By Poovenraj Kanagaraj
“Understanding our sort of payment product requires a lot of educating. In our scenario, it’s not just an online payment service, with direct debit, you give businesses such as gyms and insurance companies the one-time authorisation to collect payment on a regular basis,” says Zac Liew, co-founder and chief executive officer of Curlec.
The VC-backed Fintech company has been striving to make it easier for businesses to collect payments since it was founded in early 2018. “A lot of the things we have been doing is to educate businesses on the safe, mature and much more convenient option of opting for a direct debit service,” Liew tells Business Today.
However, with an eventful 2020, Liew says this year appears to be the tipping point, not just for Curlec itself but also for businesses across the nation.
“The company was growing well prior to all this, but after the MCO, things were starting to look even better for us,” he says. Liew refers to the growing sentiment among businesses in the country as more and more start to look towards going online.
B2B transactions as Liew points out were done via cheques and with invoices taking around 90 days to be paid, one question that arose during the Movement Restriction Order that was in place, as a result of the Covid-19 outbreak was, how do you get people to sign off on a cheque?
Adoption for more efficient methods, he says has been slow all this while, however, with the arrival of the Covid-19, mindsets are starting to change.
“I think in terms of looking at it in Malaysia, when you compare with other countries in SEA, we are relatively mature. However, from a financial services perspective, the ecosystem is dictated by banks and they are so protected that it has stifled innovation in the country,” Liew shares.
While fintech startups like Curlec are known to come in and push for change in the ecosystem, the arrival of the Covid-19, as Liew says, has been the perfect accelerator in this case.
“There has never really been the push to innovate, but the arrival of the outbreak has had a spillover effect.”
Very recently, the startup secured funding from 500 Startups, which it aims to use the funds to expand its operations in the country and hire more staff, and at the same time focus on establishing banking and software integration partnerships as part of its efforts to scale its business in the region.
“I think the future for us in the long-term looks bright, we are quite bullish with what we can achieve. What we are super focused on now is the recurring payment segment as more and more businesses are shifting towards the subscription model,” Liew tells Business Today.
Liew points out that the recurring income model will definitely be favored more in time to come especially after the current circumstances. “Majority of businesses saw their revenue dip to zero overnight when the MCO was in place. With a model that allows for regular income, you are more indefensible when another crisis hits,” he says.
It’s not just the businesses, Liew says, consumers as he points out want to pay in a similar fashion as well. “They don’t want to pay everything upfront,” Liew says. This, he attributes to the change in consumer behavior which in recent times has prioritised affordability over luxury spending.
“The subscription model offers a completely different value proposition. Consumers can cancel, downgrade and upgrade their packages anytime.”
The subscription model which grew increasingly popular in recent years saw a model of success by players such as Netflix and Spotify, who had also disrupted the industries they came into.
According to Businesswire, the subscription economy has grown more than 350 percent over the past seven years.
Liew says that the adoption of the model in Malaysia has been slightly behind the curve. But he is optimistic that, with more and more businesses popping up, slowly but surely, the model will be picked up by many.
“We are seeing the trend come organically. The Covid-19 is definitely going to accelerate that as well,” he says.
Moving forward, Liew says the future is looking bright for the startup. While the same cannot be said for the many in the ecosystem, the Curlec co-founder says the startup had always prioritised building a sustainable and profitable business.
Funding has always been the biggest problem with startups. Liew says.This coupled with business models of high growth or high cash-burn are just not sustainable, he highlights.
“There are exciting announcements to come in due time. We have been focused on payment services for subscription based businesses. We know it’s not easy for small startups for instance to manage billing, invoicing and the subscription process. It can be tedious and difficult,” he says.
“Our goal is to build a software that can automate the entire process. We would also like to expand outside Malaysia, And in the foreseeable future, we are considering the markets up north and down south.We want to conquer as much of Asia as possible,” Liew tells Business Today.