NTT Data acquires iPay88’s Malaysian operations
By Karamjit Singh September 7, 2015
- Offers foothold in growing online payment business in APAC
- Puts Malaysia on radar of global giants looking for acquisitions
MALAYSIAN online payment systems provider iPay88 Sdn Bhd, arguably one of the leaders in South-East Asia with a presence also in Indonesia, Singapore, Thailand, the Philippines and Vietnam, has seen its Malaysian operations acquired by Japan’s NTT Data Corp for an undisclosed amount.
One of the leading companies in Japan with almost 77,000 employees, NTT Data reported revenue of US$12.7 billion for its fiscal year ended March 2015.
According to a statement on NTT Data’s website on Sept 4, the Japanese giant is seeking to develop “synergies leading to an expansion of business in the payment field” in Malaysia and Asia Pacific.
It intends to do so utilising a combination of its IT solutions centred on its Cafis (Credit And Finance Information System) offering, with iPay88’s online payment processing systems. It is also hoping to leverage on iPay88’s strong customer base, it said.
iPay88 founders Lim Kok Hing (pic) and Chan Kok Long declined to comment on the deal or its strategic implications for their company’s regional presence. Lim, incidentally, is also an inaugural DNA Digerati50.
Malaysian Business Angels Network (MBAN) president Dr V. Sivapalan said he was not surprised at the acquisition.
“iPay88 has built a solid business over the past decade and is the leading online payment solution in Malaysia. It is also a trusted brand name in the region,” he said.
“This acquisition is a great endorsement of the technology prowess and business acumen of Malaysian entrepreneurs.
“I have always said that Malaysia has many great tech entrepreneurs and business ventures, and this acquisition proves it all over again. It can only be good for the ecosystem as it puts Malaysia on the radar of global giants looking for acquisitions in the region,” he added.
Meanwhile Malaysia Venture Capital Management Bhd (Mavcap) chief executive officer Jamaludin Bujang, said, “NTT and other large Japanese multinationals have been actively trying to widen their market base out of Japan by acquiring leading tech companies in their target markets.”
Mavcap is expecting similar acquisitions in the future, with Jamaludin (pic) positive that this will support venture capitalists’ exit strategy.
“American and European companies will follow the same strategy as well, so as not to be left out of the Asean market growth,” he said.
Indeed, NTT Data notes that making iPay88 a subsidiary opens a gateway to establishing a firm foothold in the online payment business in the Asia Pacific market where, “the growing demand for cross-border online payments between Japan and Asia Pacific, including Malaysia, is expected to accelerate increasingly.”
Prior to this, it had made a number of acquisitions in the same space. It entered Vietnam in 2011 with various payment businesses for public utilities and e-wallet services.
It entered the card business processing systems for financial institutions in Thailand in 2012, and was admitted to the Asian Payment Network (APN) as a member to create a common payment settlement platform within the Asia Pacific region in 2014.
Acquisitions aside, it is also expecting to co-create a number of leading-edge electronic payment services.
iPay88 was established in 2006 in Malaysia and subsequently expanded to Indonesia in 2008 and the Philippines in 2012.
According to its income statement for the financial year ended December 2013, revenue stood at RM3.7 million (US$870,000 at current rates) with a net profit of RM1.1 million (US$259,000).
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