See the original story in Japanese.

Bangkok-based Omise, providing online payment services for retailers in the Southeast Asian region, this week announced a successful fundraising effort. The secured amount is $17.5 million in its series B round led by SBI Investment and other companies whose details have not been disclosed.

Some of the existing investors for the earlier round – namely Sinar Mas Digital Ventures, Ascend Money and Golden Gate Ventures – participated in this round as well. Therefore, the total fundraised amount has exceeded $25 million, corresponding to the largest scale among fintech players in the Southeast Asian region.

Omise previously fundraised in its series A and an additional round in October of 2015. At that time, the company’s CEO and founder Jun Hasegawa had replied during The Bridge’s interview that his firm aimed to develop its services over 20 countries by the end of 2018 with the secured money.

Coinciding with this fundraising, the firm announced that June Seah and Michael Bradley (as Chief Commercial Officer) will join as members of its advisory board. Seah had worked at Visa for 20 years in charge of the Asia-Pacific region while Bradley had worked at CyberSource providing payment solutions, in charge of the same region.

So, now a challenge of this Japanese entrepreneur is about to take form.

You can check out the previous article as to details of Omise’s outline and its services. One of its strong points is the advantage in local regions, unlike other payment service players such as Stripe or Braintree.

Hasegawa explained thus:

The global players had expanded their services in one fell swoop in the European and US regions by focusing on credit cards. However, that approach was not available in the Southeast Asian region due to the rather lower ownership ratio of credit cards.

Currently, Omise is providing its services in four countries including Thailand where its base is located. The services adopted various payment methods that are popular in each country, for example in Thailand, local debit cards, net banking or bill payment (payment using bar codes) is available in addition to credit cards. That led to a differentiation from the global players.

On the other hand, the services had a problem in terms of profit ratio. As a lot of online payment services have been popping up both globally and locally, even though the commission charging model has low profitability as it could be further lowered due to excessive competition.

Hasegawa elaborates:

Profitability will be more important for the payment business in the future. There is a limit in the model based on the card brand of Visa / MasterCard as a common background. So, we have come to consider our own infrastructure. Like family credit cards in Japan, I think we could create a charging model eliminating commission fees for the card network through preparation of such proprietary infrastructure.

The reason behind engaging personnel who had been active in Visa is based on such a strategy. Through large-scale fundraising this time, the firm will work on development of deep learning in payment business, or fraud detector / recommendation utilizing machine learning.

Hasegawa concludes:

Although we had focused on payment business for small-sized business operators during 2015 and that resulted in obtaining thousands of accounts, currently we are shifting to a direction where we aim to acquire larger clients. For example, the largest telecom carrier in Thailand – True – or the airline company Nok Air have come to use Omise’s payment infrastructure.

In the Southeast Asian region, services which guarantee 99.999% safety for stable operation of infrastructure are rarely seen. Omise realized services like ‘even if banks fail, our system won’t’ by offering a cloud-based environment and card network connections, and that led to acquisition of large clients.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy