With the worsening COVID situation around the region and lockdowns easing up and reappearing again, the SME market continues to take hit after hit. Besides the impact on travel, F&B and more, the surrounding ecosystem and retail industry as a whole has been affected.

To find out the full impact of the situation, especially around the flow of payments and funds, we speak to Sanjiv Razdan, who is the Global Head of SME Business at Instarem. He shares his thoughts on the need for SME support and the use of technology solutions where possible.



This interview delves into the current situation in the region and what are the solutions available, as well as what is needed to bring the SME industry back from the brink of disaster.

How is Instarem working with SMEs in both Singapore and Malaysia?

Instarem aims to enable consumers and small and medium-sized enterprises (SMEs) to send, spend and receive payments conveniently and securely. With our network in over 100 markets, 65 markets in real-time, Instarem offers quick, easy and cost-effective remittance solutions for SMEs around the world. 

Today, we are a trusted licensed service provider with licenses in Australia, Singapore, Japan, Indonesia Hong Kong, Malaysia, India, UK, US, EU and Canada, with a focus on Singapore and Malaysia as top markets due to increased demand.

Specifically in Singapore, we launched a new service, BizPay, that helps Singaporean SMEs maximise their cash flow. The service utilises credit limits in corporate cards and converts them into working capital to help businesses make payments, including commercial rent or utilities, or other supplier payments. Using BizPay, SMEs can also continue to enjoy benefits that may be available on their corporate credit cards, such as membership rewards or cash rebates. 

In short, BizPay was introduced to help small businesses during these challenging times. Securing loans or credit has never been easy for SMEs; the absence of a stable and profitable portfolio is seen as a drawback by banks and financial institutions. Even before the pandemic, 61% of Singaporean SMEs held low credit standings, and not more than 15% of SMEs in fast-growing economies had access to the credit they required. The additional delays in payments induced by the pandemic have only aggravated this lack of capital. In these challenging times, the opportunity to maximise cash flow, using resources and infrastructure that are already available, is invaluable.

Given that Malaysia’s ongoing Movement Control Order (MCO 3.0) is having a devastating impact on the SME industry in Malaysia, what are some of the ways that Instarem can help?

It is indeed true that many SMEs in Malaysia are seeing a devasting impact on their revenues in light of the ongoing Movement Control Order (MCO 3.0). Many businesses are having customers either postpone business decisions or face cancellations while suppliers face cashflow issues in managing supply chain deliveries on time. This is putting a much tighter squeeze on working capital liquidity and will make borrowing lines even more difficult to obtain as banks worry about the rising risk of credit default. More than ever, SMEs are urgently looking for ways to lower their costs and increase more value for each dollar that they must spend. 

A food stall in Kuala Lumpur, Malaysia

To support our SME clients, Instarem has introduced cross-border transfers with no fee charges and transparent exchange rates that are amongst the best the industry has to offer. This will help to drive enhanced savings. We are also helping our long-term SME clients with special discounts for a limited period to meet their immediate need for reducing costs, as well rolling out other initiatives that make SME transaction processes seamless. We are in the business of helping SMEs scale during this challenging time, removing payment frictions, and improving process efficiencies for indirect cost savings as well. 

Give us the impact of the linkage of real-time payment systems, and what this means for SMEs in Southeast Asia?

There have been recent developments that aim to enhance cross-border payments across Southeast Asia. In April, it was announced by the Monetary Authority of Singapore that Singapore’s PayNow system can now link to Thailand’s PromptPay version. The linkage between the two countries’ national fast payment systems is the first of its kind in the world.

This is a timely step, as there is a stronger focus to ensure that SMEs can access more business opportunities beyond their domestic markets. Allowing instantaneous transfer of funds across the two countries using just a mobile number could boost economic activity at a lower cost, encouraging future growth across the region. Moreover, modernising standards (such as ISO 20022) and technologies (such as QR codes) are enabling more streamlined communication between payment systems across Southeast Asia.

In addition, this will also help SMEs better facilitate their presence online and offline, as they can now offer their customers more payment options – especially with most people preferring contactless payments amid the pandemic. 

What will the cross-border payments landscape for SMEs in Southeast Asia look like in 5 years?

While there is interest to expand this bilateral linkage into a network of linked retail payment systems across the region in the next few years, certain challenges remain.

Firstly, while Internet penetration in Malaysia, Singapore and Thailand are the highest among other countries in the region, other countries such as the Philippines, Vietnam and Indonesia are still catching up. In turn, this number affects the overall accessibility of mobile payments and e-payments – especially for markets that are geographically extensive such as Indonesia, with different penetration rates across its individual regions.

In addition, while the global COVID-19 pandemic has increased demand for such services and linkages, governments and officials have different priorities depending on the state and progress of their country in relation to recovery. If such partnerships have been in progress before the pandemic hit, there is a higher chance of it becoming a priority today. 

Despite these challenges, there is much to look forward to in this space. With closer collaboration between industry players, we can expect a stronger regional financial infrastructure that will greatly benefit SMEs, businesses, and consumers alike. The next few years shall see a strengthening of cross border interoperable payments infrastructure which shall rely on domestic real time payments and based on global standards for easier integration across players.

What’s next for Instarem?

We have exciting things in store for Instarem across the Singapore and Malaysia markets. In March 2021, Instarem rebranded to align with our company’s mission to move beyond digital remittances. In line with this, we have key consumer and SME initiatives slated to be launched in the Asia Pacific region in the coming months, including an upcoming launch of a first-of-its-kind consumer debit card in Singapore. 

In Malaysia, our current priority is to grow the local retail and corporate business by 20% by the end of 2021.  To do this, we will be progressively enhancing our consumer and SME product offerings over the next 1 to 3 years. This will seek to make it even easier for Malaysian SMEs and consumers to send and receive funds, and to ensure we provide even better services across the country. 

Overall, we believe that Malaysia’s ongoing shift to digital and online channels will help reduce operational cost and improve the responsiveness of local businesses to new market opportunities post-pandemic. Thus, supporting SMEs in their digital transformation will be a key area of focus for us as the Malaysian economy gradually moves into a post-pandemic recovery phase.