Interview with Per Lind on payments challenges in ASEAN region
ARYZE Advisor, Per Lind, calls for educating Southeast Asians on affordable remittance alternatives
ARYZE sat down with Per Lind, advisor and prolific business development expert with an extensive knowledge of the crypto space, for an update on the existing potential of digital advancement in Southeast Asia that will revolutionize the current payment landscape and create a sustainable safe space for the remittance economy.
ARYZE: Based on your decades of experience working with the Asian market in the software and telecommunication industries, tell me about the remittance landscape in Southeast Asia?
Per Lind: I’ve been in Thailand for 17 years, so let’s start with that. Thailand is the tourism hub of Asia, with millions of visitors, but they don’t have enough people to be able to service those industries so workers from outside are imported. A lot of these “guest workers” come from Cambodia, Laos, Vietnam, Myanmar and Malaysia because these economies are not as strong. And they are sending remittances back to their families at rates ranging from 8–12%. This has been the reality for the last 50 years.
The whole remittance economy in Asia right now is probably 90% cash and the Thai government, along with the UN Development Programme, are saying that 17 billion USD a year in cash is transferred out of Thailand without being accounted for. So the big thing is that it’s non taxable because you’re dealing with the underground.
The money movers (the men in dark suits with suitcases going across the borders undetected) are charging 30% fees. So obviously the government wants to know about it and the UN wants to limit the corridors for whitewashing money by reducing the fee to half a percent.
A: How can a digital payment solution create better opportunities for migrant workers in Southeast Asia?
PL: ARYZE wants to tackle the current handling of remittances by making the transfers more effective and less costly. And there are major players currently involved in making this a possibility. The World Bank and the UNDP want to help solve this problem, so we would like to position ARYZE in a sweet spot. There are a lot of players out there that could be doing a lot but there’s no competition right now as I see it.
Some companies are trying to reduce these remittance fees by about 10% and, if we do this digitally, that is still too much to pay. The cost of moving money will be nothing if we digitize it. There is a lack of education that it could actually cost a fraction of a percent to move this money so we need to help people make the best choices. But we have to act quickly.
A: What challenges do you foresee in terms of implementation and adoption?
PL: There are a lot of political agendas when you get into these different countries and cash is king. Like in Thailand, but that’s also because the Bank of Thailand banned cryptocurrency until a few months ago when they admitted that they didn’t actually understand what was going on. The Thai government believes they cannot control digital currencies but in my view you have more control.
The remittance industry, if you can call it that, is a dark and dangerous industry. There’s a sub economy that we don’t know about and that’s why the UN has come in, together with the World Bank and European Development Bank and the Asian Development bank, to get them out of the dark ages and away from only using cash. And that’s where blockchain and distributed ledgers come in.
A: As an ARYZE advisor, how are you affecting change?
PL: Each of the national banks/regimes are going to have different views and all of that comes out in the wash with education about what digital currencies or digital value exchange will be in the future.
What I’m recommending as ARYZE’s advisor in Asia, is that we need to look very closely at the politicization of value transfer and how that reacts within the local economy. In Thailand, moving and printing cash is a huge expense for the National Bank, because 90% of the economy is handled in cash, so they’re starting to think digitization.
Ideally, the Thai government will join forces with the UNDP and World Bank to then educate the people on being more literate on the financial systems that they have chosen and on best practices that can be adopted.