[THE INVESTOR] In July 2017, a law allowing non-financial companies to offer global remittances went into effect in Korea, opening up opportunities for fintech startups to shake up the overseas money transfer industry that’s estimated to be worth 11 trillion won (US$10.30 billion) a year.
Since then, 18 fintech startups have registered with the authorities for global remittance services as of March, according to the Financial Supervisory Service.
While these firms are trying to take over the growing remittance market -- which is mainly occupied by traditional banks -- Sentbe has committed itself to serving more than 2 million migrant workers in Korea.
Sentbe Co-founder and CEO Choi Sung-wook
“We want to make money transfer easier for underprivileged people,” Choi Sung-wook, CEO and cofounder of the company, told The Investor in a recent interview. “We offer services like cash pickups and home delivery for people sending money to those without proper bank accounts.”
Currently, the startup is focusing on countries like the Philippines, Vietnam, Indonesia, China and Japan. It plans to expand to 19 other countries such as Cambodia, Uzbekistan and Nepal.
Founded in September 2015, Sentbe used to be dedicated to cryptocurrency-based money transactions up to late 2016 until it hit regulatory hurdles. Now, it utilizes pre-funding and pooling -- methods that are commonly used among small money transfer services -- for a fee one-fourth of what traditional banks charge.
The company still considers blockchain as a potential solution to slow, expensive cross-border transfers although currently different regulations around the world, volatile price of cryptocurrencies and speed are holding startups like Sentbe from utilizing the technology, Choi said.
The fintech firm is mulling to adopt xCurrent, the world’s third-largest cryptocurrency Ripple’s enterprise software for cross-border payments by financial institutions, to seek a faster and cheaper money transfer solution.
Sentbe has raised up to 4 billion won so far, including 2 billion won from Korea’s major cryptocurrency exchange Coinone which is a strategic investor. It aims to raise an additional 6 billion won in series B funding later this year.
By Park Ga-young (email@example.com)