When regulators disrupt...💣

Cross-border payment between India and Singapore is getting a facelift

This is edition 370 of Beyond The First Order, a premium daily newsletter that demystifies the hidden models, incentives and consequences of the most significant events across India and Southeast Asia

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Good morning,

Disruption is in the air. 

  1. Regulators in India and Singapore are teaming up to make remittances easier. And probably cheaper. What will fintechs do?
  2. The Chinese government is taking an axe to the concept of superapps. Because monopolies.
  3. Nutritional labels at the back of packaged foods are being replaced by front of package labels and warnings. Hopefully, soon.
  4. If you want to buy shares of private companies, but can’t, there soon could be a public company that’s a proxy for that.

Let’s dive in.

India’s UPI meets Singapore’s PayNow

India and Singapore have announced plans to link their respective real-time payments systems, the United Payments Interface and PayNow. 

Slated to go live by July 2022, the arrangement will allow people to transfer funds from India to Singapore using mobile phone numbers and from Singapore to India through UPI’s virtual payment addresses (VPA). VPA is a unique identifier that helps UPI track a person’s account, independent of their bank account details. 

The link up “will further anchor trade, travel, and remittance flows between the two countries,” the Reserve Bank of India, said in a statement. India is one of the world’s largest remittance receivers, with the country netting about US$900 million in inflows from Singapore in 2017, according to data from Statista. 

“The link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries,” Supendu Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore (MAS), the country’s central bank, said in a separate statement. 

Singapore had also established linkages with Thailand’s PromptPay system back in April, which allowed customers of participating banks to transfer funds of up to US$1,000, daily across the two countries. No such limit has been announced for the India-Singapore corridor and that might just be enough to give money transmitters like Western Union and Moneygram a slight headache. 

Statements released by the two central banks were scant on specific pricing except saying that the exchange would be “instant, low cost.” But it’s quite possible that the system will undercut the existing charges levied by banks and other providers. Sending and receiving money to G20 countries can cost upwards of 6% of the amount, according to a March 2021 report by the World Bank. 

The UPI-PayNow linkage also “closely aligns with the G20’s financial inclusion priorities” which include enabling quicker, cheaper, and more transparent cross-border payments, the Indian central bank noted in its statement. 

While many fintechs, including in the crypto-sphere, have made the pitch about disrupting international payments and making them cheaper, regulators in jurisdictions like India and Singapore might just be eyeing their lunch by expanding the scope of domestic payments rail beyond borders. 

The great super app unbundling

After intervening in Ant Group’s highly anticipated IPO, which was meant to take place at the end of 2020, it’s now becoming increasingly clear what the Chinese government wants the fintech giant to do.

Chinese regulators have already ordered Ant to separate from its main business the company’s two lending units — Huabei, which is similar to a traditional credit card, and Jiebei, which makes small unsecured loans — into a new entity and bring in outside shareholders.

Officials now want these lending businesses to have their own independent app as well. The plan would also require Ant to turn over the user data that underpins its lending decisions to a new and separate credit scoring joint-venture that would be partly state-owned, according to two people briefed on the process.

The order to spin out the credit card and loan businesses into separate business entities wouldn’t have had a visible effect on users. But the new one mandating independent apps will, because it completely alters the user experience. 

Previously, Ant’s app had allowed users to access all these services from within its core app through so-called mini-apps.

One reason why the super app genre evolved in Asia in the first place—more specifically, in China and parts of Southeast Asia—is because smartphone users in this part of the world preferred the multi-functionality.

By spinning out these services into separate apps, China is “essentially dismantling Ant Group’s super app,” writes KrASIA, the English language offshoot of Chinese tech news platform 36Kr. The publication also called it the first super app “unbundling”. It’s an interesting concept and perhaps one we’ll see play out elsewhere, when super apps become so powerful that regulators step in.

The biggest unbundling, though, has to be Beijing’s order to feed Ant’s user data into a partly government-owned credit scoring joint-venture. The government wrestled the data monopoly away from one private company and into its own hands.

Front-of-package health warnings help make better decisions. Ask Chile

Here’s something that the hospital chain Narayana Health wrote about obesity in India (in 2019):

Childhood obesity is now an epidemic in India. With 14.4 million obese children, India has the second-highest number of obese children in the world, next to China. The prevalence of overweight and obesity in children is 15%. In private schools catering to upper-income families, the incidence has shot up to 35-40%, indicating a worrying upward trend.

In the two years hence, it probably would’ve gotten worse. So, it was about time that something was done about it.

Enter the Food Safety and Standards Authority of India (FSSAI). which is trying to include food labels on the front of packaged foods. Because, who even flips over and reads anything at the back, right?

Companies aren’t really going to be high-fiving each other over this decision. So, there’s pushback. While they’re okay with the details being printed at the front, they’re against the idea of giving out health warnings. 

But there’s a difference between just a nutritional label—which lists out the sodium, fats, and sugars—and a warning label. Take Chile for example.

Chile’s warning label is a black and white octagonal sign to flag packaged foods with excess calories or nutrients. The label is easy to understand. It does not contain numbers and needs no calculations. All that it says is: “High in Sugar” or “High in Calories”. If a product is high in two ingredients, it will be highlighted through two octagons. At one glance, it warns the consumer how healthy or unhealthy a product is.


A year after its implementation in Chile, “the per capita consumption of carbonated beverages reduced by 24.9 per cent in the first evaluation.

The FSSAI is still on the fence. In fact, they’re conducting a ‘people perception study’ now on what label people prefer. Okay.

Meanwhile, Parle Products, the food products company and maker of the ubiquitous Parle G biscuits, is launching a breakfast cereal targeting kids called Hide and Seek Fills. And it’s not the healthy kind.

"The opportunity to tap the kids snacking market is huge, and so far only a few players have presence in the segment," said Buddha [Krishnarao Buddha, senior category head at Parle Products]. “For us, it's a natural extension of the brand Hide and Seek [the popular chocolate chip biscuits].”

Euromonitor estimates show that the sale of ultra-processed food in India went from 2kg per capita in 2005 to 6kg in 2019, and is expected to grow to 8kg by 2024. If India doesn’t want an obesity epidemic on its hands, FSSAI better get moving.

A company that helps you buy shares in private companies is going public

Sure, the most exciting part when a company goes public is the opportunity to finally buy shares in it. Easily, on the stock exchange, without running through hoops in the grey market for private shares. 

But there’s another exciting part too. When a company files its going-public documents (whether for an IPO or a SPAC), there’s a bunch of stuff it reveals about the company itself, but also about the larger industry that it operates in. Usually, it’s just the things it wants to reveal because it needs to get investors excited about it. But still.

So think of all the information you can get when a private company that enables trading in shares of other private companies plans to go public? Especially if it’s the first of its kind to do so.

Well, Forge Global, a US-based platform for trading in private shares, is going public via the SPAC route, in a deal that values the company at US$2 billion. In case you’re wondering if any companies that have knocked it out of the park were on the platform—the now-publicly listed exercise bike manufacturer Peleton and buy-now-pay-later company Affirm were on its platform; as is the still private alternative meat company Impossible Foods and the messaging platform Discord. 

According to the presentation filed by Forge with the US Securities and Exchange Commission, 142 out of 762 unicorn companies in the world (CB Insights puts the number at 810), have had shares traded on Forge.

With all the hype around such companies, you’d think that everyone would want a bite of the private markets. But look back at the second panel of the previous image again. The traded volume of shares compared to the public markets shows us how much catching up private markets still have to do.

As Matt Levine wrote in his newsletter:

The average private company still has less liquidity in a year than the average public company does in a day. Trading private-company stock remains a special occasion; you can sometimes line up a secondary trade with another venture fund or hedge fund, or buy stock from employees in a tender offer, but it’s not just a matter of putting in an order on the exchange.

But private markets and the ability to trade in it is still in its very nascent stages. So while the number is a tiny fraction of the public stock markets, it’s a market that’s heating up as money finds its way there

Hedge funds including D1, Coatue, Tiger Global, and Whale Rock pumped over $150 billion into private companies in the first half of 2021 — more than the total of 2020. More than a quarter of money invested in private companies this year has come from hedge funds, according to Goldman Sachs.

"We are observing a greater tendency among new launches to incorporate privates as part of their strategy from inception: more than 25% of the new equity long short launches we have worked with since the start of 2020 have a mandate to invest in privates in some form," Goldman's prime brokerage desk wrote in a report.

With startups doling out stock options to employees, and opting to stay private for longer, the secondary market for trading shares of private companies could grow and with it, the liquidity too. That’s what all the companies eying the secondary market space are after—including index provider Nasdaq’s Private Market venture.

For Forge, their sales pitch to potential customers is essentially this chart—returns from pre-IPO private financing. The private market over the public market. 

PS: Or, here’s the alternate sales pitch—a killer (or hilarious?) line from the presentation—“We help all who participate in the private market economy accelerate destiny”. Destiny

That’s it for today.

Don’t forget to write in with your thoughts and observations on the reshaping of businesses, societies, and economies. We will be back tomorrow.

Stay safe,

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