Razer Fintech, the fintech arm of gaming company Razer, has acquired PT E2Pay Global Utama, an Indonesian payments company.

The acquisition is expected to expand Razer Fintech’s Southeast Asian offline-to-online (O2O) digital payment network by adding E2Pay’s digital payment and e-money services, according to a press release Thursday.

The deal comes after Razer Fintech was passed over for digital banking licenses in both Singapore and Malaysia. In December 2020, after the company lost out on the Singapore license race, Razer Fintech said it would continue to pursue its digital banking aspirations in the Philippines, as well as other regions, such as Europe, the Middle East and Latin America.

Cross-Border Payments

Razer Fintech said E2Pay’s services will complement Razer Merchant Services, which is the fintech’s regional business-to-business arm, as it handles cross-border payments for around 60,000 merchants to Indonesia.

«E2Pay is one of Indonesia's very few digital payment players that has a comprehensive set of licenses across various payment gateway services, e-money, and remittance. The acquisition of E2Pay allows us to accelerate our entry into Indonesia, one of the fastest-growing digital economies in Southeast Asia, as well as be able to better serve the digital payment needs of our regional and global merchants as the single partner of choice,» Lee Li Meng, CEO of Razer Fintech, said in the statement.

E2Pay’s B2B2C – or business-to-business-to-consumer -- services support e-commerce, online marketplaces, travel and tourism and other industries in Indonesia, the release said, adding its clients include Indonesian internet-ecosystem giants Tokopedia, Bukalapak, Traveloka and Blibi, the release said. E2Pay supports major payment channels as well as mobile and internet banking, e-money and personal financing for more than 500 merchants, the release said. In addition, E2Pay’s e-money platform, MBayar, has more than a half-million registered users for its payment support for credit and data plans, bill payments, QR payments and fund transfers, the release said.

Financial Inclusion Still Low

Indonesia, as the world’s fourth-most populous nation after China, India and the U.S., offers huge potential growth for fintechs. Financial services inclusion in Indonesia remains relatively low, despite the Covid-19 pandemic boosting acceptance and use of digital financial services.  

According to data in the 2019 Google, Temasek and Bain e-Conomy report, published pre-Covid, Indonesia had 92 million unbanked adults and 47 million who were underbanked, or who had a bank account but no access to credit, investments or insurance. Indonesia’s total population was around 273.5 million in 2020. The 2020 e-Conomy report showed Indonesia posted a 44 percent on-year increase in the use of selected mobile banking apps for the January-to-September 2020 period.

But competition may be heating up in Indonesia, with superapps Grab, Sea and GoTo all offering financial services to both businesses and consumers.