Hello there

A gripe that I have with loyalty points, which are offered as a reward on so many different apps, is their lack of convenience in real-life situations. Often, they’re basically worthless outside the platform that issues them, and most expire before I can even get around to using them.

In a similar vein, what xSpend is doing for Axie Infinity token holders could be a game changer for the hundreds of thousands of Filipinos who play to earn on the blockchain-based game. The platform allows users to spend their smooth love potions (SLPs) - Axie’s in-game currency - on ordinary purchases such as mobile phone top-ups, electricity bills, or even flight tickets.

As it is, crypto users can swap their digital assets for fiat money by using centralized cryptocurrency exchanges. By using a service like xSpend, token holders can do transactions even without an exchanger wallet. And when it comes down to payments, a small convenience goes a long way. (You can read more of our coverage on Axie Infinity here.)

Staying along the lines of financial inclusion, AirAsia’s latest fintech initiative - AirAsia Money - launched in Indonesia last week. Beyond price comparison, the firm says it aims to push out products that are simple, affordable, and relatable to its users’ financial needs. We explore how this aggregation service ties in with the budget carrier’s super-app ambitions in this week’s Hot Take.

-- Melissa

THE BIG STORY

Axie Infinity players are using SLPs in real life

Image credit: Timmy Loen

The xSpend platform, run by XLD Finance, lets users pay bills and meet expenses with Axie Infinity tokens and other cryptocurrencies.

THE HOT TAKE

AirAsia’s latest take on financial services

Here’s what happened:

• The Malaysian carrier recently rolled out financial marketplace AirAsia Money in Indonesia
• This is its second market after Malaysia, where it launched last year
• AirAsia Money aggregates various financial products such as insurance, investments, and money transfers

For many, travel remains a relic of the pre-pandemic past. But assuming AirAsia used to be your airline of choice for budget flights, what are the chances that it could also be your destination for finding the best credit card, personal loan, or insurance plan in town, too?

AirAsia Money, the latest of a seemingly endless list of cards that AirAsia has up its sleeve, is a financial marketplace similar to comparison sites like MoneySmart, Seedly, SingSaver, and Finder (which acquired GoBear).

Financial comparison sites direct traffic to their partners - which can range from commercial banks to insurance companies - and generally earn fees from lead generation upon successful referrals. AirAsia Money says its revenue model will be a combination of commissions as well as revenue sharing.

In Indonesia, the platform offers general insurance through local startup PasarPolis, investments through wealth management app Bareksa, and remittances through money transfers service Wise.

Breaking the Indonesia market - where AirAsia Money will go up against players like Cermati and C88, which operates as CekAja - will likely be tough.

For one, it faces structural hurdles. “Many banks have operationally intensive processes, like filling physical application forms that require a wet signature from the customer and manual evaluation,” Vinod Nair, CEO of Singapore-headquartered MoneySmart tells Tech in Asia. This limits the extent to which referrals can be made and completed digitally. (We previously covered MoneySmart’s pandemic recovery.)

"While consumer demand for such products might be high, approval rates are poor because many Indonesians lack credit history. The referral fee or commission rates from the customers who do get approved are also relatively low compared to other markets,” Nair explains. The CEO would know: MoneySmart once operated in Indonesia but eventually sold its local business to LifePal, a Jakarta-based insurance marketplace.



AirAsia Money will get more partners on board as it expands. After all, AirAsia has described the business model as being “modular” and scalable through collaboration with other fintech players. That puts AirAsia Money in line with other financial comparison sites, where it’s common for a platform to forge multiple partnerships per product type.

The platform plans to introduce unsecured products such as loans, credit cards, and game top-ups in the future, Mohamad Hafidz, chief fintech officer of AirAsia’s super app, tells Tech in Asia.

While the firm teamed up with comparison site RinggitPlus in Malaysia at its launch, it has since added partners such as Policystreet, a Kuala Lumpur-based insurance marketplace, to offer motor insurance.

AirAsia is certainly betting that user traffic on its main app - amid and after the Covid-19 era - will funnel down into its many complementary services such as banking, grocery delivery, and food delivery, which is scheduled to launch in Indonesia this year.

As far as AirAsia Money goes, that traffic could go both ways.

Financial comparison sites are in the business of drawing in traffic, whether through facilitating community reviews or creating personal finance content. It’s why financial institutions rely on these platforms to distribute their products. Some have even gone as far as to acquire such a site.

Going forward, AirAsia Money could even distribute the products of the airlines’ other products, such asBigPay, a fintech firm run under the Capital A brand that offers money transfer and digital payments services. Last week, BigPay added personal loans to the mix and is being eyed as one of AirAsia Money’s unsecured product offerings, Hafidz says.

The company is also giving out flight vouchers for purchases of car insurance on AirAsia Money as well as loyalty points to users who pay their bills through the platform. “We plan to always offer discounts for any purchases on AirAsia Money,” Hafidz adds.

That said, with the financial comparison space already saturated with players, AirAsia Money will need to set itself apart in the consumers’ eyes to successfully draw traffic.

Launches in the Philippines and Thailand are in the works, though a firm date has not been fixed.

-- Melissa

NEWS YOU SHOULD KNOW

Also check out Tech in Asia’s coverage of the fintech scene here.
 

1️⃣ Binance rolls out payments tech platform for mass crypto adoption

Bifinity, a payments tech firm, will be Binance’s official fiat-to-crypto payments provider and empower more businesses to adopt crypto.
 

2️⃣ Sequoia-backed fintech firm turns unicorn with $137m round

India-based CredAvenue, which connects enterprises with lenders and investors, has facilitated US$11 billion in lending to date.
 

3️⃣ Robinhood plans spending account service alongside new cash card

The Robinhood’s cash card, which will be tied to a spending account, will let users spend with cashback and offer the option to invest their spare change automatically.
 

4️⃣ SG co-investing platform banks $50m

Zignaly, which lets investors share in the profits of trades in digital assets done by traders and fund managers, will use the new capital to expand into other parts of Asia, South America, and Europe.

That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter here.

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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!