The making of a South-East Asian icon

  • Pioneered payments in the early days of the Internet
  • Planning to expand into Cambodia, Thailand and Bangladesh
The making of a South-East Asian icon

 
WHEN iPay88 Sdn Bhd, a renowned Malaysian online payment systems provider, was acquired by Japan’s NTT Data Corp, no-one was more surprised than cofounder and business development director Chong Lee Kean (pic above).
 
While acquisitions are a dime-a-dozen in the business world, this particular one was a special achievement.
 
“This kind of acquisition – and especially by a large international company – does not happen every day,” notes Lee Kean.
 
It was also a proud moment for Malaysia since iPay88, which started as a completely unknown name, has now become a business icon that is making its presence felt across South-East Asia.
 
Lee Kean hopes the story of iPay88 and its acquisition will inspire Malaysian and regional entrepreneurs and investors to see that it doesn’t matter where you come from: Anyone can be a winner.
 
Gap in the market
 
iPay88 started with very little funding but found success through the sheer determination and hard work of its founders over the years.
 
The roots of Lee Kean’s entrepreneurial journey can be traced back to the mid-1990s, when he was part of the team at English daily The Star which built The Star Online, the first online news portal in Malaysia, and amongst the first in all of Asia.
 
“I first toyed with the idea of being an entrepreneur when I was working at The Star Online. While I was there, I saw that there were ample opportunities in the Internet world, but as I had financial commitments, I was not able to move forward,” he recounts.
 
In 1999, his partners – iPay88 executive directors Chan Kok Long and Lim Kok Hing – started their own prepaid card distribution business. Both Kok Long and Kok Hing are DNA Digerati50.
 
“Back then, it was not very common for shops to sell top-up cards, so there was a bit of a gap in the market,” says Lee Kean.
 
The two original founders wanted to explore the diea of using a website to sell their product directly to customers, some of whom were prepaid users who had difficulty topping up their prepaid cards.
 
Lee Kean’s Internet experience was a perfect fit for the job, so he was brought on board.
 
Rife with challenges
 
In 2000, the trio embarked on their first business venture in e-commerce, establishing Mobile88, which sold prepaid top-up cards and created content for mobile phones through a website.
 
While things went well for the most part, they soon began to notice a rather disturbing problem.
 
“We realised many prepaid card users didn’t own credit cards and the banks only offered credit card processing online,” says Lee Kean.
 
This meant that the company could not access customers who did not have credit cards. Far from being defeated, the enterprising entrepreneurs leapt into action.
 
“Whenever a bank launched online banking services, we would make sure we were connected to them and supported that payment option,” he says.
 
After a few years, they had managed to tie up with most of the banks offering online banking.
 
Shifting perception
 
By this time, it was 2006 and there was a big shift in the market. Prepaid cards were becoming more common, profit margins started to shrink, and competition became stiffer.
 
This proved to be a tough challenge.
 
To overcome this problem, the team started studying market trends and listening to feedback.
 
“We realised that it was challenging for merchants to get online payment from banks,” says Lee Kean.
 
“To ensure we would be able to expand, we ventured into the payment gateway business as the new revenue channel for our business,” he adds.
 
After getting the green light from Bank Negara, the central bank and industry regulator, to operate payment gateway services, Lee Kean and his cofounders established iPay88.
 
“Ultimately, our business is about enabling customers to safely purchase from online websites using their bank accounts or credit cards, and for merchants to safely and easily accept any non-cash payment via the Internet,” explains Lee Kean.
 
Learning experience
 
Though they had found a niche market where they could thrive, venturing into a new area of business was full of ups and downs.
 
“It was tough in the early years. There was only a handful of merchants and businesses that really understood the Internet, websites, and e-commerce,” notes Lee Kean.
 
During that time, there was limited exposure to e-commerce, so Lee Kean remembers spending a lot of time educating and explaining their services to potential and regular customers.
 
To make matters even more complicated, consumers at the time did not feel safe making payments online.
 
“Many were paranoid about putting their credit card details online and were worried about the lack of security,” says Lee Kean.
 
“Some were worried about paying through our payment gateway system as they had never heard of us! It was tough, but it was a very good learning experience,” he adds.
 
Playing catch-up
 
Customer confidence was a significant drawback at the start but it has not been the biggest problem that iPay88 has had to contend with.
 
Lee Kean says that rapid growth and changes in technology can be huge challenges, where what was once cutting-edge can be become archaic almost overnight.
 
“The technology industry moves extremely fast. To remain relevant, you need to continually catch up with new technology and to always come up with innovative ideas,” he says. “You have to keep learning and improving yourself.”
 
Lee Kean says that the Coach and Grow Programme (CGP) has been a great channel for continual self-improvement.
 
“The most important things I learned were the methodologies used to really understand my business and position, which include planning, evaluation, survey, positioning and SWOT,” says Lee Kean, referring to the strengths, weaknesses, opportunities and threats model.
 
According to Lee Kean, iPay88 is expanding to more markets in the region this year.
 
“We are expanding to Cambodia, Thailand and Bangladesh in this year. We are also exploring a collaboration with NTT Data’s Vietnamese subsidiary, Vietunion.
 
“Apart from that, we are still monitoring other Asean (Association of South-East Asian Nations) countries on the readiness of their local markets.
 
“This year, we also marked another important milestone by launching mobile point of sale (mPOS), which allows iPay88 to embark on our offline payment journey,” he says.
 
The value of resilience
 
Despite the many struggles he has experienced in over a decade of being an entrepreneur, Lee Kean has never thought about giving up.
 
“Being an entrepreneur is what I want to do, and working on web-based applications is my passion,” he shares.
 
“I chose to be an entrepreneur because I was faced with limitations on what I could and could not do in the corporate world, which I found stifling.
 
“My personality is such that I like to explore new things, take risks, explore possibilities, and new ways of working,” he adds.
 
While he may enjoy the life of an entrepreneur, Lee Kean acknowledges that it is not for everyone.
 
“It depends on the person. Some people like to take risks, others do not,” he points out.
 
“However, I do encourage young people to try it out – regardless whether you succeed or fail, you will learn a tremendous amount.
 
“You will learn just how resilient and creative you can be when faced with uphill struggles,” he adds.
 
Discover iPay88 at www.ipay88.com.
 
The above is an excerpt from the book Startups to Scaleups published in October 2015 by Cradle Fund and Proficeo Consultants, the programme manager for Cradle’s Coach and Grow Programme. DNA will be featuring every entrepreneurial story from the book in a special commercial arrangement.
 

 
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