KUALA LUMPUR (Nov 21): Despite government efforts to drive financial inclusion, nearly 12.5 million Malaysian adults remain unbanked or underbanked, particularly among rural populations, the elderly and small businesses.

While the New Industrial Master Plan 2030 (NIMP 2030) and Madani Economy framework emphasise digitalisation and adoption of artificial intelligence (AI) to spur economic growth, access to financial services remains a challenge for micro, small and medium enterprises (MSMEs).

This is where fintech companies, such as payment gateway firm Curlec by Razorpay, are stepping in to fill the gap by providing tailored solutions to serve the unbanked and underserved, according to co-founder and CEO Zac Liew.

“In the case of SMEs, dealing with banks can be cumbersome and time-consuming. For example, if I want to make a slight change in a document, I would have to sign at least 10 different forms. [An SME owner] would not have the time to do all this because the business is small,” said Liew.

“And the banks certainly do not provide products that make it easy for them to do this and the reason why they do not do this sort of service is because it's too expensive to serve [SMEs].”

Big banks often perceive SMEs as riskier investments due to factors such as limited equity, informal business structures and less transparent financial records. Smaller businesses are also typically more vulnerable to market fluctuations, further increasing their perceived risk.

Fintechs like Curlec by Razorpay help to fill this gap by providing SMEs without access to debit or credit cards with tailored financial solutions, fostering financial inclusion and empowering small businesses.

“We now onboard businesses entirely online, unlike banks. We have this thing called the ‘pizza’ test where merchants who visit our website sign up and undergo the Know Your Customer (KYC) process and onboard themselves quicker than it takes for a pizza to arrive. We can onboard people within minutes, completely digitally,” Liew added.

Founded in 2018, Curlec was acquired by India’s largest fintech firm, Razorpay, in 2022, marking Razorpay’s first venture into Southeast Asia and expanding Curlec’s scope from enabling recurring payments to a full-service payment gateway for businesses of all sizes. Curlec now supports over 3,000 clients, including Tune Protect, CTOS, Mary Kay and the National Kidney Foundation.

“In the beginning, when we came to the business, we were initially very focused on direct debit payments, which in fact are recurring online banking payments, but we noticed one of the big issues that merchants [especially SMEs] faced here was around collections, which is the ability to collect payments. I think Malaysian businesses are typically bad paymasters,” said Liew.

“It was an opportunity [for us] to come in and provide a very simple and easy-to-use, affordable solution that meant, ultimately, businesses could be in control of when they get paid.”

This collaboration enables recurring payments via TNG e-wallet, supporting over two million merchants and over 21 million verified users across the country, especially in underserved areas.

Through Curlec subscriptions, it provides features like recurring payment schedules, control over billing cycles and instant alerts for subscriptions.

“Generally, we have the cards, we can process online banking, [and] we can process TNG e-wallet. Customers want to pay our merchants with TNG. We did this partnership because it is by far one of the largest e-wallet players in the market on every single metric,” Liew added.

“It was important to work directly with TNG to offer this to our merchants. I would say many players in the market offer TNG, it's basic.”

Apart from providing a payment gateway, Curlec also provides a comprehensive payments toolkit including payment links, subscriptions, payouts and invoices.

Liew says these services — such as payouts — allow businesses to streamline the process of creating and sending out funds through Curlec’s dashboard and application programming interface (API) and optimise workflow which clears out the clutter by linking multiple bank accounts to a single payee.

“Again, if we talk about businesses being underbanked or underserved, just as a business owner asks a bank to give you sort of the ability to do any form of customisation to help you set up a website. A bank is not going to do that,” he says.

“And the reason why banks cannot do that is because of cost. [And] two, they have so much legacy infrastructure in the background that is, quite frankly, impossible for them to produce these services at scale.”

Liew said that technology-based companies like Curlec are able to deploy services at a rate that is exponentially quicker than what a bank can do.

“We are a technology-based company and not bogged down with legacy infrastructure, we are all built in the cloud.”