The "Nubank" of Southeast Asia: Building a credit card business for millions in countries without a credit reporting system | The Pulse of the World

Text by | Ren Qian

Part01

The Definer of New Rules

What does it mean to issue a credit card in Indonesia?

Multiple challenges must be addressed simultaneously: fundamental differences in religion and culture, an unfamiliar regulatory environment, a huge lack of personal credit information, and the temptation of greedy high - interest loans.

Indonesia has a total population of nearly 280 million, with over 80 million salaried workers having stable incomes, among which 55 million have social security. However, except for a small group of elites served by traditional banks, the credit card penetration rate is no more than 3%. As much as 97% of the population doesn't even have the qualification to be "designed into the system".

Indonesian local financial institutions still remain at a "primitive stage" in terms of technological level and experience know - how. Chinese overseas teams understand technology, but most of them can't resist the temptation brought by products such as usury and Payday loans. Gold - diggers from Singapore and India choose to do BNPL (Buy Now Pay Later), like Kredivo.

The underlying reason is that due to the lack of digital risk - control management capabilities, Indonesian traditional banks prefer asset management based on collateral. They have extremely strict access standards for all unsecured retail banking services and mostly conduct manual background checks on customers. Banks prefer to provide credit card services to high - quality whitelisted users within the bank, such as existing large - amount savings users and healthy car/ mortgage loan users.

So in the past, the biggest lie in doing fintech in Southeast Asia was "this market is undeveloped". The truth is that this market has been developed for decades, but no one has ever given "credit identities" to salaried workers and small business owners - they are the capillaries of the economy.

However, a company has changed this situation.

Now in Indonesia, open your phone, download the YUP Wallet APP, and you can apply for a credit card and activate the QR - code payment function of YUP wallet in just a few minutes. More and more Indonesian young people are getting used to obtaining bank - like products and services from YUP. Currently, in addition to millions of individual users, YUP covers over 50 million merchants, with nearly 50 million annual transactions.

Seven years ago, when the founding team of YUP was conducting research in Jakarta, they saw that some excellent local VC peers with good educational backgrounds and work incomes couldn't even apply for a basic credit card from BCA Bank (the largest commercial bank in Indonesia). Then, they smelled an opportunity.

After founding YUP in 2021, the team spent three years completing the most crucial step in the payment infrastructure - creating a credit card product that users "are willing to use, can use for free, and can enjoy discounts".

The results of validating this model are as follows:

1. Among salaried workers with an average monthly income of $500 - $600, a single user spends over $300 on the YUP credit card every month. It can be said that except for paying rent, 80% of daily expenses are completed through YUP. These people have basic bank debit cards, cash, and other e - wallets, but with YUP, they will transfer their payments, and YUP has become the main or even the only payment tool for Indonesian salaried workers.

2. YUP is not just a simple physical credit card, but also a platform with high activity and traffic. The DAU (Daily Active Users) of YUP's APP is close to 30%, and the MAU (Monthly Active Users) is close to 70%. Users visit the APP for more than 20 days on average every month, approaching some local life service platforms in China.

3. The profit points are not only from the interest rate spread but also from integrated marketing, life benefits, and traffic monetization on the APP.

This card gives Indonesian young people and salaried workers the "right to be trusted" for the first time. Its underlying logic is no longer "credit limit" but "social identity confirmation": you are bound to a certain system. This card also gives YUP more room for imagination in Southeast Asia.

When "Waves" noticed this company and interviewed its founder Zhang Dong and CFO Guo Tong, Southeast Asia was becoming a new base for supply - chain transfer, capital, and technology spill - over.

As the spill - over of the manufacturing industry creates a large number of job opportunities and boosts consumption locally, the barriers that YUP has established in the ecological position will also be magnified: directly binding the daily consumption of salaried people and controlling the "credit behavior" scenarios with the highest frequency; covering the largest merchant network in Indonesia and building a "ground network" in the financial sense; being able to collect data and build behavior models without offending beliefs, languages, and behavioral norms for expanding the Internet traffic pool; and at the same time, helping Indonesia further improve its personal credit system single - handedly.

It is reported that in 2024 alone, YUP helped users report more than 30 million healthy consumption personal credit records to the central bank.

In fact, what YUP is doing is applying the know - how of China's credit payment evolution over the past 20 years to a more complex, difficult, and explosive market. Traditional banks have long ignored this seemingly impossible market due to high physical branch costs and rigid risk - control models. YUP seizes this structural gap and reshapes financial services with digital means.

YUP's core competitiveness is to transform the "fragmented data footprints" of Southeast Asians into credit assets and continuously mine traffic based on this set of assets.

Part02

Upgrading the Game: From Payment to Ecosystem

YUP starts with credit cards but follows a "content - platform aggregation" path, shifting the understanding of finance from economic models to a combined understanding of religion, community, language, and social behavior.

For example, Indonesian salaried users may not know what APR (annual percentage rate) is, but they must understand the importance of Ramadan donations. So the "Ramadan special zone" of YUP's credit card with an interest - free period and visualized logistics donations is more effective than any marketing. In addition, it assesses the business stability of small and micro - merchants through the activity of WhatsApp groups; connects to the meteorological bureau's flood warnings to dynamically adjust agricultural loan amounts; and analyzes the donation frequency of mosques to predict users' repayment willingness.

In addition, YUP also expands through local life services and improves the benefit system.

The former allows users to evaluate consumer merchants based on payment data and gradually develops services such as merchant rating recommendations and reservations. This is the first case in Indonesia, somewhat like the "Dianping" in Indonesia. The latter directly cooperates with nearly a thousand well - known local and international brands in Indonesia, such as KFC, Burger King, Häagen - Dazs, Nike, Adidas, Alfamart, etc. It adds a benefit system, a points system, and a benefit mall in the APP, making it more like a "life welfare club" than a bank.

YUP turns the credit card into an API interface, transforms activity into assets, and turns transactions into traffic. In a financial environment without monopoly by giants, it takes the lead in building a local life ecosystem.

Zhang Dong told "Waves" that no monopoly super - app will appear in Southeast Asia in the next five years. Although there are some potential giant enterprises in Southeast Asia, such as Shopee, Grab, Gojek, Lazada, TikTok, Temu, etc., all parties are still struggling in the competition of their main business tracks. If the battle in the main business is not over, it is difficult to allocate resources and funds to more vertical fields, such as payment.

"Grab enters the payment field through the ride - hailing scenario, but YUP can cover consumption scenarios deep into villages without asphalt roads. This is the biggest difference," Zhang Dong said.

In the offline scenario, central banks in Southeast Asian countries are vigorously promoting the unification of payment QR codes, breaking the independent deployment of QR codes by e - wallets. At this time, the payment license comes in very handy.

YUP holds the highest - level e - payment license E - Money in Indonesia - which the founding team spent nearly two years obtaining (the Indonesian regulatory authority has almost stopped issuing it since 2020). It can access the payment QR - code network of over 50 million merchants, and at the same time, YUP's physical card can support POS card - swiping transactions at millions of merchants in Indonesia.

That is to say, YUP's products can conduct QR - code transactions in any store in Indonesia. It has also established a strategic cooperation with Visa and is the only fintech company in Indonesia with this qualification. At the same time, YUP supports all online transactions in Indonesia and covers all e - commerce platforms. It can be said that with the identity of a credit card, YUP can seamlessly connect in every giant's scenario.

YUP reaches a strategic cooperation with VISA and launches the YUP VISA credit card

With the combination of the credit card transaction model and e - wallet QR - code payment, all payment scenarios naturally do not reject YUP. Zhang Dong believes that "no platform will reject credit cards, no platform will not accept QR - code transactions, and no scenario will not accept the standard QR - code service of e - wallets."

It is precisely the full coverage of tens of millions of online and offline scenarios that enables YUP to develop a differentiated customer - acquisition route. Zhang Dong revealed that over 80% of users come from organic traffic. They come from tens of thousands of Indomart convenience store chains, more than 700 KFC stores, 60 large CGV cinema chains, hundreds of Japanese ramen restaurants under the Hokben brand, and countless mom - and - pop stores on the roadside.

Not all teams coming to Indonesia to seek gold can achieve all this. "The product design, business models, and structures forged in the Chinese Internet wave, which we take for granted, are unknown to the locals," Guo Tong told "Waves". In these aspects, YUP can be regarded as having a competitive edge, and "know - how determines everything".

Zhang Dong worked at the consulting firm Accenture in the early years. Later, as a venture capitalist and serial entrepreneur, he has 10 years of experience in the Southeast Asian fintech field. Another co - founder, Zou Zhili, has worked at the Bank of Communications Credit Card Center, the Southeast Asian credit card business line of ANZ Bank in Australia, and served as the Chief Risk Officer of the well - known BNPL brand Atome in Southeast Asia. And CFO Guo Tong served as the vice - president of the investment banking department at Merrill Lynch before joining YUP and has rich investment, financing, and listing experience in the United States and Asia.

In a sense, as the founder of a global fintech company, you must live here in person, understand the local language and culture, have bank resources, be able to build a team, obtain licenses, modify products, and implement processes before you can survive. Western teams are not acclimated, Chinese teams are not willing to stay for long, and local teams lack know - how, so YUP has no opponents in the short term.

The deepest barrier to taking root in a market may not be the product or capital, but: whether you know earlier and better where this market is going.

Part03

The Nubank of Southeast Asia?

For a long time, public reports have often used "the Nubank of Southeast Asia" to describe YUP, which is understandable - digital banks represented by Brazil's Nubank and Mexico's Stori also provide credit card and personal credit services, and the underlying logic is inclusive finance. The originator is Capital One, which provides banking services for low - income people in the United States.

In early 2016, when Zhang Dong was still engaged in investment, he spent two weeks in Brazil conducting in - depth due diligence on the fintech startup Nubank. The founder David Vélez left a deep impression on Zhang Dong. At that time, Nubank's user behavior analysis and business model in Brazil changed his understanding of the attributes of credit cards and the development path of Internet products. This was the origin of his entrepreneurial spark.

Over the years, large - scale digital banks have emerged in major markets around the world, such as Revolut and Monzo Bank in the UK, N26 in Germany, and Chime in the US. In developed markets with mature financial industries, the business models of digital banks have also been fully verified. Nubank has even supported a market value of over $50 billion and annual revenues of billions of dollars with 30 million credit card users.

However, when looking at Indonesia with a population of nearly 300 million, the situation is different: Nubank in Brazil is a "down - grade replacement for usury" and has to defeat financial corruption, while YUP encounters users who don't even have the concept of "credit"; Nubank has to compete with traditional banks, while YUP is building from scratch - first defining the rules of the game and then bringing users into the game.

The latter faces greater challenges. This may also explain why YUP's revenue has increased six - fold in less than a year since the last round of financing (Series B in August 2024) - because the market is large and empty.

An investor in the Series B round once told us that he believes that when YUP was founded in 2021, it had two time windows simultaneously: 1. Doing credit cards in Southeast Asia was a non - consensus thing with almost no competition; 2. There was still a relatively large amount of hot money in the market, and capital was willing to give the team time to verify the basic model.

Now, relatively innovative financial products, technological advantages, a clear development path for the business model, and the localization strategy brought by the team background and international capital support have jointly contributed to YUP's rise in Indonesia.

Regarding the risk - control issue that fintech companies care most about, YUP has self - developed a deep visual recognition system to achieve accurate comparison and rapid search of face images, ensuring data security and effectively identifying potential suspicious customers. At the same time, the team has also integrated multi - source data such as financial transactions, consumption behavior, and assets and liabilities, and combined algorithms such as LSTM and LightGBM to efficiently mine potential risk features in time series. In addition, the company also applies large - model technology in fields such as intelligent customer service, precision marketing, intelligent collection, and compliance supervision.

In the view of the YUP team, they are not a Chinese overseas company but a pure Southeast Asian local technology company from day one. More than 80% of the nearly 300 - person team are local Southeast Asian members, and the founding team has been working and living in Southeast Asia for a long time.

YUP has raised $70 million in history, acquired one million users in four years, and maintained a low non - performing loan ratio. Zhang Dong revealed that it is expected to achieve break - even in the second half of this year and will expand to Vietnam, the Philippines, Thailand, and other places in the future.

"In the next 8 - 10 years, we will serve over 50 million credit card users in the Southeast Asian region and plan to go public in 3 - 5 years," Zhang Dong said.

Image source | Unsplash / Provided by the interviewee