By Chee Jo-Ey
THE way we pay for goods and services has evolved by leaps and bounds thanks to the digital revolution. Unsurprisingly, Malaysians’ preferred choices of making payment are reportedly debit cards and online payments.
Malaysia has seen a tremendous shift from cash to digital payment methods as more consumers choose to shop online.
High smartphone penetration and an appetite for overseas purchases have contributed to the growth.
Cash is no longer king and soon, we may not even have to use physical cards to make payments.
There is demand for more advanced payment methods and this has caught the eye of a local entrepreneur.
Infinitium Holdings Sdn Bhd CEO Ho Ching Wee had always believed that technology holds the key to the future of payments, even though the internet was just at a nascent stage when he started his technology company.
The company provides solutions ranging from internet and mobile applications and payment services to security services.
Evolution of a tech company
Ho describes himself as an ‘accidental entrepreneur.’ It was not part of his initial plan to start and run a technology company. In fact, his background is not even in IT. He had graduated from the University of Iowa in the US in corporate finance and marketing.
But as fate would have it, his return to Malaysia in 1995 coincided with the build-up to the 1997-1998 Asian financial crisis that rocked world markets.
“I had a hard time finding a job back then,” he says.
“It was not the best time to be searching for a job as a corporate finance graduate.”
He therefore fell back on technology, which has always been a passion of his, and started Infinitium in 1997 when the internet was still at an early stage in his university days in the US.
“There was no Yahoo, Google,” he explains.
Infinitium began by providing web services to businesses that were interested in creating an online presence.
But we know how the story goes. Most of us have access to the internet these days and it touches almost every aspect of our lives.
Naturally, the company’s business model has evolved as well.
He explains how clients’ demands have shifted from just to create and maintain websites to more focused solutions like the setting up of online payment systems.
In the late 90s, the idea of paying online for services or goods was very new. The company eventually decided to specialise in online payment solutions.
On average, the company processes about 18 million authentications every month on behalf of banks the world over.
If today you were to use your credit cards to shop online, you will receive a one-time password (OTP) as part of the payment process.
“We deliver, generate and authenticate the OTP on behalf of the banks,” he explains.
OTP is randomly generated and sent to your mobile phone number registered to your account for validation of the transaction made.
This is to provide an enhanced level of security on card transactions. The OTP message is sent within two minutes.
Infinitium’s revenue growth in the past five years has been close to 30% year-on-year on average. The boom in e-commerce definitely helps.
“About 70% of our revenue today can be attributed to banks. Every time the cardholder uses the card to shop online, we indirectly generate revenue,” Ho explains.
Future of payment methods
Payment is something every business and industry needs, so Ho has chosen to tap into its potential and focus on providing payment solutions.
“The banking industry is highly regulated. We need to build a lot of trust. We had our first break with then Southern Bank.
“We were contracted to provide payment solutions for the financial institution,” he relates.
“We had to overcome a lot of hurdles in the beginning and we learnt that building a payment solution for a bank is not so straightforward.
“We need to make sure to secure the transaction and protect it from external threat as well as internal fraud.
“Every solution we provide has to comply with five global standards – Payment Card Industry Data Security Standard (PCI DSS) Level 1, PCI 3DS Security Standard, Europay, MasterCard and Visa (EMV)Co ’s framework, global card schemes(MasterCard, Visa and Amex) , central banks of various countries and the bank’s internal requirements.”
The company’s portfolio has now grown to more than 50 banks across the region.
“As for future plans, we’re planning to look at IoT (Internet of Things) payments,” Ho says.
IOT is expanding the universe of interoperable devices and is making payments possible in everything from connected cars and wearables to smart homes and cities.
To make IoT payments work, the account number on your plastic card is turned into a digital credential that can be “provisioned” via SDK (Software Development Kits) into any type of internet-connected device. This is called tokenisation.
It was recently announced that users subscribing to online payment service Amazon Pay will soon be able to settle utility bills through Alexa, the Amazon device that uses speech recognition to perform an ever-growing range of tasks on command.
