Fintech service that expands monthly payments

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Recently, it was called a startup based in Singapore convertCASH he went to Malaysia, claiming that he would first pay the monthly dues.

Its service is aimed at users who do not have sufficient funds in their bank accounts to pay rent, home and car fees, among others, as long as it is a fixed monthly payment plan. At the same time, he states that no interest commissions would be charged.

Users who sign up for convertCASH are promised that their payments will be made within one business day of the transaction. You may be thinking it just sounds too good to be true, so we spoke with co-founder Jason Bak to learn more about how the business works.

You are still responding to your credit card

The gap that convertCASH is trying to fill in the market is the ability to extend monthly fees by 45 days by paying first for you. This would work for plans that require you to pay with bank funds and not with credit cards.

However, convertCASH requires users to have a credit card. “In the digital age, all Internet transactions require a credit card to secure your purchases or services. So the risk of converting CHASH is manageable, “Jason explained.

To use its service, users will need to install the app, register, and enter their credit card information. Users will need to fill out the bank account and bank name, car license plate number, etc. of the recipient, to make a transaction. All of these payments will receive instant approval, so users don’t need to go through an application process like they would with a loan, Jason told us.

Once payments have been made, users can share receipts for their transactions with convertCASH to their quota recipients.

Users are allowed to extend the installment payment of 2 or more different loans at the same time and use their service for consecutive months, Jason said, but there is also a daily limit of RM10k and everyone is limited to RM25k per month for payments .

First choose your payment type, enter the recipient’s details, and pay. You can also see an overview of your monthly payments. / Image Credit: convertCASH

Where does the money come from?

Even though you technically pay with your credit card, you still need capital somewhere that can pay you the installments in advance, which honestly is a lot of money considering your daily and monthly limit.

But Jason shared that they have enough capital to maintain 1,000 transactions a day, which he believes is good enough to cover first- and second-year forecasts. Its initial capital invested was about US $ 1.5 million, which equates to about US $ 6.1 million.

On average, it shared the transaction per user and month around RM1k to RM2k, but some are higher than that. Out of curiosity, we asked whether the framework of the convertCASH business model was regulated by relevant Malaysian bodies such as Bank Negara Malaysia and Securities Commission Malaysia, or whether it was applied at all.

Jason responded that because they are not in the industry of offering a service such as electronic wallets, remittances, payment gateways and P2P platforms, they do not require such regulation. Instead, he said, “convertCASH is connected to a locally licensed payment gateway so that our service is secure and verified.”

With the goal of a hit like Grab

Now, since convertCASH actually charges zero interest, it’s baffling how they would continue to generate enough revenue to continue to cover these installment payments in advance for their users.

Jason explained that they rely on the number of users to increase their asset value and that, in their case, revenue is their gross commodity value (GMV).

Dictionary time: The gross value of merchandise is the total amount of sales a company makes over a specified period of time, usually measured quarterly or annually.

Institute of Corporate Finance

“Any transaction that happens to us will be counted as GMV. Therefore, the more GMV we obtain, the higher our asset value will be. That’s how Internet-based businesses work, ”he added.

He compares his business model to something like Grab’s, so even though they did Losses of US $ 800 million last year, they were still able to go get one Stock market of 40 billion US dollars.

At present, convertCASH has more than 5,000 users, but only 20% are active so far. Its target user base for 2021 will be 100,000 active users and, should it gain strength as expected, the goal is to have 1 million by 2025.

Therefore, Jason’s way of measuring convertCASH’s success will be based on the value it creates with the company, measured through the number of users they have and the company’s potential rather than the profits they will make with that.

However, it has future monetization plans for the service that are transaction fees, product fees (such as car insurance), and third-party ads. By now, convertCASH is more focused on user acquisition and Jason told Vulcan Post that they want to be present in a total of eight countries by the end of 2021. They are already in Singapore, Malaysia and Australia.

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The convertCASH team seems ambitious when it comes to acquiring users, but based on its app scores in the Google Play Store, it looks like the app and service still need a lot of work done.

Users who tested the app said they couldn’t sign in (works for us) or verify their account due to errors, and 2 users also claimed that it actually took more than a day able to convert CASH by settling your fee even if your credit card was already direct debit.

If the goal of 100,000 active users is to be reached by 2021, Jason and his team should address these user experience issues quickly, as users are also sensitive when it comes to anything related with finances.

  • You can learn more about convertCASH here.
  • You can read more articles we have written here.

Featured Image Credit: Jason Bak, founder of convertCASH





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