We’ve been able to document the journey of fintech ⁠Fazz⁠ all the way back since our podcast started in 2020 with the CEO and co-founder, Hendra Kwik’s origin story. We’ve followed their evolution into what is now a regional FinTech group through a merger with Xfers. 

We also got to talk to Tianwei Liu, co-founder of Xfers, who is now the group deputy CEO of Fazz, about different topics from his journey building Xfers and joining forces with Payfazz (2022) to the future of payments in the region with blockchain technology and compliant stablecoins (2024).

Today, we’re joined by another leader from Fazz, Mark Hew, the Business Unit head for Payments and Agent Network in Indonesia, as well as Chief of Staff of the company. 

In part one of our conversation with him, he talks about Fazz’s evolution into a payment infrastructure company, his evolving role in the company, and how the company has weathered the tech boom and bust in recent years. 

TLDR

What continues to be a fascinating aspect of Fazz as a company is how it has evolved a lot since it was founded as Payfazz in 2016, but the core of its mission has remained rooted in financial access for all.

(1) Evolution from professionalization to consolidation. Mark shares how his first few years in the company were spent transitioning “from a startup into a professional organization, focusing on systems, processes, and cadence.” 

Today, Fazz is well into what Mark calls the “consolidation phase.” Fazz has started to “consciously align different parts of the organization, identifying core strengths and creating a competitive advantage moving forward.” 

The competitive advantage moving forward has been increasingly defined around payment infrastructure. “Our infrastructure actually serves some of the big names in Indonesia, like Blibli, Brick, Bukalapak, and Flip.”

(2) Evolution into a payments infrastructure company. Fazz’s core has always been in payments. Looking ahead into what Mark calls the company’s “expansion phase”, Fazz is expanding their services into “as many customer segments as possible.”  

“For instance, a company from China or the U.S. wanting to enter Southeast Asia could partner with us, and we would provide them access to the entire region. This horizontal expansion also includes the Web3 world. You get access not only to fiat transactions but also to the Web3 world, which transcends national boundaries.” 

(3) Evolution at a “Fazz” pace. Staying focused on their own growth came in different forms.

Amidst the tech fundraising market boom in 2020/2021 and bust through to today, Fazz remains focused on maturing its business. 

“Looking back, we definitely think we made the right call to stay on course and exercise financial prudence while growing at a more moderate pace.”

Amidst fintech expanding around rebundling financial services, Fazz remains focused on “horizontal growth by leveraging their core strength in payment infrastructure.”

And this company’s unique position in the market is what has kept Mark going throughout his growth in the company. 

“It’s not very often that you get to do something that is more socially impact-driven, focusing on Asian business in Indonesia, while also pushing the forefront of technology in Singapore.”

Timestamps

(00:49) Introducing Mark Hew;

(02:42) The Fast Track to Fazz;

(05:39) Leadership Evolving with Fazz;

(12:01) Building a Payment Infrastructure Leader, from Agent Networks for Rural Indonesia to Blockchain Technology for Web3;

(16:47) Make or Break Corner;

(19:13) Stay tuned for part 2 next week!

The content of this podcast is for informational purposes only, should not be taken as legal, tax, or business advice or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any ⁠⁠⁠⁠⁠⁠Insignia Ventures⁠⁠⁠⁠⁠⁠ fund. Any and all opinions shared in this episode are solely personal thoughts and reflections of the guest and the host.

Transcript

Paulo J: So, I wanted to kick things off for our audience who are hearing about Fazz for the first time. Maybe you can just give a brief introduction to our audience about Fazz, and then we’ll move along.

Mark: Fazz, or as some of you might know it, Fazz or Xfers, actually started off as an agent network company in Indonesia. However, along the way, we have evolved and diversified ourselves beyond just doing agent business. 

We also have a sizable payment infrastructure business, including a subsidiary, StraitsX, that focuses on digital payment cryptocurrencies on-ramp in Singapore. Happy to be here and chat with Paulo.

The Fast Track to Fazz

Paulo J: We’re definitely going to talk about the agent network that Fazz started out with, as well as the payment infrastructure, especially as it relates to the Indonesian market. 

But first things first, I wanted to know how you, Mark, got into this organization, and why you decided to join this company at that point in your career. I think this was already a few years ago, right? And you’ve gone through several roles within the organization.

Mark: Yeah, about three years ago. It was actually quite an interesting journey. 

Before I joined Fazz, I was a management consultant for almost 10 years, having done all sorts of projects and worked in almost every country in Southeast Asia. Being a consultant, it almost felt like something was missing. 

We’re always seen as outsiders, no matter how hard we try to integrate. We provide recommendations, but we don’t always get to see the implementation through. It’s like what people say: always the coach and never the player. For someone like me, who is very achievement-driven, wanting to see the impact and legacy of your work can be tough.

So, at that point in time, I thought to myself, enough of writing the plan, let’s try to actually execute the plan. That’s when I decided to take the plunge and join the dark side, so to speak. As for how I ended up in Fazz, it’s an interesting story. It all started with an interview about three years ago, and not just with anyone, but with the boss himself. I was interviewing for a portfolio operation role.

As part of the interview process, he gave me an assignment to create an in-depth analysis for one of his portfolio companies. So, I went on Crunchbase, looked up Insignia’s biggest investment, and three years ago, it was PayFazz. At that point in time, I knew nothing about PayFazz. I did my thing, did a few days of desktop research, coined some numbers, made a comprehensive three-page strategy plan, and presented it to Yinglan. I still remember that interview; he introduced me to the then PayFazz chief of staff, Archie, and I was hired as the head of strategy for PayFazz. The rest, as people say, is history.

Paulo J: So, I’m curious to know, given how you joined, what were the first few months like within the company? And what do you think has really kept you this long within the organization—three years now and doing all these different things for Fazz?

Mark: When I first started doing research on PayFazz and then joined, my experience was predominantly on the agent network in Indonesia. 

But because I was physically based in Singapore, I actually got the opportunity to interact with the Xfers folks—Tianwei, Victor, Samson—and this is when I started to realize that as a group, we don’t only have the agent network business. We also have a Web3 blockchain on-ramp, off-ramp business going on in Singapore. This is where I started getting more involved in the Singapore side of the business as well. 

That got me really interested in this company and made me think about the long-term prospects here. It’s not very often that you get to do something that is more socially impact-driven, like the agent business in Indonesia, while also pushing the forefront of technology in Singapore.

Leadership Evolving with Fazz

Paulo J: I think you were placed in that unique position of seeing the best of both worlds within a single company. You spoke about encountering PayFazz and learning about this company through the agent network, and now you’re the head of that sort of business within Fazz, the head of payments and the agent network in Indonesia. 

How would you compare that journey, going from joining as head of strategy, then to head of people, then chief of staff, to your current role? How do you compare your own professional evolution within Fazz to Fazz’s own evolution as a company in the last few years?

Mark: To describe my personality, I always call myself a fixer. I just can’t sit still, or as some people might say, I’m a busybody. I naturally gravitate towards the biggest problem in the organization. 

When I first started in Fazz as head of strategy, my focus was mainly on handling commercial diligence on some of the digital banks that we either wanted to acquire, partner with, or invest in.

But I soon realized that as a company, we didn’t have a consistent cadence or mechanism for monitoring and reporting our portfolio’s performance. So one of the first things I did was to create this kind of cadence. Coming from an execution background, I believe execution equals discipline, and discipline equals cadence. If you can’t run a good cadence, you can’t run good execution. That’s why I was very particular about setting the weekly, monthly, or even daily cadence for my team.

I started creating all these regular cadences for the team, aligning them towards a set of goals and a success matrix. I also began pulling together different strategy personnel across the organization. Then, after about a year, I found a successor for the strategy portfolio and handed it over to him. After that, I realized we were facing issues with talent. We weren’t hiring or developing people fast enough, so I decided to jump into the people portfolio as well.

During that transformation, I almost uprooted the entire team and rehired 90 percent of them. After about a year and a half, I found a successor within the people organization and moved on to something else. 

The next thing that caught my interest was the Indonesian portfolio. I wouldn’t say it was struggling at that time, but the market dynamic was just so different, changing in terms of the digitalization of the Indonesian population, as well as the competitive landscape.

When PayFazz first started, we were dominating the warung segment, but over the years, we became just another player. I saw a lot of potential in that part of the business, so I decided to deep dive into it. That’s how I ended up being the business unit head for the payments and the agent network in Indonesia. Reflecting on Fazz’s evolution over the past three years, I would probably divide it into three phases.

Phase one, when I was setting up the strategy and the people team, is what I call the professionalizing phase. It’s a phase of transition from a bootstrap startup into a professional organization, focusing on systems, processes, and cadence. 

Phase two is where we are now, which I call the consolidation phase. It’s the part where we started to consciously align different parts of our organization, identifying our core strengths and creating a competitive advantage moving forward. 

Looking ahead, the third phase will be what we call the expansion phase. Now that we have the license in place, we want to venture into more of a regional payment business. So, who knows, maybe next year you’ll see me focusing more on that part of the area with a new role and all of that.

Paulo J: Quite interesting how you found different opportunities and paths to mature even more as an organization. Some of the challenges Fazz has faced over the past three years are not uncommon to many companies and are definitely part of the so-called growing pains of a startup. 

You mentioned the changing market dynamics that have impacted the agent network business. Maybe you can speak about those dynamics a little more and how the Indonesian fintech industry is shaping the way you’re approaching this side of the business.

Mark: Before we talk about evolution, it’s important to understand the origin of the agent network. 

Historically, a vast majority of the unbanked and underbanked in rural Indonesia did not have access to any form of digital financial services. However, in the past few years, with the emergence of digital banking and all the e-wallets, the hurdle of adoption for digital financial services has decreased significantly.

As a company, we actually got our first bucket of gold from the agent network, particularly the PPOB business, where the end user would hand over cash, Indonesian rupiah, to our agent, and our agent would make payments on their behalf. 

This business model exists because the end users, our unbanked and underbanked population in Tier 2 and Tier 3 regions of Indonesia, don’t have any kind of bank account or e-wallet. But this has changed significantly over the past few years with the adoption of wallets like OVO, GoPay, and DANA.

We still see strong demand, and the demand for PPOB is holding steady, but the growth from e-wallet top-ups has been exponential. When the end users hand over cash to the agents, they no longer want the agents to make purchases on their behalf; they want the agents to help them top up their e-wallets. The end users themselves can use the e-wallets for online payments, whether it’s e-commerce or online shopping.

The trend of converting cash to e-money has shifted to where they just want to top up their e-wallets instead of making purchases directly. This trend still exists because a significant portion of workers, be it daily wages or part-time workers, still receive some or all of their pay in cash. However, this is going to change when payrolls are entirely in the form of either bank payments or e-wallet top-ups.

When that day comes, what will our role be in the financial ecosystem? Can we continue to survive and thrive solely as an agent network? That’s why when I talk to the team, I’m very adamant that we cannot rely solely on our agent network business. 

We need to evolve into a payment infrastructure business by continuously innovating. When the day comes that we no longer handle cash, we still want to play a significant role in the financial ecosystem and continue to create value for society.

Building a Payment Infrastructure Leader, from Agent Networks for Rural Indonesia to Blockchain Technology for Web3 

Paulo J: I think that goes back to what you mentioned in the previous question about Fazz being in its consolidation phase. To that point, I wanted you to share a little bit more about how the payment infrastructure side of the business can work together with the agent network, which is also a kind of infrastructure. 

How are these different types of infrastructures coming together to help Fazz really grow as a company?

Mark: I believe that you also spoke with Tianwei in an earlier segment about how Fazz has built infrastructure to power digital assets and actions, right? This is in parallel with what we are doing in Fazz Agent as well. 

The thing is, I feel that Fazz as a company is often misunderstood. Because of the legacy of PayFazz being a successful agent network, when people think about Fazz, they often think of it as only an agent network company.

But in reality, over the past three or four years, the company has evolved significantly. The business model has shifted to more of a payment infrastructure company. It might not be known to many, but our infrastructure actually serves some of the big names in Indonesia like Blibli, Brick, Bukalapak, and Flip. We derive much more revenue from our B2B business than our agent network business.

While people might think of the agent network as our core product, I see it as a testbed for us. If we can effectively serve our own agent network, which is one of the largest in Indonesia, then we can serve any other company, regardless of their business model. 

When we talk about payment infrastructure, it’s not just the fiat connection; it also includes digital assets, such as cryptocurrency on-ramps and off-ramps. This is the kind of company we want to build.

Our tagline is financial access for all. Access is not just about the unbanked and underbanked in rural Indonesia. It’s also about providing access to the Web3 world and offering payment options when you travel overseas. 

I always say that moving money shouldn’t be difficult. Whether facilitating transactions between rural and urban areas, from one country to another, or between fiat and Web3, we are here to help facilitate those transactions.

Paulo J: Yeah, I had a follow-up question about where you see payments moving, especially in this region with many payment services becoming more commoditized. Companies that previously focused on payments are now thinking about how to expand their financial service mix and open up more services. 

How do you see that kind of momentum, in terms of the verticalization or rebundling of fintech, impacting the kind of infrastructure Fazz is building?

Mark: The kind of expansion you can take varies. You can extend vertically or horizontally. What we’ve seen in the market is that many companies try to focus on the same segment of their customer base and provide more value-add services. 

For example, a company that used to handle payments for the unbanked and underbanked might want to expand into digital banking, savings, and investments. That’s a vertical expansion.

But the way we think about this is that our core has always been payments. We want to expand payments to as many customer segments as possible. That’s what you call a horizontal expansion. We believe in our ecosystem and in economies of scale. So, we aim to serve not just customers within Indonesia but also companies within Southeast Asia and beyond.

For instance, a company from China or the U.S. wanting to enter Southeast Asia could partner with us, and we would provide them access to the entire region. This horizontal expansion also includes the Web3 world. You get access not only to fiat transactions but also to the Web3 world, which transcends national boundaries. 

That’s how we think about expansion. While most people consider vertical growth, we focus on horizontal growth by leveraging our core strength in payment infrastructure.

Make or Break Corner

Paulo J: Yeah, I think I mentioned this to you off the record in a previous call, but it certainly reminds me of how some e-commerce companies entering the region need to find logistics partners, 3PL partners, or 4PL partners. And you guys are doing something similar in payments, covering all their payment functionalities for different segments and markets.

Before we wrap up part one of our conversation, I wanted to go into our make-or-break corner, which is becoming my favorite corner. You’ve had three years already at Fazz. What has been the biggest make-or-break moment of this journey so far that you can share with us?

Mark: Yeah, recounting my experience over the past three years, I think the tech boom back in 2021 and 2022 was definitely a very big moment for us. It might not be known to many people because it was more of an internal struggle. There was a time when you heard about so many startups receiving huge funding, going public, and making large acquisitions. But as a company, we did not catch on to the tech boom.

Our DNA is built a little differently compared to other VC-funded startups. We don’t fundamentally believe in a growth-at-all-costs model. We prioritize sustainable growth. When you talk about Hendra’s famous quote, he always tells us to treat investor money like your mother’s money. If you think about capital like this, you still spend it, but with care.

We don’t believe in vanity metrics or subsidizing transactions. We believe that every transaction needs to be unique and positive. We don’t burn money to acquire customers. Because of these beliefs, we are not growing as fast on the surface level compared to other startups practicing growth at all costs.

The make-or-break moment really came in 2022 and 2023. There was so much FOMO and sellout moments within our internal management team. You look around and see so many startups “made it.” I’ll be honest, at some points within our internal discussions, the temptation to go all out was quite high. Should we just do what they’re doing? Should we just burn money to acquire customers?

Now, looking back after 2022, especially the 2023 tech winter, some startups survived, some folded. But for us, not only did we weather through the entire 2023 unscathed, we came out much stronger fundamentally. 

Now, looking back, we definitely think we made the right call to stay on course and exercise financial prudence while growing at a more moderate pace. Had we chosen to go down the other path, who knows, we might not be here today. So that’s, I think, a very important make-or-break moment in Fazz’s history.

Paulo J: The FOMO is very real, even for startups. And I think it can be a really tough temptation to overcome and really just stick to your own pace of growth. So on that note, we’re going to wrap up part one. 

Hope to see you guys in part two of our conversation, where we’re going to get to know Mark a little bit more as a leader of Fazz. In the meantime, subscribe to get notifications on the next episode, and we’ll see you guys in the next one. Thanks for joining us.