Decentralised and centralised fintech is coming together to shake up the payments landscape.

Zilliqa is a high-throughput blockchain that aims to use sharding to preserve decentralisation while reaching higher speeds than other public blockchains and allowing for safe, fully-fledged smart contracts. To date, it's achieved speeds of 2,828 transactions per second, it says.

And Xfers is a Singapore-based fintech startup with more than 500,000 users around South-East Asia. It aims to serve as a seamless middle layer between digital financial services and individual users in a region that's experiencing rapid growth in mobile financial services.

For a sense of how much highway there is in digital financial services across South-East Asia, consider this striking statistic:

South-East Asia as a whole has a mobile connectivity rate of 133% (due to people owning multiple SIM cards or phones), but only 27% of the population has a bank account. Cambodia is on one extreme, with a mobile connectivity rate of 173%, but only 13% of the population having a bank account.

What Xfers does

Xfers gives digital businesses an easy plug-in-and-go solution for collecting payments, for storing user funds and for disbursing funds to user bank accounts, CEO and co-founder Tianwei Lu explains.

"With Xfers' easy platform integration, payments, disbursements and wallet kits are offered to these businesses, making it easy for them to accept payments, store users' funds and disburse funds to users' bank account, dispensing with the need to build and maintain their own systems," he said.

This helps users around the region more easily access the full gamut of digital financial services and helps businesses easily get a compliant end-to-end payment solution.

Xfers also offers valuable regulatory chops.

MAS WA SVF

MAS WA SVF, or Monetary Authority of Singapore Widely Accepted Stored Value Facility, is a regulatory designation. It basically means Singapore's Monetary Authority recognises Xfers as a product that a lot of people hold monetary value in and is widely accepted by merchants and other services in Singapore.

It also means all the value that's stored in Xfers is backed up by bank holdings and that it does its AML/KYC due diligence on its users. Currently, Xfers is one of only five MAS WA SVFs, and the other four are all physical coupon and debit card type products.

So, as a digital MAS WA SVF, Xfers presents a unique value proposition in South-East Asia.

Unsurprisingly, it's also been a consistent fixture of Singapore's booming crypto scene, and almost all consumer fiat-to-crypto bridges in Singapore use Xfers. It's the preferred payment method on Singapore's Coinhako exchange, and an Xfers account is the only payment method on Binance Singapore. It also used to be Coinbase's go-to payment method in Singapore until the volume became untenable.

That last one might be part of the reason why Xfers is so interested in exploring blockchain further.

Enter the blockchain

"We intend to work with the Zilliqa team to implement distributed ledger technology in our payments engine to increase transparency and to cost-efficiently scale up our transactions," Lu says.

First, it brings transparency and auditability.

"Our enterprise clients and even end-users can examine the smart contracts powering their payment transactions on Xfers," he says. "Our banking partners and larger counterparties can audit the client funds in the Xfers Wallet stored value facility on a more frequent basis. Even regulators can now have greater supervisory oversight by viewing the transaction statistics from the distributed ledger."

Xfers also hopes to find a better way of handling more sheer volume for its next growth phase using Zilliqa's network as a decentralised counterpart that runs parallel to Xfers' own centralised infrastructure.

Down the line, this potentially means serving as a doorway to the Zilliqa network and having clients run payments directly peer to peer on the Zilliqa blockchain.

"Zilliqa’s distributed ledger technology is fundamentally different from Xfers' current 'centralised database' model, and allows us to scale further by processing transactions in parallel and on a distributed basis," Lu explains. "To further increase transaction volumes, we are also eager to explore how our clients can begin real-time direct payment settlement on a decentralised manner."

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Disclosure: The author holds BNB, ZIL and BTC at the time of writing.

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