IOUPay strengthens its position in Southeast Asia with KA$Hplus and its Islamic finance offers

IOUPay is advancing two important projects with the aim of driving new consumer growth and advancing brand loyalty in Malaysia and Southeast Asia.

Malaysia-focused fintech, IOUpay (ASX:IOU)announced two major product updates that will expand its offering and allow the company to significantly expand its customer base.

The myIOU KA$Hplus co-branded Visa prepaid card has been approved by Bank Negara Malaysia with a Stage 1 rollout beginning in July with the official launch in mid-July.

Meanwhile, myIOU Islamic is in development with a Shariah compliance certification for myIOU BNPL scheduled for Q1 FY23.

KA$Hplus Visa Prepaid Card

The KA$Hplus Visa Prepaid Card is a reloadable prepaid debit card that incorporates Visa payment features and is issued by Virtualflex Sdn Bhd in partnership with Fass Payment Solutions Sdn Bhd.

All KA$Hplus cards, once activated, can be used to purchase goods and services worldwide anywhere a Visa card is accepted or to access cash at ATMs or financial institutions.

Features include prepaid loading, top-up and debit card-style usage, with top-up via bank transfers and e-wallets.

A wholly-owned subsidiary of IOUpay, IOUpay Asia is collaborating with Virtualflex to provide a co-branded myIOU KA$Hplus Visa prepaid debit card, available to select myIOU customers in Malaysia under a collaboration agreement.

The main objectives of the myIOU KA$Hplus Card initiative are:

  • Access merchants not yet integrated with myIOU
  • Provide additional value to myIOU consumers
  • Drive new consumer growth and build brand loyalty
  • Generate additional revenue streams through potential future product enhancements
  • Expand myIOU product coverage to more merchants (local or international)

The myIOU KA$Hplus card is deployed in two stages.

Step 1 – Initial Map Deployment

Stage 1 involves issuing co-branded myIOU KA$Hplus Visa prepaid debit cards to selected myIOU BNPL customers who are currently approved and actively using myIOU Credit+.

These are customers who have qualified for a myIOU BNPL credit limit of at least RM3,500 (~AU$1,100) by passing an additional credit assessment.

In addition, the myIOU KA$Hplus card will also be issued to certain customers of I.Destinasi Sdn Bhd (IDSB), in which IOUpay holds a 42% stakeas part of a cross-sell marketing initiative currently under development.

The company has received from Bank Negara Malaysia (BNM), the central bank of Malaysia, the necessary approvals for the issuance of the myIOU KA$Hplus card, allowing the deployment of stage 1.

The objective of Stage 1, which will begin in July, is to test card issuance and deployment, reward loyal customers, build brand awareness and facilitate special marketing initiatives, e.g. for some IDSB clients.

Step 2 – Integration with myIOU BNPL service

The initiative aims to integrate the myIOU KA$Hplus card into the myIOU BNPL platform.

This will allow customers to purchase goods or services using the card wherever Visa is accepted and then choose to convert that purchase into a myIOU BNPL transaction seamlessly through their mobile device using the myIOU app.

The integration of stage 2 remains subject to the approval of the BNM for the link with the myIOU BNPL service.

Once central bank approval is complete and onboarding is complete, approved customers will have the ability to manage their personal budgets via their myIOU KA$Hplus card, choosing which payments to cover with 100% cash and which to pay later over time by selecting one of three myIOUs. installment payment plans.

The options will streamline customer account management and personal budgeting, and allow for more flexible buying habits.

Importantly, using the myIOU KA$Hplus card to make purchases and then converting these to short-term BNPL installment payment plans means that customers will not be limited in their choice of purchase to merchants operating on the myIOU platform.

This feature will immediately extend myIOU product coverage to many more merchants, as the Visa Prepaid Card allows purchases to be made at any participating Visa merchant globally.

Project 2: myIOU Islamic – Shariah Compliance

Southeast Asia, and Malaysia in particular, has large Muslim populations – Malaysian MyCensus data from 2020 shows its proportion of Muslim citizens at 60% and growingwhich means financing options that are compatible with the principles of the faith are essential.

Installment consumer credit products such as BNPL are naturally aligned with the Sharia principles of Islamic finance, given that they are based on interest-free and unsecured credit.

Requirements for compliance with Sharia principles go beyond the non-inclusion of interest charges in the calculation of loan repayments.

In Malaysia, to access Islamic finance and BNPL opportunities under industry best practices for Shariah principles requires certification from a Securities Commission of Malaysia licensed Shariah advisor.

IOUpay has worked closely with a duly licensed independent global Shariah advisory firm to achieve Shariah compliance certification for its myIOU BNPL service offering. Certification is expected in the first quarter of FY23.

After completion of the certification, the company will prepare to offer conventional and Islamic financing.

Islamic financing will require a partition of the myIOU wallet, integration with an Islamic payment gateway as well as separate documentation, policies and procedures, and an Islamic bank account for all Sharia-compliant transactions.

IOUpay plans to offer its Shariah-compliant BNPL service under the name myIOU Islamic with full branding guidelines under development.

The company is currently finalizing a collaboration agreement with a Sharia-compliant payment gateway and expects to complete the integration within 30 days of signing.

The main objectives of the Shariah compliance initiative include:

  • Enter BNPL’s Islamic Market, Serving Islamic Merchants and Consumers
  • Offer an alternative to the classic BNPL
  • Increase brand position in Malaysia and SEA
  • Prepare for territory expansion into other SEA jurisdictions with large Islamic populations

IOUpay’s Independent Non-Executive Director, Datuk Khairul Ismail, said myIOU Islamic would position the business to access new merchant and consumer communities, both in Malaysia and beyond.

“Certification from an independent, licensed, global Shariah advisory firm will assure myIOU Islamic clients that their transactions and purchases will be in accordance with the principles and teachings of Shariah,” says Khairul.

This article was developed in conjunction with IOUpay, a Stockhead advertiser at the time of publication.

This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.

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