Thai Stellar-based blockchain startup Lightnet has raised $31.2 million to boost cross-border payments in Southeast Asian countries.

The Bangkok-headquartered firm has completed a Series A funding round led by major financial conglomerates in the region, Singaporean United Overseas Bank (UOB) and South Korea’s Hanwha Investment & Securities, Business Insider Malaysia reports Jan. 10.

Stellar blockchain is used to replace “inefficient” payment systems like SWIFT

Implementing the Stellar blockchain, a major blockchain protocol that is used to operate eponymous cryptocurrency Stellar Lumens (XLM), Lightnet has a brave plan to replace established payment systems like SWIFT in Southeast Asian market, the report notes.

Chatchaval Jiaravanon, chairman at Lightnet, says that Lightnet is designed to offer low-cost and instant financial inclusivity and mobility to the “four billion lives across Asia Pacific.” Specifically, the firm is planning to promote financial mobility and inclusivity for the unbanked and underbanked Asians, the report notes.

On its website, Lightnet is described as a “frictionless settlement hub for the region to provide centralize real-time settlement.”

Participation from high-profile investors in the region

As reported, other investors included Japanese Seven Bank, which owns all the 7-Eleven stores in Japan and nearly 69,200 convenience stores globally, as well as Hong Kong-based token fund company HashKey Capital, Singaporean blockchain-focused venture capital firm Signum Capital and Hong Kong-based investment holding firm Uni-President Asset Holdings. The latter reportedly owns 9,000 Starbucks and 7-Eleven across Taiwan, China and the Philippines.

Lightnet CEO Suvicha Sudchai noted that Lightnet’s primary platform has been completed so far, while the first transaction is scheduled for implementation for Q1 2020.

Alongside the potential 500,000 cash agents across the ecosystem, Lightnet plans to integrate with a number of popular payment and remittance partners including American money transfer company MoneyGram. Other potential partners include Seven Bank, Chinese mobile payment solution provider Yeahka, Thai digital payment provider Ksher.

Lightnet’s vice chairman says that 70% of ASEAN population use cash or underground banking for financial transactions

The company is projecting to facilitate over $50 billion worth of annual transactions through its network by 2023, Lightnet’s vice chairman Tridbodi Arunanondchai noted.

Contacted by Cointelegraph, Arunanondchai noted that Lightnet expects such fast growth due to its focus on cash — the most commonly used form of money in countries of the Association of Southeast Asian Nations (ASEAN). According to the executive, as much as 70% of ASEAN population use cash or underground banking for financial transactions, and “SWIFT would never be able to touch them.”

Arunanondchai also highlighted that Lightnet will be able to provide instant financial transactions, while SWIFT’s settlement time accounts for more than three business days. He said:

“Current SWIFT, all transactions have to route back to the settlement bank in us which makes the settlement time T+3. Focusing only on the Asia time zone with direct transfer between Asia countries (no corresponding middlemen) would get us T+0. Current SWIFT also focuses only on the bank accounts. Our interoperable network connects to all money forms including wallets and cash in cash out points which are the highest usage of money form.”

Lightnet’s vice chairman also noted that the first live transaction in the Lightnet network would be completed by the end of January 2020.

Other companies fighting for leadership in cross-border payments

Lightnet is not alone with its plans to offer an alternative for cross-border transactions in the region though. On Jan. 8, Ripple, the company behind XRP, the third biggest cryptocurrency by market capitalization, announced partnership with Thailand’s oldest bank Siam Commercial Bank to build a system for instant and cheap cross-border payments.

Previously, Ripple CEO Brad Garlinghouse criticized SWIFT for so-called “transaction volatility,” elaborating that such phenomenon means a “calculation of time and volatility.” In turn, SWIFT successfully piloted instant cross-border transfers in Asia in July 2019, claiming that the instant payment pilot performed payments taking up to 25 seconds, with the fastest taking 13 seconds.

Update 15:00 UTC: This article was updated to add additional information provided by Lightnet’s vice chairman Tridbodi Arunanondchai.