From Coffee Shop to Global Fintech: The Airwallex Journey with Matthew Sek

Chris: 00:00 Hi, it's Chris Titley, Fintech Fun podcast series. I'm joined by Matt Sek, VP for Airwallex ANZ. Matt, thank you so much for being part of this series. Matthew: 00:08 Thank you, Chris, for having me.

I'm excited to be here, share some insights. Chris: 00:13 Matt, for the listeners out there, a lot of people are familiar with Airwallex, but I'd love a little bit of a history of the business and what Airwallex does. Matthew: 00:21 I'll kind of take you to the very start of where we were founded. We actually started In a non traditional sense, we were a coffee shop here in Melbourne, in Docklands.

So we didn't, we didn't start out to be a fintech, uh, directly. Uh, but the founders of the business, uh, had a lot of challenges paying overseas suppliers. Matthew: 00:41 So you can imagine sort of paying for your coffee beans, paying for cups and the likes and in a, in a coffee shop business. Uh, and that led them to start this, this business, which kind of, uh, started off as a money transfers business.

So. We wanted to essentially solve the pain point for SMBs collecting and paying suppliers overseas. Matthew: 01:03 So collecting from overseas customers, setting up international bank accounts, but also to pay out international suppliers in a faster, cheaper, more reliable manner than the options available in the market. today.

So that was kind of where we were, where we started since then we've kind of branched out a lot more to a full suite of, of, uh, financial products. Matthew: 01:23 So we can do a payment acceptance and checkout, uh, today. So we can accept credit cards, uh, you know, card payments, direct debits, et cetera. Uh, we can also sort of, uh, we have a corporate card product as well and the spend management solution as well.

So where, you know, customers can issue corporate cards to employees, be able to kind of track spending, be able to manage reimbursements for employee expenses, et cetera, uh, in the process. Matthew: 01:46 So it's basically all of these packaged in the one neat solution for customers. Chris: 01:50 I'm curious to know from the coffee shop to start to where Airwallex is now, the idea of being global, the idea of being, uh, helping businesses globally, where that came from and how important that is from an Airwallex point of view in terms of being, um, global.

Matthew: 02:06 I think we have a, we have a thesis from day one that, um, the number of businesses that are transacting globally is ever increasing, right? And I think in hindsight, sort of like COVID has further accelerated this, um, trend. Uh, and what we've seen is that a lot more businesses are hiring employees overseas. Matthew: 02:27 Like there is a talent shortage in Australia itself.

Uh, so more and more businesses are hiring all over the world, right? Whether that's in both developed and developing countries around the world. These days and age, you see a lot of businesses kind of paying for some level of software subscription in a foreign currency, and that's just inevitable. Matthew: 02:44 And then lastly, you just kind of see sort of like a lot more businesses are more digital by nature.

Uh, and so, you know, selling overseas or having a few overseas clients, um, is becoming more and more normal. And so initially that started mainly between Australia and New Zealand, but we see a lot of Australian businesses kind of like expanding into the US, Canada, UK, Europe, uh, which are gigantic markets overall, uh, to tap into new customers, segmented new customer base. Matthew: 03:11 And this is particularly true for tech businesses or e-commerce businesses. Uh, in the market, but, um, by and large, I think like as the trend sort of increases, I think like our view is that every single SME business would have some level of global exposure, whether that's just paying for a single software subscription in US dollars, and that could be like 10 a month.

Matthew: 03:32 all the way to having, you know, a multinational business overseas, anything in between. Um, what we don't, what we don't see is this kind of business just being kind of stuck domestically in Australia. And that's why I think we're set up to build what we have built, which is linking these businesses overseas, right? Matthew: 03:50 Helping them save money and time as they start transacting more and more.

Chris: 03:55 Matt, you touched on the product suite and the different offerings. I'm interested to know how You prioritise though, and what are some of the major products that Airwallex have out there that everyone finds pretty popular? Matthew: 04:08 Good question. Matthew: 04:08 I think our two most popular products are FX and global payouts.

So basically the ability to do foreign currency conversions and pay suppliers and employees internationally. Uh, and then secondly, our corporate cards product as well. Those are our two most, uh, like most of our customers, like I would say a big majority of our customers use those two products. Matthew: 04:29 Uh, in particular with our Corporate Cards products, uh, we don't charge any international transaction fees, uh, which means, uh, they save every time they spend on an international transaction.

Uh, and that savings can add up to like, between 3 to 5 percent for them. Um, in terms of your other question around sort of like, what is on the horizon for us? Matthew: 04:48 I think, uh, as I mentioned earlier, we kind of started with Def X. We kind of broadened it to check out corporate cards.

I think, uh, the obvious sort of question that we get a lot from customers is like, Are we going to do lending? And are we going to move into lending? Uh, and we have actually sort of started trawling this, uh, we've got a credit cards product live in Hong Kong at the moment. Matthew: 05:09 We're trawling that in Australia and we'll be looking to roll that out more broadly.

in 2025 itself. So, that is definitely an expansion area for us and one that is hotly demanded by our customers. Chris: 05:21 And Matt, um, that's obviously another, a growth path for the, for the company. I'm also curious to know about the amount of data that you guys get in, in regards to small businesses, cause it is the, it is the engine that powers multiple countries around the world and what you can do with that data.

Chris: 05:37 I did notice recently that you've released Uh, like a spend management report. Do you want to talk about that and what that was about? Yeah, I think I, Matthew: 05:44 With the, um, spend management report that we saw, we basically surveyed a whole heap of our customers, but also non customers, so basically SMBs, uh, in the market to just better understand the challenges that they face in managing, uh, spend. Matthew: 06:01 And I think sort of like the biggest, biggest insights that, that we had out of that, that Um, that we've seen is that a large majority of businesses and that that's sitting at 63 percent of businesses in the SMB category are still managing expenses and reimbursements through spreadsheets.

And so they don't have proper tools in place. Matthew: 06:27 They don't have live visibility on cash flow. Uh, and oftentimes without a proper tool, these types of spending and approval processes go onto various forms of channels, right? Emails, Slack, WhatsApp, uh, many, many different channels.

And so for a lot of finance teams, I think this is a struggle, right? Matthew: 06:48 Ultimately managing cash is kind of quite important to businesses. And this is sort of like one area that our spend management report at least highlighted, um, that despite advancement in technology and tools and services available. A lot of businesses are still sort of resorting to very traditional unstructured methods of managing this, um, which is something that we're, we're, we're determined and set up to sort of solve, uh, over time as well.

Chris: 07:14 Yeah. And Matt, I suppose for small businesses, sometimes they don't know what they don't know. So how important is education in Airwallex to educate people to say, actually, there could be a better way. Um, and just, you know, try this.

Matthew: 07:28 Yeah, I think that that's sort of like, and definitely an area where we are seeing sort of like, I think the fact that 63 percent of our survey respondents said that they're using spreadsheets. Matthew: 07:40 Um, I don't think that is by choice. Right. I think like it is, uh, to your point, it's, it's due to lack of awareness of what's available in the market.

Um, and like a solution like ours isn't, uh, at the same time, like super expensive compared to the benefits it brings to, to customers. Right. Uh, I think that the challenge with, uh, if we did kind of spend management overall as a, as a, as a topic area that the biggest challenge that we see is this whole, uh, dynamic of, uh, How much do you empower your employees to spend by giving them a corporate card that is pre approved versus you're in a business where you don't trust your employees necessarily and you say why don't you spend first and then you claim a reimbursement later and I would then decide whether or not to approve that reimbursement and I think right now what what at least we find is that a lot of SMBs at least focus more on the the latter solution which is Employees spend first and then claim reimbursement.

Matthew: 08:44 But what a lot of these businesses don't, uh, realize in the process is one, it's a man, it's a very manual process, right? And, and one that actually has a lot of impact on employee morale and, and, and like how, how empowered employees feel. And secondly, when you go down a reimbursement process, you don't actually. Matthew: 09:06 have live visibility of what's already been spent and reimbursement is going to come in a month, two months, three months later.

And that's the time period in which you can actually close your books. And so that delay is often not factored in. And so to your point around education is actually us spending a lot more time on, um, making some of these sort of like benefits of moving from a reimbursement model to a, to a corporate card model. Matthew: 09:29 And the benefits of moving that, uh, to, to, to that corporate card model, more parents.

to the SME market, but also making sure that they're very clear that there is a level of control that they can actually have. So like these corporate cards are not just unlimited spending credit cards. There are tools in place like, like air wallets or what we offer in terms of, um, allowing finance teams to actually set proper controls on these cards. Matthew: 09:53 So employees don't go out and just, you know, go on a, go on a shopping spree altogether.

Chris: 09:58 I think one of the, the sort of not talked about factors in small business, you know, there's, there's the cost of things, there's the price of things, but time is something which people don't often focus on and getting time back to do other things and making, you know, having tools out there that are more efficient to actually give back time and if you sort of reverse engineer like an hourly rate on someone, you give them back an hour, that's quite a lot of money.

Chris: 10:23 Uh, that adds up. How do you think, you know, if people start using some of these tools and start actually understanding the benefits, how beneficial that could be to small businesses? Certainly, Matthew: 10:34 I think, I mean, like quantifying these sort of like what I would describe as admin tasks. Is often really hard, right?

Matthew: 10:44 I think generally, if you're one of the most precious resources for small, medium sized businesses is time, right? But actually quantifying, sort of like how much time you are spending on tasks that you could potentially automate, especially in your finance processes is often sort of something that is overlooked. Matthew: 11:04 Um, but like, I actually, to be honest, don't have a very. straightforward solution to your question, Chris, because we can go on webinars or podcasts like this and sort of like try and quantify this, trying to explain sort of like, you know, true case studies to say, Hey, this client actually saved this much time.

Matthew: 11:21 But I do think that, um, more broadly, Uh, there is sort of a potentially even a role more broadly in our education system. Like as we kind of train up fresh grads in, in, in accounting and finance, like what are, what are the very beyond sort of like a university course? Kind of focusing on just here is how you do your month and sort of like reconciliation and balancing of your books. What are actually tools that you can use as a finance and accounting professional?

Matthew: 11:53 To actually just automate a lot of processes to actually get a lot of visibility and actually making the educational courses a lot more practical rather than just theoretical base Uh, if that makes sense, right? Because I think the end goal for a lot of finance professionals is value add, right? And so the less time they spend on admin, the more time they can spend on forecasting cash flow, figure out growth strategies, figure out pricing strategies that help the business grow rather than chasing receipts around, uh, for employees who have not submitted receipts just because they need to justify an expense to the tax office.

Chris: 12:27 That's a very good point, Matt. And I agree with you wholeheartedly and I've just, you know, some of my colleagues, um, that run small businesses, they spend half a day doing something or a day doing something, which is, you know, might be setting up a YouTube channel or it might be trying to work out, you know, chasing an invoice or working at an invoice and that actually, you know, they get there and it's like their day is done that they've actually just done a monotonous task, but you know, having tools at your fingertips to enhance productivity, I think is hugely beneficial um, to, to, to the business and also to the state and the nation.

Chris: 13:00 And I suppose, um, with that, um, my question, uh, my next question is around Airwallex as a company, it's grown significantly in its scale. I mean, you enjoy being part of the group that's actually, you know, I believe now one of the, the, the non unicorns in a, in Australian, um, startup, uh, landscape. Matthew: 13:19 Yeah. I think I've been with Airwallex for about five years now.

Matthew: 13:22 It's been a, it's been a good, uh, growth journey. I think from a headcount perspective, I joined when we had say about 400 employees and now we're more than 1600 globally. So we've kind of grown about four times since, since I joined. And so it's been, it's been tremendous sort of learning on how we actually get from, Zero to one, one to 10, you know, 10 to a hundred and so on and so forth.

Matthew: 13:45 And so I think for us, the biggest challenge being in financial services, uh, so we're, we're quite different from the other unicorns, right? A lot of the other Aussie unicorns obviously, um, you know, the likes of Canva, employment hero, like they're, they're all wonderful businesses. Uh, they've all achieved massive successes both domestically and abroad. Matthew: 14:06 Um, I think that the biggest challenge for us is like.

At the end of the day, we set out to build a financial solution for businesses, uh, and, and with financial services, actually, regardless of sort of like how strong our product is, and there's always room for improvement in our product, I think building trust is, is quite challenging, uh, because at the day, we're dealing with people's money, right? Matthew: 14:28 And these are hard earned money from SMBs. And so a lot of sort of like what we focus on doing in the market is like, how do we build?

Stronger trust. How do we build greater beyond just awareness of what we do? Uh, how can we help businesses trust us as a FinTech? And I'm sure that this is something that is true across most FinTech businesses that you speak to Chris, uh, on a, on a, on a weekly or monthly basis.

Matthew: 14:52 Right. Uh, and, and, and building that trust is, is actually quite, quite challenging. And I don't think we've kind of cracked the secret sauce. We've definitely had tremendous growth, but that's something that we're continually sort of like working on.

Beyond just marketing and advertising, how can we, we, uh, uh, partner up with a lot more trusted organizations to actually better educate customers on what potential sort of like SMEs and what we actually do and how sort of like secure, uh, the solution we've kind of built, uh, is for them. Chris: 15:23 Matt, when you're not thinking about, um, cross border payments, uh, fintech innovation, uh, looking after your customers, um, all the things that go with your role and staff and scaling to, to where you are now and being part of a, a company that's, that's, you know, gone up four times pretty much in terms of staff since, uh, since you've joined.

Chris: 15:42 What does Mac do to, to actually wind off, uh, wind down and, and take some time away? Or is it, is it not possible? Matthew: 15:49 Good question, Chris. So, uh, I've got a, I've got a pretty young family at the moment.

Uh, so I've got a, I've got a 20 month old baby, uh, at home. And so I spend a lot of time playing with him. Um, but, uh, at the same time, my wife and I enjoy traveling a lot. Matthew: 16:08 Uh, and so, uh, we, before we met.

the baby before, before we had, uh, Ethan, Ethan, my son, um, we thought that, you know, we'll do all the travel we can. And as soon as we have the baby, we'll stop traveling, uh, because it's just too hard to go overseas. Uh, that hasn't been true. Uh, so far we are still traveling and, and, you know, we're about to sort of like go on a, go on a major trip.

Matthew: 16:33 In the coming months, but, uh, we make at least two to three trips every year. And it's, it's also quite important for me to get the time to recharge, uh, in between. And I like to think about sort of like my time at work, as running sprints. Right.

And so we run, we have pretty aggressive growth targets, growth ambitions. Matthew: 16:53 And so I just need to make sure that, uh, I don't end up kind of running this endless marathon. Uh, and that I take sort of like every, you know, You know, five or so months, um, I go on a vacation overseas and I make sure that I find time to relax and chill out and then come back and re energize to kind of start running again. Matthew: 17:12 Um, and so as part of that travel hobby, um, one interesting fact about myself is I like to do a lot of.

Uh, frequent flier point hacking. Uh, so I book a lot of my trips on points. Uh, so that kind of helps with, uh, uh, lowering my travel costs, uh, for the yacht. It's, it's more, it's more a hobby and I get a lot of enjoyment out of, kind of, you know, getting a good deal out of the airlines itself and hotel groups.

Chris: 17:38 Matt, that's the first actual hobby of that, that I've come across in my podcast. So congratulations on that. Um, I've always been fascinated about the ratios of spend versus points on what's best to spend. Is it onto airline travel?

Is it onto retail stores? And also, Um, the amount of promotions that you get, it's, uh, like the algorithms must be, um, very sought after. Chris: 18:02 And the actuaries within those organizations must have a, um, uh, keen eye on things. But for people like yourself that want to try and get around it, I'd love it.

Do you have a spreadsheet or how do you kind of. Matthew: 18:15 I have a spreadsheet set up, um, I think I'm probably one of, uh, I wouldn't say I'm the biggest contributor, right? Matthew: 18:21 But like, I'd definitely be up there. There's some contributions to either Qantas or vergence kind of like the bottom line.

Uh, from, from the loyalty sort of like program profits, uh, itself. These days you can get, you can, you can get points on any, almost anything, right? Groceries, utilities. petrol, um, you know, travel, et cetera.

Matthew: 18:40 And so like, most of my points that do not actually come from travel itself, but or on day to day sort of like spending and just being kind of pretty savvy with, with that. And then also like, I'm, I'm, I'm a big planner, right? So I plan my trips way, way in advance, so I can lock in some of these bookings and ridiculous sort of point rates. Matthew: 18:58 Right.

And so, you Uh, also because, you know, my son is still pretty young and so we don't have to be locked into traveling during school holiday periods. And so, um, because that's when you're not, you're not going to get availability on these redemption seats. And so that's what, that's what I kind of like. Matthew: 19:14 It's a lot of work, actually, if you think about sort of like, you know, earning points and calculating and finding reward seats.

Uh, and it's probably, uh, not a good use of my time, but I actually genuinely get fun out of it. Uh, and so. I would spend weekends kind of like looking up some flights or planning for my next holiday, and my wife would literally sort of, um, complain and nag me and kind of like that I'm wasting too much time, uh, on it. Matthew: 19:40 So, it's a hobby that I, maybe at some point I would, I would, I would grow out of it.

But for now, it kind of keeps me, keeps me occupied on the weekends. Chris: 19:49 Matt, I'm just going to say one thing before we leave it there is that, uh, take it while you can in regards to non school holiday periods. I've got three kids at school and that's all we can do right now. Chris: 19:59 And it's peak, peak hour traffic in terms of, uh, prices for travel and accommodation.

And you just have to, you know, Grin and bear it if you want to go away for your school holidays, so make the most of it while you can. Um, Matt, thank you so much for being part of the FinTech Fund podcast series and giving us a little bit of a glimpse of the Airwallet story, the growth, the scale, the, uh, the operations are at now in terms of, uh, not just being an Australian ideation of a coffee shop to where you are now, some of the products that you've, you've got into market and some of the tools that you can enhance small businesses with.

Chris: 20:31 Thank you so much for your time and looking forward to catching up. Matthew: 20:33 All right, thanks for having me on the show, Chris, uh, appreciate the chat.