Southeast Asia is set to become the fourth-largest economy by 2030. Investors and global companies have their eyes set on the region, actively seeking to pour money into partnership and investment opportunities. Recently, the world’s leader in digital payments, Visa entered a partnership agreement with Razer, a Singapore-based lifestyle brand for gamers, known for its gaming laptops.
From the 660 million population in the region, around 430 million remains unbanked. This opens an opportunity for companies and start-ups to create their own FinTech solutions and bridge the gap between banks and consumers. Razer is not an exemption. The gaming company first launched its digital wallet in Malaysia mid-2018. Then recently, the payment app expanded its services to Singapore and took on its second market. The digital wallet, Razer Pay, aside from being used to pay for in-game purchases, is also accepted in online platforms like Grab, Lazada, and Taobao. Razer Pay also made a big offline push when it made the service available to more than 6,000 major retail, food, and beverage outlets including 7-Eleven, Starbucks, Sephora, and Kenny Rogers. To date, Razer Pay boasts 60 million registered users and as of 2018 claim to have processed over $1.4 billion USD in payments value.
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Razer is more than just a hardware company but also a FinTech company. With its users accustomed to buying in-game credits at convenience stores, creating a payment solution for Razer is inevitable. According to Li Meng Lee, Razer’s Chief Strategy Officer, “for many years, the people who have been making digital payments before it became a sexy word in the last couple of years… [many of them] are the gamers who go to a 7-Eleven, pay in cash, and get a pin code to buy virtual skins for games. Because of that, we’ve been able to build up more than a million service points across Southeast Asia.”
Integrating Visa prepaid solutions into Razer Pay
For Razer Pay registered users, the Visa-Razer partnership means that they can pay with their digital wallet to the 54 million merchants around the globe where Visa is accepted. The two companies are also developing a solution catering to the region’s unbanked population by introducing Visa prepaid solution. This collaboration is set not only to boost Razer’s touch points but also Visa’s reach in the region and tap into the millennial and youth market too. It is predicted that the integration will cement Razer’s position as one of the leading digital/e-wallet platforms in the region.
The service will allow users to top up and take cash out easily through a mini-app embedded in Razer Pay. This prepaid solution will also compliment Razer Pay’s existing offering, which includes mobile top-ups, virtual credits, and entertainment purchases. Users are set to enjoy benefits for using their prepaid cards for e-commerce transactions overseas.
According to Lee, the key differentiator of this e-wallet service is that, unlike most of the e-wallet solutions, customers paying at Visa merchants don’t require them to own a bank account. Visa stated that early adopters of this feature would be introduced to interactive and straightforward financial planning capabilities with a Razer-gamified twist with the goal to enhance the financial literacy levels of the region’s population.
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While these efforts are virtual and keep up with the region’s fast-growing digital population, according to Lee, both companies aren’t ruling out the possibility of later introducing a physical prepaid card. Such consideration will all make sense when the majority of the countries in the region are still leaning towards cash-based transactions.
The feature is set to roll out in the coming months. The companies have plans to expand in selected Southeast Asian countries before expanding globally.
Razer’s ambition to become a leading FinTech company has grown more evident since April 2018. This occurred when they first acquired MOL, a company that offers online and offline payments in the region. According to Lee, aside from payments, other financial services such as lending and insurance are also part of future plans in an effort to ramp up recurring user rates. Acquiring a payment solutions company and partnering with a banking giant like Visa are both strategic power moves for Razer on its path towards regional leadership.