After Android Pay launched in in Singapore in June, Apple Pay picks up its Asia strategy and was rolled out on Wednesday in Hong Kong to eligible cardholders of American Express, Visa and MasterCard.

The city is the third major market in the Asia-Pacific where the contactless mobile payment service, introduced by Apple about 20 months ago, has been launched this year following mainland China and Singapore.

There are an estimated 10,000 merchant locations in Hong Kong that accept Apple Pay, and more than 10 million in all nine major markets where the service has launched so far.

Apple Pay uses so-called near-field communications technology built into iPhones and Apple Watch to allow for contactless payment in stores, which have the contactless point-of-sale terminals to support the service.

Participating banks in the city include Standard Chartered, DBS, Hang Seng Bank, HSBC, Bank of East Asia and BOC Credit Card, a subsidiary of Bank of China (Hong Kong).

Consumers in Hong Kong are used to more familiar payment options, such as Octopus cards. Plenty of merchants are also wary of making new investments in contactless point-of-sale terminals.

Alipay, the online payments platform run by Alibaba Group affiliate Ant Financial Services, is betting on that same trend as it plans to partner with one million offline merchants over the next three years, enabling Chinese tourists to make payments abroad using its mobile wallet service.

Visa Hong Kong has published a list of local retailers offering Apple Pay here, and Mastercard Hong Kong has published a list of local retailers offering Apple Pay here.

Excerpts were taken from the SMCP on July 20. Read the full article here.

IBM launches its first blockchain innovation center


IBM plans to open a blockchain innovation center in Singapore in collaboration with the Singaporean government to digitalize the trade and finance sectors, reports ZDNet. The centre will develop applications and solutions based on blockchain, cybersecurity, and cognitive computing technologies and also engage with small to medium enterprises to create new applications and grow new markets in finance and trade.

The blockchain can translate to strong benefits throughout our entire finance ecosystem including the boosting of local tech capabilities.

As Singapore aims to become Asia’s main financial technology hub, IBM’s initiative perfectly aligns with the government’s goal. The tech company will be working with the main economic planning agency, the Singapore Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) to accelerate blockchain adoption for finance and trade.

One project, together with PSA International—one of the world’s largest container transshipment ports owned by state investor Temasek Holdings—aims to connect fintech with global trade and logistics.

Singapore is rushing to reinvent itself as Asia’s fintech hub to fend off a regulatory threat to its wealth management industry and revive a sluggish economy.

Singapore is now ahead of its long time rival, Hong Kong, but measures to cut the number of foreign workers and regulations have created a risk averse culture which is at odds with the trial and error approach of fintech startups. This remains a key obstacle in developing this sector in Singapore.

The opening of the new blockchain center will build on IBM’s work with the Linux Foundation Hyperledger Platform. At the end of 2015, IBM was among one of the tech companies to partner with the Linux Foundation to develop an enterprise grade, open-source distributed framework. This aligns with the foundation’s belief that this standard of innovation can transform the way business transactions are conducted across the world.

A version of this appeared in ZDNet on July 12. Read the full version here.

soCash, a Singapore-based fintech startup, has snatched a seed round of $400,000 to become the ‘last mile’ for banking services and ecommerce. The startup will release an app aimed to connect small shops into a scalable network for cash withdrawals as part of a product roadmap that is aimed at working with banks to extend cash distribution beyond ATMs.

The proceeds from global angel investors will fund the acceleration of their product development and expansion of their network to 1000 ‘cashpoints’ within the city-state.

In Singapore, demand for cash is growing at 9%.

“Contrary to the prevalent narrative, data from central banks show that cash usage is growing globally. Consumer preference poses an expensive challenge for banks to meet this increase in demand for cash. soCash’s platform is a superior digital alternative for efficient access to cash,” said Rekha Hari, Managing Director of soCash.

The company claimed to be at various stages of engagement with leading banks in Asia and the US to integrate the software into their digital banking platforms.

“Our business model – transaction fees and network monetization. soCash is significantly cheaper than ATM transaction, so banks pay us a transaction fee, which we share with the cashpoint. As we build our network of cashpoints across cities, we are building a last mile capability to banks and ecommerce companies, ” said Hari.

“Our pitch to banks is this. For large banks with existing ATM network, we can offload 25% of their ATM volumes, especially in residential areas. For banks betting on fully digital banking models, our pitch is to make cash ubiquitous via soCash platform rather than investing in their ATM infrastructure,” she added.

The company will be expanding the venture to either Hong Kong or Malaysia, with long-term plans to expand to India and Indonesia once they have sufficient critical mass.

A version of this appeared in Deal Street Asia on July 10. Read the full article here.

reduce foreign exchange fee

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A new service proposed by OFX, one of the world’s largest international payments businesses, will enable merchants to reduce the foreign exchange fee faced when selling on international marketplaces by 6-fold according to Forbes. The service is already running in Hong Kong and will soon be launched in Singapore and China.

One of the complexities to manage when selling across international borders is currency exchange. As a merchant, it can be a real punch in the gut when you lose money in forex and on top of that, have to pay 3-4% fees to marketplaces like Amazon and eBay to convert money back into your home currency. “Given how slim online retail margins are, this is a big deal,” says Richard Kimber, CEO of OFX.

To alleviate the pain of paying such fees to marketplaces, OFX, one of the world’s largest international payments businesses has launched a new service called OFX for Online Sellers.  Jeff Parker, Chief Enterprise Officer for OFX comments,

Exchange rates and associated fees can mean the difference between growth and stagnation for emerging merchants

When you’re ready to move the money back into your local Hong Kong account, you only pay 0.5% commissions to OFX rather than 3-4% to Amazon. There is no charge to open an online seller account and no account keeping fees. By collecting money in domestically held accounts via OFX for Online Sellers, OFX is allowing merchants to save up to 60% in exchange rates.

The service to reduce foreign exchange fees currently works for merchants who sell to or from North America, UK, Europe, Hong Kong and Australia. It will soon add Singapore and China to the list. Right now, the site is only in English but will offer multiple languages later down the road.

Parker concludes: “We’re providing the means for merchants to reach new customers across country borders.”

A version of this appeared in Forbes on July 6. Read the full article here

CIMB Thai Bank Working With Fintech Providers To Expand its SME Customer Base


CIMB Thai Bank is in talks with 10 local fintech providers about designing a trade-finance solution catering to SMEs that have exposure to the ASEAN market, reports The Nation. This is part of CIMB Group’s three year business strategy as it sees fintech “as a journey leading to new innovations and increased efficiency for the group and its business units.

The new product would help the bank expand its SME customer base, while its fintech venture would enable it to connect more closely to what the parent CIMB Group network has been doing in the fintech area.

“The bank has an open platform for fintech providers with business ideas that might meet its requirements, with any income derived to be shared amongst them,” said Phisit Sucharitsopit, executive vice president for CIMB Thai’s Transaction Banking Group.

Although no official description has been released about the somewhat metaphorical “product” expected to launch end of year, CIMB Thai expects the open platform for local fintech providers will help it increase income from transaction banking, which it hopes will grow 70-80% annually over the next three years.

CIMB Group has two fintech strategies:

  1. The partnership with Startupbootcamp FinTech, an accelerator programme for start-ups wishing to expand in the region to develop financial products and services for the group and its subsidiaries in the region.
  2. The adoption of innovative solutions to reinforce existing businesses, “unique” to CIMB Group, which believes it must adjust itself to ride the fintech trend.

The bank currently claims 2.5% of the Thai transactional-banking market, with targets to increase to 4% in three years time.

The Bank of Thailand has made CIMB Thailand an appointed cross-currency dealer for this settlement of Malaysian ringgit-baht trade under the recently launched Local Currency Settlement Framework. The central bank in Malaysia is expanding the framework to other countries in the region, in which should also benefit the Thai office in terms of fintech partnerships across ASEAN.

A version of this story appeared in The Nation on July 7. Read the full version here.

Bangkok Bank ready for Promptpay

Source: Peterojesen.wordpress

Traditional finance companies are beginning to fear the impact of the government’s PromptPay e-payment platform, as reported by The Bangkok Post.

The introduction of a new e-payment system, sponsored by the Thai government, will be a way for ecommerce businesses to overcome low credit card penetration in the country. Bangkok Bank expects transactions via its branch channel will decline more than 5% annually over the next few years due to the advent of the government’s national e-payment scheme.

Transactions through Bangkok Bank have continued to decline by 5% per year over the past few years as customers move away from the brick-and-mortar banking channel and towards the online platform.

Transactions through Bangkok Bank’s 1,000 or so branches nationwide have continued to decline by around 5% per year over the past few years as customers move away from the brick-and-mortar banking channel and towards the online platform, says Prassanee Ouiyamaphan, Executive VP of Bangkok Bank.

Currently, transactions via traditional channels represent about 30% of the total transaction rate.

PromptPay, a money transfer and payment service via the digital channel under the e-payment scheme, is scheduled to open for pre-registration today at many commercial banks, including Bangkok Bank.

Under PromptPay, people can easily and rapidly transfer money online to recipients who hold accounts at different banks, or even the same banks in cross-clearing zones, free of charge.

All transactions up to $142.44 (THB 5,000) are free; then transfers up to $855 (THB 30,000) are charged a fee of no more than $0.06 (THB 2); and transfers exceeding $2849 (THB 100,000) are charged no more than $0.28 (THB 10).

Most customers are expected to register via ATMs, followed by the digital channel. The bank’s ATM and debit cardholders total 12 million, while the bank has 9,500 ATM terminals.

Bangkok Bank allows people to sign up for PromptPay during pre-registration, which runs until July 14, via mobile banking and websites.

All banks would compete to attract consumers to use their accounts as the main account for PromptPay registration, though overlapping accounts will be unavoidable during the pre-registration period. However, accounts to be linked to mobile phones and ID cards will be verified from July 15 when official registration begins.

Bangkok Bank shares closed yesterday on the SET at $4.50 (THB 158.50), down 1%, in heavy trade worth $40 million (THB 1.46 billion).

A version of this appeared in Bangkok Post on July 1. Read the full article here