Soft Space furthers regional ambitions with Japanese partnership

  • Collaboration will catalyse further expansion into Southeast Asian market
  • Second tie-up with leading Japanese company to tap its payment expertise


Soft Space furthers regional ambitions with Japanese partnership


MALAYSIAN mobile payment technology company Soft Space Sdn Bhd signed a memorandum of understanding with Japan-based fintech company Sumitomo Mitsui Card Company (SMCC) on Jan 13 in Kuala Lumpur.

The partnership will see SMCC introducing Soft Spaces’ innovative payment solutions to Japanese companies and local banks that are partners of Sumitomo Mitsui Financial Group.

Through this alliance, SMCC will also consider issuing a co-branded card and providing payment acceptance points to merchants in Southeast Asia. According to SMCC, it also hopes to introduce Soft Space’s solutions to the Japanese market to cater to its customer’s needs.

Soft Space CEO Chang Chew Soon (pic) sees the collaboration as a strong testament of Malaysian talent and the country’s ability to expand internationally.

Southeast Asian expansion

The fact that SMCC, which is part of a leading Japanese conglomerate, has chosen to work with a Malaysian company in its expansion into the Asean payment market certainly speaks to the capabilities of Malaysian businesses.

For Soft Space, SMCC is only the latest in a few significant business deals over the past 12 months, and its second collaboration with a leading Japanese company that aims to tap its payment expertise. In October last year, Yamato Transport (M) Sdn Bhd launched its new card payment on delivery services leveraging on Soft Space’s mobile point-of-sales (mPOS) solution. 

Yamato Malaysia is a subsidiary of Japan's largest door-to-door delivery service company Yamato Holdings Co, Ltd, which operates TA-Q-BIN courier services and is owned by the Yamato Group.

The alliance with Soft Space also involves Yamato Financial Co Ltd, the Yamato Holdings subsidiary that handles the Group’s payment operations, leveraging on Yamato Malaysia to offer payment solutions in Malaysia.

The cooperation between Yamoto Malaysia and Soft Space involves the latter installing its mPOS solution into the existing Yamato Malaysia card payment on delivery services to enhance efficiency of this payment method. The service is currently available in Peninsular Malaysia, and will subsequently extend to cover the whole country.

Soft Space’s collaboration with Yamato is something of a coup for the four-year-old Malaysian company, and can be seen as the catalyst for further Japanese collaboration. It started with Soft Space’s Joel Tay approaching the Japanese conglomerate with an offer for partnership.

In Japan, Yamato provides these payment solutions to as well as delivery services for e-commerce companies and collects a commission for each payment. This is what it wanted to do – and is now doing – in Malaysia.

“Japanese companies still have high interest in investing in Southeast Asia. We saw that Yamoto has ambitions in the region and that carrying card on delivery and cash on delivery solutions are very important to them,” says co-founder and Director of Strategy Chris Leong.

“Because of the growing trend of e-commerce in the region, Yamato sees Southeast Asia as once of the key areas to expand their operations into. For us, the whole idea was to have a Japanese client in Malaysia so that we can attract more Japanese partners or investors,” says Leong.

While not very significant in terms of revenue as yet, the partnership offers great potential for regional growth for both parties. With Malaysia already in the bag, Soft Space and Yamato are now looking to further the partnership regionally.

Yamato will soon be diversifying into Thailand; Yamato Group is actively seeking Southeast Asian development of its payment services. According to Yamato Group, as SEA’s growing internet penetration is expected to accelerate e-commerce market growth, it sees an increased demand by both merchants and consumers for diversified and safe e-commerce payment acceptance capabilities.

Yamato Holdings has already signed a partnership agreement for delivery services with a Thai company and it will be using Soft Space’s payment solution there as well. Yamato Group has said that if there is any opportunity to collaborate with Soft Space as it expands further into SEA, it will take it.

Leong explains the business model – just as in Malaysia, Yamato will use Soft Space’s solution and obtain a commission from their clients from every payment transaction.

Conquering the skies

In 2013, Air Asia started using Soft Space’s semi-online card payment solution on its Kuala Lumpur-China route to better facilitate its in-flight e-commerce offerings.

In-flight payment by card is notoriously tricky – the Internet connection is oftentimes poor and many airlines resort to offline car payment, meaning that although a customer’s card is swiped, its data is not actually verified or payment actually made until a solid Internet connection is available. This means that if the cards credit limit has been reached and the transaction cannot be completed, neither the vendor nor customer will know until much later.

Leong explains that Soft Space’s semi-online payment solution allows the system to store the card’s data temporarily while there is an Internet connection so that even if the connection abruptly terminates, the card does not need to be read again. When the connection is restored during the flight, the transaction continues. This way, if the card is rejected, the vendor and customer know almost immediately.

Soft Space’s innovative solution replaced and incumbent payment solution provider. Leong explains that building the system was no mean feat – integrating the system and obtaining the relevant approval from the Department of Civil Aviation Malaysia as well as Visa and Mastercard.

“The whole process from building the system to the end took eight to nine months,” says Leong.

One more significant action completed by Soft Space last year was its move into Taiwan. Early in the year, Soft Space signed a partnership deal with KGI Bank, one of Taiwan’s top ten financial institutions.

“It’s been really good for us. We have obtained a lot of leads through this partnership,” says Leong. “We are working on closing with our next Taiwanese bank.”

With regional plans going well, Soft Space is a good reflection of Malaysian technology companies that are of international standard and able to meet stringent global standards. It will continue to seek strategic business alliances for its further expansion.


Related stories:

7 predictions for Southeast Asia’s tech scene in 2017

Cards vs cash: Big boys vs the little guys

Fintech folks, take a chill pill, please


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