As one of the few women in fintech, Indrawathi Selvarajah defied the odds to start PayHalal, Malaysia’s first Islamic payment gateway

KUALA LUMPUR, March 9 — As a corporate lawyer with 25 years of experience, Indrawathi Selvarajah was first drawn to Islamic fintech because of its ethical financial system.

Little did she expect to face so many hurdles when she decided to start PayHalal, Malaysia’s first shariah compliant payment service provider in 2017.

First was the lack of funding because there was almost no Islamic venture capital fund available.

“Even if it’s there, the VCs (venture capitalists) would rather fund male-founded or male-run companies,” she said.

Then VCs would often prefer pitches from male entrepreneurs over their female counterparts.

Additionally, women-run startups are often overlooked as they tend to focus on solutions to uniquely women problems.

But these challenges only made Indrawathi stronger and four years later, she succeeded in seeding and funding PayHalal.

A merchant licence was issued by Bank Negara in 2021.

“So here we are today, the only one operating as an Islamic merchant acquirer/payment gateway with shariah certification,” said Indrawathi, now a fintech law specialist.

“Building it up from scratch was an interesting journey that stretched us to the maximum in terms of our capacity to see something, that’s never been done, through.”

PayHalal director of sales, Azhani Azman, agrees.

Azhani Azman, Director of Sales of Payhalal speaks to Malay Mail at Souqa Fintech Sdn Bhd, Bukit Damansara March 7, 2023 --- Picture by Raymond Manuel

She explained that in banking, there’s conventional and Islamic but people often forget that Islamic needs are infinite.

The concepts of akad or the transaction performed by two or more parties and murabaha, in which the seller and the buyer agree to the cost and markup are key in shariah compliant banking.

“With our payment gateway, there’s no riba (charged interest) and no gharar (uncertainty, deception),” explained Azhani, a former banker.

“For all of our transactions we have wakalah or authorisation, the most important criteria for Islamic payment.”

To date, response has been good with a growth of 30 per cent month-on-month.

It targets 10,000 women merchants by the end of the year.

Unlike other payment service providers, PayHalal has Halal Kitty, which offers their merchant customers the option of collecting payment via QR payment instead of the conventional payment terminal.

“Halal Kitty is an offline QR that replaces the terminal,” explained Azhani.

“All payment methods in one QR, one platform. We are the first and only one to do this.”

“We make it easy for our customers as opposed to them getting a terminal from a bank, which would be time consuming and costly as well,” added Indrawathi.

Another first for PayHalal is the qard hasan, a microlending programme, which is still in the pipeline.

It’s targeted at women entrepreneurs who won’t be able to get loans from banks as their credit scores won’t permit it.

“From these women, we don’t need to collect collateral, we don’t need to have any guarantees,” said Indrawathi.

“We will give them an opportunity to start and own a business. We will give them a head start because the banks won’t.”

Clearly, financial inclusion for women is high on the agenda for PayHalal.

“The gender gap in terms of financial understanding and inclusion for women also affects them in terms of the general economic ability to earn money and income for the family,” she continued.

Women representation for fintech is also needed because research findings show they produce better results than their male counterparts.

“Because of their inclusivity and their ability to give a diverse form of opinion,” explained Indrawathi.

She added that fintech is just one segment of the financial industry that used to be very male dominated.

“But now you see women players coming in very aggressively and they are, in fact, requesting for more women, for more diversity.

Despite the headway, women-run startups continue to face the same challenges caused by lack of representation, stereotypes, lack of networking and negotiation skills.

To overcome this, Indrawati said women entrepreneurs need to find ways to network and gain visibility in the industry as well as seek out funding opportunities from sources that prioritise diversity and inclusion.

“Inclusivity is going to create a broader spectrum that’s going trickle down from the top in terms of employment, benefits and even to the basic things like work from home flexibility.”

She said the ability for women to be able to balance things out comes from the women themselves.

It comes from a global agenda to further the cause of women in the marketplace, particularly in fintech, which is even less.

“So now the opportunity for fintech has come up, we should be riding this opportunity, we should be taking it on, this is the best time to be a woman.”