What The FinTech #147 - 17 Jul 2023
🚀 Welcome to What The Fintech - your weekly dose of electrifying insights, game-changing breakthroughs, and dazzling trends from the pulse-pounding world of fintech across Hong Kong, Singapore, China, and Asia! As your go-to source for top headlines and industry insights, we're here to keep you updated on the latest innovations revolutionizing the way we think about finance and technology in this dynamic region.
Prepare to embark on a thrilling adventure through the digital landscape as we explore the ground-breaking developments, visionary startups, and trailblazing trends that are shaping the future of finance in Asia and beyond. So buckle up, grab your favorite beverage, and get ready to ignite your curiosity with the latest and greatest from the fintech universe! Let's dive in! 🌊💡💸
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What The FinTech Episode 64 - Set Sail
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What was the FinTech this week in: 📰
HONG KONG
Hong Kong Monetary Authority announces “orderly exit” from coronavirus-era loan repayment holiday for small businesses
JPMorgan Says HK Property Market Has Pool of Undervalued Assets
AXA Hong Kong and Macau team up with CoverGo
Payment Asia launches AI-powered processing service
Hong Kong Monetary Authority announces “orderly exit” from coronavirus-era loan repayment holiday for small businesses
The Hong Kong Monetary Authority (HKMA), the city‘s de facto central bank, announced an orderly exit from the loan repayment holiday for small businesses, which is set to expire at the end of July. The scheme, which began in May 2020 as a six-month measure to help firms survive the business slump resulting from the coronavirus pandemic, allowed thousands of eligible companies to defer payments of principal on corporate loans and mortgages. It has been extended six times. The scheme included the participation of around 100 banks, covering around 120,000 qualified corporate borrowers with an annual sales turnover below HK$800 million (US$103 million) and no serious overdue loans. The participation rate of the scheme declined to 1 percent of eligible companies, or 1,300 firms, between November and January, compared with 16 percent, or 19,000 participating businesses, when it was first launched three years ago.
JPMorgan Says HK Property Market Has Pool of Undervalued Assets
A ―large pool of undervalued assets‖ in Hong Kong‘s property market may spur more bargain hunting among their majority shareholders as valuations hit a 30-year low. The city‘s cash-rich property tycoons may take advantage of the cheap valuations to buy assets, conduct share buybacks or take out minority shareholders at a time when developers and landlords are on average valued at a 63% net asset value discount to the aggregate market capitalization. The sector has been grappling with tumbling Hong Kong home transactions due to higher mortgage rates and sluggish economic growth in China. A MSCI gauge tracking Hong Kong developers has lost more than 16% year-to-date, underperforming the benchmark Hang Seng Index which is down about 5%. The city‘s property sector is trading at a combined market cap of HK$1.1 trillion ($141 billion), while their aggregated net asset value amounted to HK$3 trillion, according to JPMorgan. That represents a large pool of undervalued assets that majority shareholders can choose from some families may be more active than others in taking advantage of the valuation dislocation, such as Li Ka-Shing-backed CK Asset Holdings Ltd. Other developers include Wharf Real Estate Investment Co., Kerry Properties Ltd., Swire Pacific Ltd., Swire Properties Ltd., and Henderson Land Development Co Ltd.
AXA Hong Kong and Macau team up with CoverGo
AXA Hong Kong and Macau announced its collaboration with CoverGo, the leading global no-code insurance SaaS core platform for health, life, and P&C, to improve AXA‘s general insurance ecosystem in Hong Kong. With the advanced technology supported by CoverGo, AXA will use its platform for general insurance-related products, to increase its speed to market and improve customer experience, achieving optimal efficiency. CoverGo‘s platform is modern and scalable, its API-driven approach allows easy integration into AXA’s existing system, helping AXA to set the stage for future digital transformation and improvements across different lines of business and products. AXA‘s newly launched SmartHelper Plus, a comprehensive insurance plan that provides extensive support for foreign domestic helpers, and also offers protection plans for local domestic helpers and postnatal care helpers, is the first product available on the platform.
Payment Asia launches AI-powered processing service
Payment solutions provider Payment Asia has announced the launch of an AI-powered processing service set to raise ESG standards for payment solutions in Hong Kong. The processing service seeks to promote ESG awareness, and it includes automated merchant onboarding and assignment of merchant accounts, AI customer service, and an auto accounting system. Per the press release, this marks the first time such an extensive suite of automated services is made available in Hong Kong alongside AI developments and is thought to help further merchants‘ sales. Payment Asia looks to raise ESG standards for payment solutions in Hong Kong. The AI customer service and big data will offer clients a simplified and personalized experience while helping to better the entire onboarding process, including non-face-to-face client identification and internal vetting methodology for new customers. Internally, the company stopped paper submission of expense claims and accounting, leveraging AI for automatic approval, and generating reports to all relevant departments for daily monitoring, furthering ESG and sustainability in financial services.
SINGAPORE
Finmo Eyes Singapore Launch With In-Principle Approval for Payment License
Private bankers at EFG, Bank of Singapore set big targets as Hong Kong offers „next big leap‟ in wealth management
Finmo Eyes Singapore Launch With In-Principle Approval for Payment License
Payments company Finmo announced its upcoming launch plans for Singapore after receiving the In-Principle Approval for a Major Payment Institution license from the Monetary Authority of Singapore (MAS) in March 2023. This will grant Singapore businesses access to Finmo’s comprehensive suite of global payments services, including its current product and service offerings across Asia Pacific. Headquartered in Singapore, Finmo’s existing solutions include global account issuance, domestic and cross-border money transfer at competitive rates, multi-currency wallets, and online payment acceptance through Real-Time Payment (RTP) rails. As part of Finmo’s expansion into Singapore, customers worldwide will now have the ability to receive funds locally in Singapore Dollars (SGD). Additionally, Finmo announced that the ongoing rollout will incorporate enhanced features, such as an API suite designed for technology-driven businesses that require embedded payments and financial services.
Private bankers at EFG, Bank of Singapore set big targets as Hong Kong offers „next big leap‟ in wealth management
Some global private banks are laying out big expansion plans in Hong Kong to pursue major opportunities created by the city‘s ambitions to become a hub for family offices in competition with Singapore. Bank of Singapore, the private banking arm of Oversea-Chinese Banking Corp, is seeking to boost its assets under management from US$124 billion to US$145 billion over the next three years in its key markets at home, and in Hong Kong and Dubai, its CEO Jason Moo said. Assets managed by ―non-retail individual clients‖, which include family offices, rose by S$470 billion (US$348 billion) from 2017 to 2021, the Singapore government said in May. Pedestrians crossing a busy street in Central, Hong Kong in February 2023. The Greater Bay Area, an initiative by Beijing to turn Hong Kong, Macau, and nine mainland cities in the southern Guangdong province into an economic powerhouse, offers a key advantage to Hong Kong. Family offices from the UK, Switzerland, Dubai, and other Gulf countries are either relocating or setting up satellite offices here.
CHINA
China to add support for digital yuan payments to social security cards
China unveils provisional rules for generative AI, including a licensing regime
Digital Yuan ushers in new payment method with rollout of SIM card integration
China to add support for digital yuan payments to social security cards
Chinese banks have joined a government initiative to add support for payments made using China‘s central bank digital currency (CBDC) to physical state-issued social security cards. Chinese residents can already make payments with the card — which also serves as an identity certificate and information record — across a range of use cases including urban transport and medical fees, but the country‘s Ministry of Human Resources and Social Security now plans to add a function to the card that will enable holders to opt to make payments with the digital yuan. The new forms of crowd use, such as bracelets, portable tags, etc., will expand the usage scenarios to people‘s livelihood consumption scenarios, elderly care scenarios, bill payment scenarios, transportation scenarios, and treatment-receiving scenarios, and will serve a wider range of social groups.
China unveils provisional rules for generative AI, including a licensing regime
China’s top cyberspace regulator has unveiled a set of provisional rules to govern generative AI services, including API providers, that serve China-based users. The rules require generative AI providers to adhere to core socialist values, which prohibit everything from pornography and terrorism to racism and content that threatens China’s national security. Algorithms that can influence public opinions, the rules say, must be registered with the relevant authority. Generative AI service providers should also obtain an administrative license in accordance with the law. When it comes to user protection, the rules stipulate that algorithms must not be discriminatory based on factors such as ethnicity, gender, age, occupation, or health, and should not be used for anti-competitive behavior. Service providers are encouraged to create an anti-addiction system for underage users, similar to those used in video gaming. Service providers are responsible for identifying and stopping the generative process for illegal content, and subsequently correcting the algorithms and reporting the incident to the relevant authority. Regulators also have the right to know the specifics of a generative AI model, including its training data, size, type, tagging rules and algorithms. The document is calling for the creation of a public data training platform and the sharing of computing power. Concrete rules have already been proposed in Beijing for a state-backed, centralized platform that allocates public cloud resources based on customer needs.
Digital Yuan ushers in new payment method with rollout of SIM card integration
Chinese banks and mobile carriers are teaming up to roll out a SIM card purse product embedded in the payment platform of digital yuan, or e-CNY, further expanding the application scenarios of the digital currency. Jointly developed by the Bank of China (BOC), China Telecom and China Unicom, the SIM card purse will provide a more convenient payment method for users as they only need to bring their cellphones closer to the point-of-sale machine to complete the payment process. The payment can be made even if the user's cellphone is powered off or disconnected with the internet. Yet users need to first change their current SIM cards with new super ones if they want to experience the new purse, and currently only invited users can have access to the function. It will later be promoted to other trial regions. The launch of the SIM card purse for digital yuan reflected the organic integration between the financial infrastructure and IT infrastructure.
ASIA
NBC inks deal with UnionPay to expand cross-border payment to China
India to link digital rupee to UPI payments to promote merchant adoption
Paymentology powers TrueMoney, Southeast Asia’s leading e-payment service
PhonePe launches one-stop POS solution for merchants
GHL Systems Berhad selects AFS to process merchant transactions in Thailand
Razorpay launches payment gateway in Malaysia via Curlec
Proxgy launches a sound box for UPI and CBDC payment notifications
NBC inks deal with UnionPay to expand cross-border payment to China
National Bank of Cambodia (NBC) signed a Memorandum of Understanding (MoU) with the Chinese card payment firm UnionPay International (UPI) to enable users of mobile banking services to make payments with KHQR codes of the NBC-developed Bakong system in China. Wallet users of UnionPay, WeChat Pay and AliPay can make payments at approximately 7,000 merchants with KHQR codes in Cambodia, which enable those facility owners to receive the payments in riel, while merchants in China would receive payments with KHQR codes in Yuan automatically via foreign exchange transactions. However, e-wallet users of the two countries have not been enabled to make cross-border payments between Cambodia and China through KHQR codes and QR codes of UnionPay, WeChat Pay and AliPay yet as the MoU was signed to pave ways for further technical developments for formal transactions that would be officially allowed by the end of 2023.
India to link digital rupee to UPI payments to promote merchant adoption
The Reserve Bank of India (RBI) wants to boost its daily central bank digital currency (CBDC) transactions using the country‘s existing Universal Payment Interface (UPI) infrastructure. RBI now wants to increase the daily transaction number to around 1 million by the end of the year by integrating with India‘s domestic UPI infrastructure. The target seems achievable, considering daily UPI transactions currently stand at over 300 million. However, the fast payment system could also stand in the way of increased user adoption in the same way that WeChat Pay and AliPay have in China. Many people see retail CBDCs as competing with, rather than complementing, existing payment systems. Nonetheless, the central bank is looking to leverage the platform‘s QR codes to allow vendors accepting UPI payments to accept digital rupees as well, thereby reducing concerns about the number of onboarded merchants. Banks will make QR codes interoperable and link payments to CBDC wallets when available.
Paymentology powers TrueMoney, Southeast Asia’s leading e-payment service
Paymentology, the leading global issuer-processor announces the expansion of its current partnership with TrueMoney, Southeast Asia‘s leading e-payment services and financial services provider. TrueMoney quickly became Thailand‘s leading digital financial application for all mobile carriers. In Thailand, the platform includes payment, saving, and investment services. Its payment services include TrueMoney Mastercard (previously named as WeCard), TrueMoney Cash Card, Kiosk, Payment Gateway, and Remittances. Building on TrueMoney‘s success in Thailand, and as part of its efforts to support financial inclusion in Cambodia, TrueMoney recently bolstered its offering with the launch of a cobranded virtual prepaid TrueMoney Mastercard supported by Cambodia‘s Sathapana Bank through BIN (Banking Identification Number). Powered by its global technical payments partner, Paymentology, the virtual prepaid Mastercard card is available to unbanked members in the country and is further promoting cashless transactions. Linked to the rise of cashless transactions across Southeast Asia, Mastercard‘s New Payments Index 2022 highlights that more than 94% of Thai consumers have used digital systems to pay for services, with the most used form of payment being digital wallets, Paymentology has now powered True Money to launch Google Pay with MDES Tokenization. Strengthening the alliance between TrueMoney, Paymentology, Google, and Mastercard, Google Wallet users can now add their TrueMoney Mastercard to pay with Google Pay in-store, efficiently and securely.
PhonePe launches one-stop POS solution for merchants
PhonePe announced the launch of its Point-of-sale device that enables merchants to accept payments via Debit Cards, Credit Cards and UPI. The new solution provides merchants with a simple and seamless settlement experience. The device comes preloaded with the PhonePe POS App and supports transactions through tap/swipe/dip and interoperable dynamic QR codes. The POS device, built on the Android platform, revolutionizes the checkout experience for businesses. Whether customers are at the counter, table, delivery location, or anywhere with cellular coverage, the device simplifies the entire process, elevating the customer experience. Its reliability and security are top-notch, backed by the PCI-PTS 6 certification, safeguarding both merchant and consumer data. With automatic batch closure and unified reconciliation, the device becomes a one-stop solution for hassle-free account settlement, streamlining merchant operations. The device is offered at a nominal monthly rental and comes with product quality and service from PhonePe. The PhonePe POS device includes a touchscreen display, a processor for rapid response times, long battery life, a built-in printer allowing on-the[1]spot receipts printing, along with Wi-Fi and 4G connectivity via a sim card.
GHL Systems Berhad selects AFS to process merchant transactions in Thailand
GHL Systems Berhad (GHL), a payment solutions provider has selected Arab Financial Services (AFS), a Middle East and Africa-based digital payment solutions provider to process its merchant transactions in Thailand. The strategic collaboration will bring AFS‘s payment technology solutions to support GHL‘s merchant payments processing. AFS will provide GHL with Acquiring Platform as a Service and value-added services: authorization and clearing for in-store and eCommerce transactions, dispute management, fraud prevention, and data analytics. GHL‘s merchants in Thailand will use the AFS acquirer payment processing platform, resulting in increased efficiencies, advanced security, and reliability along with enhanced user experiences.
Razorpay launches payment gateway in Malaysia via Curlec
India-based Razorpay announced that Curlec has transitioned to a full stack payment gateway for businesses. Now Curlec by Razorpay, the service allows businesses to accept payments and automate payouts. It also marks the first international launch of a payment gateway for Razorpay, which serves 10 million businesses in India. Curlec by Razorpay already has more than 700 clients in Malaysia. The fintech firm aims to reach over 5,000 businesses and hit 10 billion ringgits in annualized gross transaction value by 2025. It is also looking to generate growth off the back of Malaysia‘s digital economy, which is expected to be worth US$35 billion by 2025.
Proxgy launches a sound box for UPI and CBDC payment notifications
India-based IoT technology startup Proxgy has forayed into the fintech space by launching the AudioCube product line. AudioCube represents a multi-lingual payment alert audio mechanism that features ad network integration for merchants and retailers. The product acts as a real-time transaction settlement system irrespective of the payment gateway. In the company press release, Proxgy officials emphasized AudioCube‘s potential to improve the banking and fintech landscapes of India. The product is able to simplify the integration of payment gateway applications by consolidating multiple applications onto a single round box, thus eliminating the need for multiple sound boxes for each payment gateway. AudioCube is Bluetooth, Wi-Fi, and 4G-enabled, and it is available in 120 cities in India at the time of writing. The dust[1]resistant device supports 24 Indian languages and has multiple customization options including a dynamic QR with a LED display, a thermal printer, integration for any network, and dual screens. The battery lasts 3 days and can be charged back up via a USB Type-C connector. AudioCube supports all major payment wallets, including PayTM, PhonePE, Google Pay, and BharatPE.
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And that's it for this week's What The Fintech 🎉 We hope you've found our selection of Asia's fintech trends, innovations, and insights both informative and valuable. Your feedback and suggestions are important to us, so please share your thoughts to help us curate content that matters most to you. 🌟
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Until next week, keep exploring the future of finance together! ✨
Your Fintech Navigator,
Medhy
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