fees, in just seconds. But no one has actually proved out this use case. Yet.

Enter Singapore startup TenX. They’ve created a global credit card, using blockchain technology to take advantage of fast and cheap foreign exchange, but running on existing MasterCard and Visa infrastructure to ensure payment is easy and scalable.

On the front end users can make payments anywhere Visa or Mastercard are accepted. On the back end, the credit card is linked to a cryptocurrency wallet, meaning assets are held in Bitcoin, Ethereum or Litecoin. TenX instantly converts the cryptocurrencies stored in the wallet into the native fiat currency when a transaction is made, whatever the location.

A few weeks back Digital in Asia met with Toby Hoenisch, one of the founders of TenX, to talk about their ambitious vision to become the only platform necessary to create a bridge between cryptocurrency and existing global payment systems.

Toby Hoenisch_TenX Co-founder & CEO_photo
Tobey Hoenisch, CEO & Co-founder, TenX

Digital in Asia: Good to catch up Toby. Is it true that you launched your first start-up four years ago? That’s pretty early for blockchain.

Toby Hoenisch: Back then, we pitched another startup, not blockchain. It was the same co-founders or partially the same co-founders anyway. It never went anywhere but we learned a lot of lessons back then.

DIA: What were the biggest lessons?

TB: Get users. Don’t just build and hope for the best.

DIA: That’s solid advice for any startup! So, when did TenX kick off?

TB: Three years ago. And that was still quite early for blockchain, three years ago. I’ve been in the blockchain space for five, six years. Part of the funding we used for the previous startup was through early gains and Bitcoin. I’m not a trillionaire right now like how I might wish, because we spent all the Bitcoin we had back then on the previous startup. But we’re doing quite well for our company, so it’s all goo

DIA: What was the inspiration behind TenX?

TB: Connecting the blockchain and crypto world with the real world. Three years ago, it was still crypto-geeks and nerds like myself, and everyone else was like, “What the heck is this?” And it was really disconnected. We wanted to bring the benefits of cryptocurrency to real people. And the first thing to solve is making it spendable.

DIA: Can you just quickly detail what TenX does and the value proposition?

TB: TenX makes cryptocurrency expendable. We have a cryptocurrency wallet. You deposit Bitcoin, Ethereum, tokens – whatever it is – and we give you a debit card that you can attach to your wallet, and then spend it anywhere in the world where Visa and Mastercard are accepted.

DIA: In many ways, you’re moving into an area that is almost the inverse of cryptocurrency, certainly ideologically. And payments are also seeing more regulation recently.

TB: You’re right, it can be complex. But what we do is simple. We’re basically the bridge to the real world of payments. Right now, we have Bitcoin, Ethereum, and Litecoin. But our goal is to get to 200 cryptocurrency and tokens ready for payments within another year.

DIA: And what do you think is the future of the payment space in the short and long-term? Who will be the big winners and losers?

TB: Very early to tell. Depends on the timeframe. We’re still so early in crypto that what we do actually makes sense. Because we connect this new industry to the existing payment rails that are out there. Visa, Mastercard, maybe UnionPay or Alipay in the future. You have to remember, merchants don’t care about crypto right now because there are not enough users out there. Merchants care about revenue first. So for the next five years, I think it will be players like us bridging crypto to existing payment rails. But once you have sufficient penetration on the general population, you actually can do peer to peer payments. And then you can actually directly own merchant payment relationships. Our business will have to change and adapt because there are major interests betting on those legacy players. Crypto will disrupt, but it will take a while, and it may shape up quite differently to how it looks now.

DIA: So what does the future look like for Visa and Mastercard?

TB: They will still be around for a long time. Simply because they’re already there. But they will have to lower their fees to compete with crypto, and the channels will change. The cards themselves have a ten-year shelf life. You might still be paying using Visa payment rails in the future, but you’ll use your phone or other technology. The terminal will still stick around for a while.

DIA: TenX is based in Singapore. How many people do you have? How have you found Singapore as a place to set up a blockchain business?

TB: We have 60 people in total at TenX, and 80% are based here in Singapore. We’re a global company. Crypto is always global. We do have a big user base in Europe. Mainly because three of the four co-founders are Austrian. We have a very strong German-speaking user base. Singapore is good because it’s a relatively friendly regulatory environment. It was a bit of a bet three years ago as a place to build a cryptocurrency finance app in Asia, but today, it turns out it’s one of the top countries to be as a cryptocurrency business.

DIA: How many users do you have and how fast is your growth?

TB: Maybe I should share that we had a bit of a setback earlier in the year. We launched our cards last year, and we scaled really quickly to 200,000 users towards the end of the year, and then our partner bank lost their license. Their Visa license. So our card stopped working. And now we’re working with five different insurers to deliver a live product. So the growth metrics don’t make sense at this point. We are on it. We have new insurers. We have multiple strategies, and we’re trying to get our own license so we don’t have to worry about that anyway.

DIA: Something similar happened to Coinhako, in that their fiat on and off ramps got locked down. Was your issue a Singapore problem, or a global problem?

TB: No. It was a European bank, actually. The good side to that is that this specific payment bank was also the issuer for many of our competitors. So now we know that 200,000 is not the market users. The market is way bigger than that, and all of those users are waiting for a card.

DIA: Who wants to spend their crypto? The market is so focused around HODL right now.

TB: That’s looking at it in reverse. Of course, a lot of people still look at crypto as an investment and hope it should go up. Our users have passed this step, and are like, “I don’t want the old world.” Because there is more friction in the old world than there is in the new world.

Even though the crypto world is still smaller, the financial services you can access here are still less in number than in the old world, this is changing rapidly. And advanced users want to stay in this world.

Some of them, yes, they want to get the maximum upside, but they stay in this world because it’s a more seamless experience everywhere on the planet. And we just add payments to that, so you don’t have to actually go back.

DIA: How do they get their crypto in the first place?

TB: They are already in this world.

DIA: Sure, but unless they’re mining, sitting on a massive pot of crypto which they’re spending bit by bit, or they get paid in crypto, they’re still going to be operating in the non-crypto world. They’re still going to have a bank account where real money can come in. How many people are 100% in the crypto world right now?

TB: We pay salaries in Bitcoin for a lot of people. It’s just so much more convenient. If you run an international company, a small one, you can’t figure out payroll in every country in the world. That’s hard. Bitcoin solves that problem, super easy.

DIA: Cool. Do you think that supports the Bitcoin store-of-value argument?

TB: I mean, Bitcoin has a volatility problem, which is one of the things that people don’t like, or don’t want to put all their money in it, which is a very valid point. In the crypto world, Bitcoin is still the strongest store of value. If it’s the one you should bet on depends on your personal situation. I would say everybody should have some money in the crypto space, some Bitcoin, and then allocate, whatever.

DIA: So, at the moment, you’re a bridge between cryptocurrency and the world of ‘real’ money. Do you have your own token to facilitate this?

TB: Yes. We have the PAY Token, and we launched token sale last year, June. And we continued to work on the exact model, mainly because the regulators keep changing the rules, but yeah. It’s been working very good. When you compare a token sale or a token, compared to venture capital, venture capital, you get around one, two, three investors. Hopefully, they’re all strategic, which they never are, maybe one.

Or you have like us, 50,000 token holders, probably most of them are users. They’re directly related to you. They will tell you what you do wrong. They will care. They will come to your user testing. It’s just so much better. That’s the huge upside that a token sale can do that venture capital just cannot do. Base it on your boredom, hopefully, you pick the right guy to tell you what to do, but maybe one or two. You have 50,000.

DIA: And that community markets for you as well, and they’re influencers.

TB: Yes. Of course. It just goes hand in hand. It’s like, token holders and users, it becomes like a community form of money, or token, or whatever you want to call it. And it incentivizes people to really stick with us.

DIA: That’s awesome Toby. Thanks very much. Very interesting discussion.

TB: Yeah. Thanks for the chat.

Digital, Tech, Marketing & Start-Ups in Asia

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