Who’s who at Malaysian fintech firm Boost

In The Top Up this week, we analyze the org structure of Malaysian fintech firm Boost and if Apple’s BNPL product could affect Indonesian firms. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If you’re not a subscriber, get access by [registering here](. Written by Budi Sutrisno Journalist Hello {NAME} ​​ I don’t consider myself extremely patriotic, but seeing Indomie - a local brand of instant noodles - being admired in other countries gives me a good feeling. Despite the cross-border popularity of the instant noodle, Indomie creator Salim Group can’t just be a one-trick pony. Over the years, the biggest Indonesian conglomerate has diversified into various industries, including digital ones. Malaysian fintech firm Boost shares a similar story: its telecom parent firm, Axiata, ventured into the startup world and eventually was drawn to digital banking. However, unlike the family-owned Salim Group, the Malaysian government controls Axiata through Khazanah Nasional, Malaysia’s sovereign wealth fund. My colleague Emmanuel maps out Boost’s structure in this week’s Big Story, where you will find out more about how the fintech company arranges its key resources. The CEOs of the company’s different verticals are all veterans at Axiata, and in a sign of its importance, Indonesia - where Axiata is present through the XL brand - is the only overseas market with its own CEO. Interestingly, though, even if it’s state-run, that doesn’t mean the Malaysian firm is involved in every single government initiative - other e-wallet providers like Grab and Shopee still have the upper hand in the country. In other news, Apple announced earlier this month that it will launch a buy now, pay later product in the US. If it rolls out the service in developing markets like Indonesia, how much will it affect local players? -- Budi THE BIG STORY  [Org chart: The people behind Boost]( We look at the captains steering Boost as it transforms itself from an e-wallet provider to a fintech group. THE HOT TAKE Will Apple ride the BNPL bandwagon all the way to Southeast Asia? Here’s what happened: - Apple announced that it would soon be offering a buy now, pay later (BNPL) product called Apple Pay Later as an expansion of its e-wallet. - The news has put other US-based players like Affirm and Block in a difficult position. - Apple will initially launch the service in the US, but it’s unclear if the company will also offer it in other markets. Here’s our take: BNPL players in the US and Europe are watching the launch of Apple’s BNPL product with [some apprehension](. It’s a natural response - Apple is a cash-rich giant with [over a billion iPhone users]( globally. For now, the service is launching only in the US. Whether the company would enter developing countries like Indonesia and other parts of Southeast Asia remains to be seen, but if it does, it will likely face an uphill climb. The first factor might just be Apple’s iPhones being less popular in Southeast Asia’s developing countries, where it is positioned as a luxury brand. As of July 2021, Apple had a share of [less than 9%]( in the mobile phone market in Indonesia, lower than about 17% of the company’s share in the region. The only market where Apple reigns supreme is Singapore - it owns 28.71% of the city-state’s smartphone market share in 2021. In the US, two-thirds of BNPL users are considered to be [subprime consumers](. In Southeast Asia, the main target of many fintech startups are similarly [subprime consumers]( who were previously underbanked or even unbanked. That’s not to say that affluent consumers in countries like Indonesia would outrightly reject BNPL. But will they be willing to go into (short-term) debt for a nonessential purchase? Maybe if the BNPL provider partners with higher-value retailers. But it would also compete with credit cards. For instance, banks like Bank Central Asia have long provided credit card users with 0%, 12-month installment plans for purchases like electronics or high-end fashion items. (For what it’s worth, Apple Pay Later is also interest-free, like Singapore’s Atome. Indonesian players, on the other hand, usually apply about [2% to 3% interest rates]( The current competitive space is also another factor. Besides Apple, global BNPL players like Affirm, Klarna, or Afterpay are also not yet present in the region. The existing BNPL companies here largely consist of homegrown firms who - unlike the Western players - also provide diversified offerings tailored to their target market’s needs. For example, both Akulaku and Kredivo provide services like online lending and have recently moved into digital banking. Stepping into the digital space provides these players with a competitive moat should Apple decide to enter the region. In fact, Akulaku’s total loan disbursement in 2021 exceeded [US$2.2 billion]( nearly doubling the company’s BNPL and cash loan volume. On the brighter side, some people on Wall Street argued that Apple’s BNPL product could be [an endorsement of the market’s popularity]( rather than a threat to existing players. Akulaku’s chief financial officer, Fan Zhang, agrees, saying that Apple’s entry in the market is “good news” because it proves the sector’s continuous growth and popularity, especially among young consumers. “How to convert browsers into buyers, help merchants capture every possible sale, and amplify merchants’ gross merchandise value (GMV) will be the goal that every player will achieve in the future,” Zhang tells Tech in Asia. On paper, the BNPL market still has some room for growth. In 2020, an estimated 1.2 million people in Singapore (21% of the population) and 7.8 million in Indonesia (less than 3%) have used a BNPL service, according to [Statista](. Despite the recent [slowdown]( in the West, the BNPL industry is still expected to see a yearly [61.5% growth]( in 2022. At the same time, the larger question remains: as BNPL’s struggles meet the economic downturn, [for how long can they keep it up?]( – Budi NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [ComfortDelGro partners with Alipay+ for foreign e-wallet payments in SG]( With this partnership, passengers of Comfort and CityCab taxis will be able to pay for their fares using Touch ‘n Go eWallet or Kakao Pay. 2️⃣ [Razer’s fintech arm acquires Indonesian payments platform]( The acquisition will complement Razer Fintech’s B2B unit by providing cross-border payments for the unit’s 60,000 merchants in Indonesia. 3️⃣ [Singapore-based Crypto.com to lay off 260 employees]( The number of affected employees accounts for 5% of the company’s workforce. 4️⃣ [Akulaku to increase stake in Indonesian digibank to 40%]( The fintech lender is raising funds ahead of a planned [SPAC]( merger with Patrick Grove’s Catcha Investment Corp. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preferences center. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894