- Incubating startups while collaborating with universities in R&D
- 200+ F&B outlets to have digital payment capability within a year
US payments giant PayPal Inc has launched an Innovation Lab in Singapore, its first outside the United States, which will collaborate with government agencies, small and medium enterprises (SMEs), industry associations and institutes of higher learning.
The lab aims to foster innovation, research and development (R&D), entrepreneurship, talent and expertise in Singapore, the company said.
“Primarily, PayPal Innovation Lab is really about bringing together two entities – Singapore as a nation, and PayPal as a company – that have the same DNA (deoxyribonucleic acid), the same characteristics, and the same goals,” said Dr Rohan Mahadevan, chief executive officer of PayPal Pte Ltd and senior vice president of PayPal Asia Pacific.
Rohan described Singapore as a “natural staging ground” because of its innovativeness, level of education, and ease of doing business.
“It is the most educated country, one of the most innovative countries, and ranked the world’s easiest country to do business in for the past seven years,” he said at the media launch of the new lab yesterday (Aug 17).
“It’s a perfect melting-pot for ideas and innovation – given the strong support from the government, its massive talent pool backed by a world-class educational system, vibrant startup ecosystem, and diverse merchant profiles,” he added.
The lab will focus on three pillars: Productivity; innovation; and education and IT.
Rohan said that PayPal is partnering with all the universities in Singapore, working with their deans and graduate students “to ensure that we are invested in what the future of financial services looks like.
The first project the Innovation Lab will undertake be around SMEs in the food and beverage (F&B) business.
“Singapore is a known food capital, and food is something that is very close to the hearts of Singaporeans,” said Rohan.
The project will aim to improve productivity at F&B businesses, with Japanese restaurant Enbu having embedded digital payments into its business.
“What we have done and have successfully implemented at Enbu here at Suntec City Sky Garden, is seamless payment as easy as clicking on a secured link on your mobile phone,” said Rohan.
“That improves productivity, improves customer service – and it delights people.
“By this time next year, PayPal – together with some of our payment solutions partners such as TabSquare and Integral Solutions – will have provided more than 200 F&B establishments with in-store digital payment capability,” he added.
Other initiatives in the pipeline include the PayPal Business Challenge, which aims to help SMEs with their business challenges, not just payments.
“Together, with the business owners, we will tackle challenges in areas such as marketing, logistics or operations – problems that the SMEs cannot solve with their own resources and capabilities,” said Rohan.
“Each business that signs up for our challenge will receive help from a team of PayPal employees, who have dedicated a portion of their working hours to helping these businesses find a solution,” he added.
The Innovation Lab will also develop and nurture the next generation of financial technology (fintech) startups through an incubation programme.
The PayPal Incubator programme will also offer coaching and mentorship by PayPal executives and various subject matter experts; and networking opportunities with its own network and venture capital connections, according to the company.
PayPal Incubator currently has three startups on board: OnePay, Prosecure.me and InvoiceInterchange.
“They will be located, for the next nine months, in a specially designed co-working space right in PayPal Singapore’s Technology Centre,” said Rohan.
“They will be sitting side-by-side with our staff, and this gives them access to PayPal’s business and engineering resources,” he added.
Singapore is the second country in Asia Pacific to launch the incubator programme. PayPal’s Technology Center in Chennai, India, has been hosting this programme since 2013, with most of its 10 startups receiving Series A or B funding or being subsequently acquired, according to Rohan.
“We hope to replicate the same results, if not do better, in Singapore,” he said.
The Innovation Lab will also work with universities in Singapore to “nurture the next generation of fintech talent,” Rohan (pic) said.
“We want to understand what the future of authentication, purchasing and customer service will look like.
“We hope to see innovation being driven out from Singapore to the region, and perhaps the world, through intellectual property such as patents, technology demonstrators, and proofs-of-concept,” he added.
The company is collaborating with the National University of Singapore (NUS), Nanyang Technological University (NTU) and the Singapore Management University (SMU).
With NUS’ Institute of Systems Science, PayPal is working on:
- Cybernetic Tokens for authentication: Where an interdisciplinary approach of control theory, systems theory, information theory and game theory will be applied for seamless authentication; and
- Predictive analytics models based on machine learning to forecast business performance and reduce customer churn rate.
With NTU’s School of Computer Science and Engineering, it is working on:
- Contextual environment-based authentication to develop next-generation, seamless authentication that promises users a friction-less experience;
- A credit worthiness analytics engine that mines big data from non-traditional data sources such as social media, to derive credit risk and other behavioural insights to aid loan decisions;
- A lightweight digital KYC (know-your-customer) artificial intelligence to authenticate consumers’ real identities without compromising on compliance;
- Predictive fraud analytics that will use a deep learning model that uses big data mined from non-traditional data sources to predict and detect early fraud incidents; and
- Cognitive customer service that leverages the intelligence of neural networks to
understand customers’ intent and needs the moment they contact customer service.
With SMU’s School of Information Systems, PayPal is looking into:
- Blockchain for digital KYC that uses the blockchain’s ability to hold multiple forms of data (such as digital documents and customer information) to perform KYC. Research will be conducted to speed up transactions, and to give customers a secure, tamper-proof digital identity that protects their privacy as well; and
- Exploring forefront cryptography technology such as post-quantum cryptography to future-proof PayPal’s risk and security management systems.
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