10 startups that can beat PayPal in Southeast Asia

While money is flowing into e-commerce in Southeast Asia, the gap between the physical and online retail markets is still staggering.

Indonesia’s retail industry is valued at $134 billion, yet e-commerce is estimated to be worth only 0.7 percent of that figure. In the Philippines, the retail sector is pegged at $32.8 billion, but a Nielsen survey discovered that only one percent of consumers in 2011 have tried e-commerce in the past month.

One reason for the gap is the lack of an ubiquitous payment gateway that, unlike PayPal, can thrive in places with low credit card adoption.

More than cash shifters, payment gateways reduce the friction of processing payments while providing security for sensitive data.

In Southeast Asia, no platform with cross-border mass market appeal exists to service the unbanked and under-banked, who still form the majority of populations in Indonesia, the Philippines, and Vietnam (PDF link).

But a few companies are trying. Here’s a roundup of 10 payment-related startups in the region that show promise:

Qwikwire

Qwikwire wants to facilitate payments between sellers in the Philippines and buyers in the United States by acting as an intermediary between banks. Filipinos without a bank account will be issued a cash card which can be used to withdraw payments. Read our article on Qwikwire.

Market presence: Philippines, United States
Traction: Still in beta
Investments: $11,700 from Singapore accelerator JFDI

Ayannah

Founded in 2008, Ayannah operates a number of payment services for the unbanked: Sendah Direct is a web and mobile platform that lets users resell digital and physical goods, including mobile airtime credits, gift certificates, and micro-insurance products. Using Sendah, Filipinos can send physical and digital products to one another. And with Gamenah, gamers can buy game credits and virtual goods in three ways: over the phone, over the web, and over the counter. Startupbeat and e27 explain more.

Market presence: Philippines
Traction: Sendah Direct has 6,000 retail points.
Investments: Two rounds of seed funding: $2 million followed by another $1 million round led by Siemer Ventures and Golden Gate Ventures.

Dragonpay

Dragonpay lets customers buy online from merchants and pay via non-credit card channels like online banking services, ATMs, and over-the-counter at banks and retailers. Merchants are given an API to accept payments from supported sources. The platform supports recurring payments over debit and mass payments too.

Market presence: Philippines
Traction: Undisclosed
Investments: Undisclosed

Apptivate

Apptivate is a web app for using virtual currency to buy apps and movies on iTunes. No credit cards needed. It plans to expand into books and other markets like Thailand and Indonesia.

1Pay

Mobivi

Payoo

2C2P

Coda Payments

Cherry Credits