Business Times – Singapore fintech aims to be payment bridge to UnionPay
Aleta chairman and CEO Ryan Gwee expects payment acceptance as well as account and card issuance to drive core operations. Other drivers include remittance, ecommerce and whitelabel solutions.
MOVE aside e-wallets. Here comes a digital payment account that will allow tourists in China to spend like the locals, without having to lug around hard cash that is barely accepted and the hassle of opening a savings account with debit facilities.
If Ryan Gwee has his way, foreigners visiting China will soon be able to make digital payments in the world's second-largest economy with a flash of their mobile phones.
Speaking to The Business Times recently, the chairman and chief executive officer of Aleta Planet said the Singapore fintech has partnered UnionPay to enable Chinese travelers to Singapore and Singaporeans visiting China to make digital payments with their mobile phones from May 1.
The tie-up is a powerful one as UnionPay represents the largest grouping of banks in China, making it the largest card payment network in the mainland, where many merchants still do not accept Visa and MasterCard. More importantly, this service is supported by the State Administration of Foreign Exchange of China to meet the relevant capital control standards in the country.
Aleta Planet will roll out its virtual commercial accounts for businesses and individuals to facilitate business-to-business (B2B) and business-to-consumer (B2C) cross-border payments in a legal, secure and dynamic platform.
This means Singaporeans and other foreigners looking to travel to China will no longer need to carry yuan in cash, which is hardly useful in cashless China, wherein 2018, 83 percent of payments were made through mobile devices, while 17 percent were non-mobile, such as via cash and bank cards, according to research firm Daxue Consulting.
Mr Gwee's Aleta Planet aims to be a payment bridge in China, where Chinese residents are used to paying for purchases by scanning QR codes embedded in their mobile apps, which is not available for foreigners. Foreigners are required to have a Chinese bank account to make digital transactions.
"To open an account, you need your passport, an address in China, and a local cell phone number. All of the security verification related to opening the account would be handled by text message. This means you must have international data roaming," Mr Gwee said, adding that this does not make sense for tourists.
"But with Aleta's virtual commercial account, the process to open an account takes only seven minutes for Singaporeans to sign up if they are registered through the MyInfo or SingPass platforms," he said. Foreigners will need to perform facial recognition and provide passport details.
The account can be funded with PayNow, a peer-to-peer funds transfer service available to retail customers of nine participating banks in Singapore.
"Today, few companies can do this. Aleta Planet, being an agile fintech, leads in this outside China to tie-up with UnionPay," Mr Gwee said.
The dream is "anyone who is dealing with China, has to go through Aleta Planet, which is a UnionPay International (UPI) Certified Principal Member".
As for millions of Chinese tourists heading overseas every year, Aleta Planet is roping in more merchants to accept payments using UnionPay QR codes from the over seven billion UnionPay cards issued globally. It also issues co-branded UnionPay commercial cards which can be used to pay any of the 41 million merchants that accept UnionPay.
Currently, Chinese tourists in Singapore mainly pay for their purchases by withdrawing cash from ATMs that accept UnionPay cards or merchants that have point-of-sale (POS) terminals that accept these cards.
"The payment world has changed. Ten years ago, it was about Chinese travelers trying to get their hands on international credit cards for spending overseas. Today, it is about overseas merchants changing their payment systems to accommodate the more digitally advanced Chinese," Mr Gwee said.
Aleta Planet has also teamed up with UnionPay's cross-border remittance service MoneyExpress to allow Chinese nationals in Singapore to remit money to China in 60 seconds. Customers can debit money from a Network for Electronic Transfers (NETS) account into a UnionPay business account. Recipients may use their UnionPay cards to withdraw money at all banks or ATM machines that accept UnionPay in China.
Mr Gwee started his career at a young age at the now-defunct Overseas Union Bank (OUB) selling insurance. He later went on to advisory, selling wealth management products at Standard Chartered Bank, where he was known as "the fixer" after he helped branches he was working at earn top banking accolades. At 32, he helped set up Asia Capital Pioneers Group, which manages funds of seven wealthy Chinese families. The fund started with US$300 million and is now worth about US$2 billion, with interests in golf courses, commercial and industrial properties in South Korea. Mr Gwee's stake is less than 30 percent today.
After three years at the fund, he had the opportunity to restart UnionPay's cross-border B2B platform, whose pilot project between China and Pakistan failed to take off. The road to success was a bumpy one, which quickly gobbled up an initial investment of US$10 million to eventually requiring "five to six times more the original estimate". But eventually, things improved.
"I realised we needed to overcome a moving target and needed to over-deliver when it comes to technology," said Mr Gwee, who hires an average of 50 programmers working out of Shenzhen, China's Silicon Valley.
"China went from cash to online very quickly, skipping offline business," said Mr Gwee, explaining that in contrast, banks in developed economies have a legacy system that is almost a century old.
Meanwhile, more developed economies are still operating in an offline era, while emerging economies like Myanmar and Vietnam, like China, went straight from cash to online.
"This is where Aleta comes in - as a bridge to that one most widely used card distributor in China, UnionPay," he said.
"For any system to be successful, it has to be ahead of the curve in terms of technology and it has to be sustainable. Most importantly, it has to be simple for clients to understand and implement.''
Aleta owns its own secured source codes, which it can easily modify to meet clients' needs. It is this agility that enabled Aleta to win over Singapore Airline's KrisShop.
Mr Gwee expects payment acceptance as well as account and card issuance to drive core operations. Other drivers include remittance, e-commerce and its white-label solutions.
"Hopefully, with digitalization, the world will become a 'little planet'."