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SentBe offers U.S. remittance services

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SentBe CEO Alex Choi speaks during an interview with Korea JoongAng Daily in the company office in Gangnam, southern Seoul, on Nov. 22. [PARK SANG-MOON]
SentBe CEO Alex Choi speaks during an interview with Korea JoongAng Daily in the company office in Gangnam, southern Seoul, on Nov. 22. [PARK SANG-MOON]

SentBe, a remittance provider, started offering transfer services from the United States on Monday.

It also offers outward remittance services to Singapore and Indonesia.

“I’ve learned that different countries have different standards and market practices,” said Choi in an interview with Korea JoongAng Daily at the company office in Gangnam, southern Seoul, on Nov. 22.

Choi said different markets all have very different business environments for overseas foreign exchange remittance.

In the United States, SentBe had to be “particularly cautious about information security.” Choi added, “there are so many unicorn startups competing, but a lot of their primary markets are South America or Europe. They don’t seem to consider Southeast Asia as a primary market.”

He named Vietnam, the Philippines, Indonesia and Thailand as some of the company’s primary markets.

Choi wouldn’t disclose who SentBe is working with in the United States to handle the transactions.

Founded in 2015, the SentBe service is popular with foreign workers and students. But its clients have recently expanded to corporations, including Kakao Style.

SentBe is a private company. It has received investment from a number of investors, including Stonebridge Ventures, Coinone, the crypto exchange, and SparkLabs Accelerator, according to Crunchbase.

Below are the edited excerpts from the interview.

Q. Why did SentBe pick the United States as its next target market?

A. We had always thought about entering the U.S. market since the early stage of the business, but it was mid last year that we actually started preparing to jump in. The United States is one of the biggest countries in terms of the total volume of outward remittance. That also means that there are a lot of service providers in the market, but we thought there is an opportunity for us considering our positioning of focusing on offering outward remittances to Korea and Southeast Asian countries.

After reviewing the market for more than a year, we decided it would be best for us to team up with a local partner. To provide a money remittance service in the United States, a license is required. We did not acquire the license because it takes a massive amount of time and money to receive it. We instead partnered with a local company that has the license.

Did SentBe face any difficulties or troubles entering the U.S. market?

After seven years in the fintech business, I’ve come to realize that Korea offers a high level of quality financial service. The services people take for granted in Korea are oftentimes not available abroad, so it was difficult to level out the service in and outside Korea.

For instance, if I send money to a friend from a bank account, the transferred amount is displayed almost immediately on one’s online bank account in Korea. But that isn’t the case in the United States. It just shows ‘holding’ while being transferred. Also there are so many forms of bank accounts that some account holders are not aware of, like whether the account has a line of credit, when they open it.

In Indonesia, customers have trouble receiving confirmation text messages from SentBe due to the slow telecommunications infrastructure in the country. It could take as long as eight hours for a text message to be sent.

What technologies does SentBe use to make services more affordable?

SentBe developed the automated foreign exchange hedge system, a hedging algorithm that helps minimize foreign exchange risks caused by exchange rate fluctuations during cross-border transactions. The reduced risks enable SentBe to offer a remittance service with a low commission rate. Pooling method is another scheme we use to lower remittance costs. Pooling method is sending money in a pool instead of making transactions separately.

SentBe’s outward remittance from the United States to overseas ranges between $0.99 to $1.99, depending on the speed of the transfer that could take as short as five minutes or as long as two working days.

SentBe said its goal is to build borderless finance. What do you mean by that?

Apart from foreign exchange remittance, SentBe also plans to launch payment-as-a-service, which is a business model that offers customers all features that are needed for overseas remittance or payment services. This is a business-to-business solution that could be used by companies that want to expand their business overseas. E-commerce operators or game companies, for instance, will be able to adopt the solution onto their existing system when branching out overseas. The solution will help them on many levels, from exchanging currencies to settling payments. Money remittance will be a cash cow service for us, while payment-as-a-service will become the star service with a lot of potential in the future.

BY JIN MIN-JI [jin.minji@joongang.co.kr]