He who doesn't take risks, never drinks champagne
An old Russian saying, quoted by Vladimir Putin in his Financial Time's interview on Russian intervention in Syria. And the risks I did take with NuMoney. Two years later today, I no longer have bank accounts with DBS, OCBC, and Maybank, possibly for the rest of my life. I also learned that I am not cut out for Fintech.
The bank called us because were receiving too much money from too many customers.
Our bank accounts were closed because we tripped some compliance framework. That effectively had our bank accounts in OCBC, Maybank and DBS (including my own personal POSB account) shut down. Who knew receiving large sums of money (an average of four digit sums) from customers was anomalous.
Now even though I had proper documents and invoices to back up my transactions , it did not matter because cryptocurrencies and banks are like oil and water. Don't believe me? Try getting a bank account with a company name with Coin or Crypto in it.
This taught me four lessons.
As someone that thrives in the grey area, am not cut out for the fintech space because this space has no breathing room for disruption anywhere near the border of legality (Like Uber/Airbnb).
You had better be "connected".
- For example Socash, a startup built to augment ATM networks were able to get bank accounts because the CEO was the Executive at DBS before he left and built Socash.
- (A rumor from a DBS insider) Thinmargin had all their bank accounts shut down, until they managed to get an executive inside DBS on their board.
Or, be so big that they cannot ignore you.
- Notice how Grab has the dollar-to-dollar equivalent of their GrabPay credits but is not part of an approved Stored Value Facility?
- Or how our state investment fund (Vertex) invested funds in Binance. Our meetings with the Binance team had them telling us our government officials were approaching Binance and offering help in getting bank accounts. Meanwhile, MAS was hanging up on NuMoney and told not to call and wait for their emails.
Banks are a monopoly. If they do not like your business, you have no place in this society controlled by them. (Car loans, HDB loans, cashless payments)
- Also, you cannot start a bank to compete. I tried.
In other words, the game is rigged. If you are not somebody (cough), it is near impossible to make it big head-on in the Fintech space.
With that said, I have to give props to Xfers as they are the only local startup that I think succeeded in this space. They gave no reason for MAS to shut them down. They did everything by the books. But even then, I do not believe they care about the Singapore market.
But really, the biggest lesson is that..
Singapore is not a market worth playing in. Just focus on building a global company from day one.