Zac Cheah founded Pundi X with Pitt Huang in Jakarta, Indonesia, in September 2017. As a financial technology company, Pundi X began by offering a different kind of payment platform through its predecessor—the Pundi-Pundi app, a QR payment system. Pundi X became much more than a traditional payment gateway, as it soon allowed people to experience a borderless payment system with the use of its proprietary products—XPOS, XWallet, and XPASS. The company is currently active in over 30 countries and has shipped more than 5,000 XPOS devices. By 2021, the company aims to ship 100,000 XPOS devices all over the world, transcending borders and cementing its position as a world leader not only in the fintech industry but also in the blockchain technology space as a whole.

Ezra Ferraz: Prior to founding Pundi X, you were working in the browser and mobile gaming industry. What motivated your shift into the cryptocurrency space?

Zac Cheah: It definitely has something to do with my academic history. Since I studied computer security and mobile computing, I am familiar with cryptography, which is a basic feature in computer security. Now, whenever I deal with big clients, security comes up as a huge factor. This eventually led us to create a fintech app in 2016 that is known as the Pundi-Pundi app, the initial foundation that led to what Pundi X is today.

Ferraz: Can you tell us more about that app called Pundi-Pundi?

Cheah: The Pundi-Pundi app is actually a QR code payment system that is similar to Alipay in China. We created a similar technology and introduced it in Indonesia. Looking back, this was actually the base of what Pundi X is today. Now, we are seen as the new rising provider of point-of-sale POS—devices whereby you can actually use cryptocurrency along with the actual app to buy and sell items. I remember coming into the fintech space to serve a huge need by the Indonesian market. And hopefully, little by little, we are doing just that.

Ferraz: Can you walk us through the current community landscape in Indonesia, and on how they reacted to and supported your startup?

Cheah: It was very simple. Unknown to many, Indonesia has a lot of active cryptocurrency miners [cryptocurrency], and in recent years, the trading market has also been growing a lot. But outside of this, cryptocurrency has hardly had any activity in Indonesia, where a large proportion of the population is still unbanked. What we really want to do is serve the people—like in Indonesia’s case, where it hasn’t been touched by cryptocurrency. That brings us to how we’ve tailored our products for today’s use. Less than thirty percent of people living in Indonesia have bank accounts. And because of that, we want to make the transactions very physical, very offline, and very convenient. With our technology, people can actually go to convenience stores and pay digitally either through an electronic wallet or through digital currency.

Ferraz: Can you talk about how you planned and executed your public token sale? It is, of course, one of the biggest in Asia.

Cheah: Well, to be frank, I think we were just very lucky that it received the traction it did. We did our due diligence beforehand, but it is still surreal that we were able to raise thirty-five million dollars in just ninety minutes. I think it was received well because people were able to understand and get behind our mission very easily; that is, to push for the mainstream adoption of cryptocurrency and blockchain technology. In the end, over eleven thousand people shared our advocacy and backed us through our token sale.

Ferraz: Initial coin offerings [ICOs] are becoming an increasingly popular way for tech companies to fundraise. What advice do you have for other people in Asia who might be interested in organizing their own public token sale?

Cheah: What I would tell others who will launch their own ICOs is to distinguish themselves from other companies and to become early identifiers. This is how we went in. And from there, we basically really tried to build and expose ourselves not just in blockchain but even in the banking world. After that, we went to build this really raw product. That product was just an exploratory start of what we wanted to do. Secondly, blockchain companies must be very clear about the use cases of their token. It’s easy to get caught up in the innovations that blockchain brings to the table. If there isn’t any real use case, the price of your token won’t be justified for a long time.

They also have to focus and to build the best product. The rest of the things that are extremely important, like outreach and marketing, which is the mainstay, will follow suit.

Speaking from a personal perspective, I have this habit of figuring out how to create an idea that can be brought from zero to number one. Just the hope that it will explode gives me a strong nudge. But what strikes me very strongly is that doing one thing exceptionally well is so much harder than doing three things okay. And to do one thing extremely well is really the key challenge for any entrepreneur, since most, if not all, have multiple skills and projects they work on.

Ferraz: What do you think is the one thing you did really well that allowed you to take Pundi X to where it is today?

Cheah: One thing that you need to know as an entrepreneur—as a voice for your platform—is how to communicate, especially to different government sectors around the world. Be active and constantly seek feedback so you can open up doors to collaboration.

Ferraz: Are you also working with the government in terms of regulations and compliance in building a framework for blockchain security?

Cheah: Yes, we are. We are the founding members of the blockchain association in Indonesia, which has a direct connection with the regulators. We are also a part of the fintech associations in Switzerland, Singapore, and Hong Kong. But as with anything else, education is key. This is how we get people to support cryptocurrency and blockchain. I think the education industry would be quite helpful with this since we are addressing an industry-wide need. We want to address not only the specific industries that will be covered but also the wide array of issues they face.

Ferraz: In terms of educating the industry-wide issues, how do you make the market more wary of the tokens, currencies, or coins that are perhaps scams or aren’t as useful as the more mainstream ones?

Cheah: The very first thing that we take into consideration is that we cannot really do the proper education alone. That is why we have partnered with governments to add more insight and regulations on the whole blockchain and cryptocurrency industry. We hope to see that soon.

Since our government is not much into cryptocurrency, there are some government sectors that are thankfully eager to learn and use this technology. So, now we are working with a separate government entity to see how it can be a part of the project moving forward, especially since we are scaling up.

Ferraz: When I saw the XPOS in the Philippines, I heard that you had to overcome a lot of technical challenges to make such an innovative product. Can you share some of the technical challenges you had to overcome to make this device possible?

Cheah: Yeah, sure. I think one is actually the nature of the device itself. It wants to answer a very real-life question. An example is when I buy a coffee with my Bitcoin. If my coffee costs one dollar, do I want to pay two dollars or one dollar? Of course I’d choose the one-dollar option. So, we focused on the delivery of the XPOS to make sure that it would optimize the process while still keeping costs low.

For this XPOS, by 2021, we plan on getting at least one hundred thousand devices into the market. Now we are taking orders from three groups. One is in the retail group. They have people who are coming to buy from our website. The second is actually from large corporations, so we are also supplying large companies. These big corporations will roll out XPOS through their own networks. And the last one is distribution to large-district companies.

We did it this way to lay out a solid foundation for the development of the business in the future. That’s why the contributor sees the value in this project. We wait until it fully spreads, and then we adapt to what the market needs. We listen.

Ferraz: How did you market the XPOS to potential clients? What made them choose the XPOS over other alternative POS systems?

Cheah: A lot of people and businesses are promising the future. They are talking about what will happen in six months or even twelve months, but we do not do that. What we chose to do instead is to already have the product done. This is also apparent when we say we are doing adjustments. We showed the product to the people first.

I think this made the product more compelling, compared to others who might have created a conjuncture. We stayed away from overpromising and instead made it clear what it is our device can provide for them.

Ferraz: What kind of response did you get from the people when you showed them the product? How did they react when you spoke with them in person and when you shared your market education?

Cheah: Mainly, we saw appreciation from veteran crypto people. Those groups gave us the most interesting feedback. There are a lot of opinions about the token industry, and they were interested in finding out the use cases of our token.

Ferraz: Once you’re able to establish what your use case is, how do you share this? How did you actually market Pundi X’s use case to the people who bought into your public token sale in ninety minutes?

Cheah: We talked to everyone. This involved a lot of countries. We met with people in person so we could show them the product.

Since most of those who buy in have to have experience, we were basically testing out new waters. In this case, a lot of people are first-time public token sale buyers, which means they never had experience buying or selling ETH [Ethereum]. But I guess with the recent advances, they wanted to get into this really huge market where some people are even holding Ethereum for long periods. That’s why they wanted to participate. We have a huge community here, and now we also have various interests branching out from Asian countries like Japan, Korea, and Singapore. They make up a huge percentage of our token contributor group. These countries own the largest market share, too.

Ferraz: What are you doing now as you try to scale in the Southeast region and eventually the world? How are you reaching this 99.9 percent of people who don’t have any tokens or cryptocurrency yet?

Cheah: I think we are really lucky. The thing for us is that the market has blessed us with token holders who are very talented, knowledgeable, and capable. In the sense that they know which tokens are actually useful. So, we try to educate with as much exposure as we can with these talented market leaders. It is therefore reaching not just the ninety-nine percent but the whole cryptocurrency industry, as well.

Besides, the whole industry is new, so we get to learn and grow together. The great thing is that Indonesians now are one step ahead to buy and use cryptocurrency. We are now regarded as being among the top one percent who are trying to bring this technology to everyone in a more direct, more human way.

Ferraz: Do you have any main issues in your global goal to scale?

Cheah: To scale, we must first face the challenge of how we can make this a truly global movement. We are really working hard on that. That is why we are focusing on mobile delivery first.

We also made an effort to first obtain the necessary certifications for the XPOS before deploying them to our partner merchants. In the past year, we’ve received different certifications to operate XPOS worldwide, such as the CE certification for Europe; the TRA certification for the UAE, the Middle East, and North Africa; the FCC certification for the United States; and the KC for South Korea. Also, we are working with traditional point-of-sale solution leaders to integrate our XPOS platform.

Ferraz: Going back to the advantage of being based in Indonesia, how do you think this helped you in creating and building your own product?

Cheah: As I mentioned earlier, only thirty percent of the entire Indonesian population has bank accounts. And people really don’t think of Indonesia when it comes to any fintech advancements, so we decided to hit two birds with one stone. We wanted everyone to know that we are good and capable, and that we are able to create an innovative fintech product that is set to disrupt our own market—like Alipay, Coins.ph, and other great innovations in Asia.

This actually meant that Indonesia gains a huge advantage as it goes out to a bigger market, including the huge Philippines and Chinese markets. So, with that, we launched XWallet, our version of a cashless wallet, since we want to support every single payment gateway and platform for all to use.

To that effect, we also have an e-money license that allows bank cards to be used in mobile wallet transactions.

Ferraz: Most startups in Asia usually build only one product, but you guys are trying to build a whole entire ecosystem. What are the challenges of establishing an ecosystem with many moving parts and many moving products?

Cheah: The main challenge is what people think. Most people in Southeast Asia will always wonder about the claims of a smart payment app, which is a currency wallet, too. We want to support all the payment methods that are available in the United States right now, and that includes cryptocurrency. We want to bring all types of the payment gateway to Asia.

In our mission to support every type of payment, Pundi X has created a mobile app and a card.

Ferraz: You mentioned that you don’t have a comparable device yet. How does XPOS compete with any other legacy POS devices out there?

Cheah: We are actually not trying to replace the current POS, but if we are to do a comparison, we have the capability of the current POS. We are actually competitive already, and we try to be more competitive, if not the most competitive.

We want to become a one-stop payment gateway for all the current payment options, including cryptocurrency. In a sense, we might be replacing the old technology, but it is really adjusting itself into a more mature and developed market whereby we can use cryptocurrency as a payment option.

Still, I think that we are not offering a unique spectrum altogether, but rather a unique service that adds to an existing spectrum.

Ferraz: Where are you now in terms of rolling out the one hundred thousand XPOS devices?

Cheah: Right now, we are focusing on establishing key partnerships around the world that will help us distribute the XPOS. These are not only the partner merchants who will use the XPOS, but also partner distributors that will help us reach these merchants in their respective countries.

We are also adding onto the features of the XPOS by allowing it to accept more cryptocurrencies.

We are doing so through Open Platform, our token listing program where token developers can sign up and have their tokens integrated into our ecosystem.

Ferraz: Do you think you’re at an advantage with regards to distributing your device, especially coming from one of the biggest ICOs in Asia?

Cheah: Indonesia is a large market, and since we have a huge advantage from being among the first ones to set up an ICO type of business, we wanted to seize the opportunity of getting into that large market.

Since there was no offering yet in the market at the time, we took the demand and conscientiously decided as a team to focus and develop it here first, and then we could expand further. And who would have thought that we would achieve these initial goals by 2017?

Even though it is very competitive with the presence of Apple Pay and Samsung Pay, we wanted to prioritize the ability to be a working unit as a whole that covers all of these existing types of payment gateways with the addition of cryptocurrency. We do not want to distribute it sparsely.

Essentially, we are all about building and promoting the whole ecosystem. We are not into selling and distributing just the hardware. That is our long-standing motto.

Ferraz: In your business model, I know that you incentivize store owners by giving them a percentage of the transaction fees. How did you arrive at this setup? How do you make it sustainable?

Cheah: We want to be competitive. That is why we let them keep some fees. To really be very competitive is one of our goals. Now, why did we have this motto?

It is actually based on some personal experiences in the tech industry. A number of famous and successful people say that you need to take the market and be the elephant in the room—in a good way, of course. So, we did. We needed to take the market and increase our market share. That is another reason why we do not want to make money by selling hardware alone. We want to have a real, working ecosystem everywhere.

Ferraz: Any major technological challenges or issues during the entire development? I remember that you had more than eight prototypes.

Cheah: On the hardware side, we actually had major issues with security. So, we created a system wherein if you try to tamper with it, then it will self-destruct on its own. Not a literal destruction, of course. This technology is proprietary, and from what we know, we are the first in the world to create and distribute this type of device. We have achieved a real, secure, hack-free system for POS.

Another is the way that we want to confirm small transactions, like purchasing a cup of coffee, so that it is confirmed in real time without incurring large fees to pay for a small-value transaction.

Ferraz: What is your vision for Pundi X in the coming years? Looking beyond the one hundred thousand devices, how do you see Pundi X in relation to changing the financial landscape in Indonesia, Southeast Asia, and the world?

Cheah: I think that eventually blockchain will play a very important role, perhaps as important as what the Internet is today. It took such a long time to be where it is today with so many regulations and innovations that continue to change the game. I believe that blockchain will have as many developments soon, and in order for progress to happen, we need the government and international agencies to regulate everything—from exchanges to currencies to tokens, to hardware, and everything else in between where security is implied. I think that this is the most important thing. It might even be the key to this whole system moving forward. Who knows, it might replace the Internet as more people look for security and privacy.