Deal focus: 2C2P plots regional expansion

For Aung Kyaw Moe, founder and group CEO of 2C2P, establishing the partnerships that underpin this expansion was eased by the fact that he is Burmese. But it was not the only factor.

"A lot of foreign players are excited about Myanmar but most of them want to implement a solution and get out," he says. "We have a long-term ambition so we want to make sure our local counterparts know what they are getting. Being one of their countrymen they listen to me a bit."

Cross-border expansion is the ultimate objective for most participants in Southeast Asia's nascent payments spac. It is one of the reasons why 2C2P received $7 million in Series C funding from investors such as Amun Capital and GMO Venture Partners. However, expansion is difficult to achieve. As Moe acknowledges, virtually every market in the region has a local incumbent with a dominant position.

Founded in 2003, 2C2P works with financial institutions and retailers to facilitate e-commerce transactions in markets that have limited financial infrastructure. In the 2014 financial year, the company processed transactions worth $2.2 billion, up 400% on the previous 12 months.

It has offices in eight offices across the region but can only claim to be the market leader in Thailand and perhaps Cambodia and Laos. Approximately two thirds of 2C2P's revenue comes from Thailand. This dominance is the product of Moe's past. He previously set up a business that provided authentication technology to most of Thailand's banks so knew who they were and what they wanted in terms of payment processing.

Expansion probably means finding partners in the likes of Indonesia, Malaysia and the Philippines with similarly strong networks. "We have to navigate through local payment players or work with them," Moe explains. "The payment business is unique in that sometimes collaboration delivers more results. Even Visa and MasterCard have to collaborate while competing with each other."

With this in mind, he doesn't feel threatened by e-commerce giants such as Alibaba Group and Rocket Internet establishing their own payment platforms within Southeast Asia. As a B2B service provider 2C2P wants to facilitate interaction between its existing clients and these new players.

Indeed, Moe hopes that Alibaba and Rocket can help break the Visa-MasterCard credit card duopoly by coming up with new financial instruments. "We have to work with Visa and MasterCard because they are payment instrument providers but the way they set prices is not favorable to Southeast Asian players," he says. "We need a solution for the Asian market."

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• Topics
• Venture
• Southeast Asia
• Financials
• Technology
• Financial Services
• Technology
• Southeast Asia
• Thailand
• GMO Ventures