Soft Space levels up, out to transform entire payment landscape: Page 2 of 2
By A. Asohan February 16, 2015
Enabled by the backend
All these new solutions and use cases are possible because of the backend system that Soft Space has been developing since its inception in 2012, said its director of corporate and strategy planning Chris Leong (pic).
In its early days, the company also worked hard to ensure it got EMV (Europay/ MasterCard/ Visa) approval and security certification.
“We have an advantage because of the EMV approval, and our centralised private cloud on which we can build these solutions,” said Leong.
“It’s actually very fast for us to design use cases and roll out new payment solutions from this central base,” he added.
All this technology development was done with its 60 staff, pumped up by its October 2014 acquisition of payment service provider Fasspay, out of whom more than half are developers.
“We’re still a technology company at heart,” said Leong.
Also key to its development roadmap was the approximately US$5.6-million matching grant it was awarded by the Malaysian Investment Development Authority (Mida).
The grant, under the RM1-billion Domestic Investment Strategic Fund (DISF), was used for research and development (R&D) into new products, including the alternative methods of payment it is rolling out now.
With the Mida grant, Soft Space also aims to use the enormous amount of data it has gathered with its 13 client banks to provide analytics in risk management for the credit card business.
But the ‘big thing’ for the company this year would be its Apple Pay and Samsung Pay emulation, Leong said.
“It’s not really about taking on Apple Pay, but if you look at our business strategy, it’s always been about acceptance.
“With the POS card emulation, we’re actually moving beyond payment acceptance and into the issuing of cards, so that banks can have both a virtual and physical card.
“To us, it’s a second link in terms of payments, from acceptance to issuer, and it ties in to our e-wallet strategy too,” added Leong.
“Location-based services can truly become a reality now,” he added.
Wearables will also be big this year, and the company is working on a wristband with which you can make payments, but using your phone to control the amount of spending.
Powering the digital economy, Series A
In 2012, the Government rolled out its Digital Malaysia programme, which aims to transform the nation into a fully-developed digital economy by 2020.
To do so, lead agency Multimedia Development Corporation (MDeC) identified three strategic thrusts:
- To move Malaysia from being supply- to demand-focused, or to reallocate resources to more demand-focused activities;
- Shift behaviour from being consumption- to production-centric, or to change consumer mindset so prevalent in technology use so that Malaysian individuals and businesses produce as much as they consume from digital technologies; and
- Evolve from low knowledge-add to high knowledge-add, or increasing the development of local talent in key industries to become innovators and knowledge workers.
Definitely an innovator by any definition, with its digital payments solutions, Soft Space is now enabling Malaysian businesses to embrace the digital revolution, to explore new opportunities and revenue streams.
But it is also ‘digital-enabling’ the Malaysian people, and smaller merchants who before this had very little reason to explore such technology for their more homespun businesses.
For itself, Soft Space is also now a role model for what Malaysian technology companies can do to push the nation into becoming an exporter of technology. It is already a regional company, and now there are some who believe it can be a global player too.
DealStreetAsia recently reported that Soft Space is in talks with domestic and US venture capitalists to raise a US$10-million Series A round, which Chang and Leong confirmed with DNA, adding that this may be completed by the second quarter of this year.
While US investors are keen to see Soft Space plant its flag in Silicon Valley, this may only happen in a Series B or C round, said Leong.
“[The Series A funds] will still be used to power our business in Asia, because this is where growth is,” he said.
As for now, despite its horizons having expanded beyond its initial remit, Soft Space is still very focused on its core vision: That of enabling merchants of any size, including street hawkers, to accept credit card payments.
It is strengthening its developer ecosystem, so that others can develop payment systems based on its backend.
“The other big thing for us this year is to improve the user experience,” said Leong. “To enhance and innovate to make it as simple as possible for people to use our solutions. To make the digital payments experience part of everyday life.”
[Disclosure: Soft Space began with an angel investment by media and advertising tycoon Vincent Lee, who also owns IdeaRiverRun (IRR). Last November, IRR took a substantial stake in DNA with an approximately US$300,000 investment.]
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