The rise of e-commerce and partnerships to pave the way for growth
AFTER Ho Ching Wee graduated with a degree in business administration, the financial crisis in the late 1990s made the task of finding a job a rather tall order.
On hindsight, though, Ho considers it a blessing in disguise.
Instead of building a career in finance, as was his original plan, he ended up working for an Internet Service Provider.
Back then, the World Wide Web was still in its early days and opportunity came a-calling.
Not long after, he decided to start his own business and founded e-payments and security solutions provider Infinitium Group in 1997.
“When I started this entity, we were doing a lot of Internet related services, from hosting email to teaching people how to connect to the Internet. Then, we started to build websites.
“In 1999, we noticed that whichever company it was that needed to build a website to sell things online, they always need the payment last-mile. That was when we started to get very focused on the payments part and went into payment gateways,” he shares.
Ho recalls that payments for online purchases back then were rudimentary. If you wanted to buy something online, you only needed to key in the 16-digit number on the card and the expiry date of the card and the transaction would have gone through with no issues.
There was no authentication method for the transaction or no security to shout about, says Ho.
“So we started developing solutions for the payment space and we have innovated from there,” he says.
According to Ho, Infinitium was one of the first few to develop and deploy the 3-D secure one-time-password (OTP) authentication solution in Malaysia.
Its early move into the market has, today, garnered the company a network of 47 banks across the region which are currently using its solutions to do online payment authentications.
This puts Infinitium in touch with a base of 180 million cardholders, including prepaid, debit and credit cardholders.
“We are the ones who generate, deliver and authenticate the OTP on behalf of the banks and complete the transactions for them,” he says.
Growth in partnerships
Infinitium made its first foray overseas in 2008 to Indonesia, and then to Singapore two years later. It is also currently present in Thailand, Philippines, Vietnam, Cambodia, and more recently, in India and Sri Lanka.
While the company has been growing in these markets over the years, Ho notes that its recent tie-ups with other partners will pave the way for the company to grow even further in the region.
One of its key partnerships is with PT Artajasa Pembayaran Elektronis (Artajasa), the operator of ATM Bersama in Indonesia.
Infinitium already has some 21 banks in Indonesia under its portfolio. Most of these, are main banks that issue credit cards like American Express, Visa and Mastercard.
However, Ho says there are another 85 banks in Indonesia that do not issue any of the branded cards. Instead, they are using their own proprietary cards which can only be used at their ATM machines.
“We are creating a new system called B-secure for this partnership, where we are doing domestic authentication. So even those cards that are not branded will be able to participate in e-commerce. So, in that sense, some of these cards have been elevated.
“These are mainly rural banks or second-tier banks. This will also allow customers from these 85 banks to also buy online. That initiative was started in 2016 and we are in the pilot phase now,” he says.
This year, Infinitium also partnered with US-based Euronet to bring its solutions to banks in India and with Korea’s Raonsecure to incorporate biometric authentication into its payment authentication solutions.
Ho says the growing mobile penetration gives them the opportunity to transform how service providers authenticate the cardholder.
“If we look at the history of payment authentication, we started with the single-factor authentication. Banks will ask you a security question like what’s your mother’s name, your pet’s name and so on. The single-factor authentication is based on what you know. But what you know no longer matters because of the information that we can get from social media.
“So about seven years ago, banks moved to the two-factor authentication – the first factor based on what you know and the second factor on what you have. In this case, what you have is your mobile phone. That’s why we send your OTP to the mobile phone, to make sure that we verify the identity of the holder,” he explains.
But with the advancements in smartphones, there is now a possibility to do a multi-factor authentication – the third factor being based on who you are. This can be verified with biometric authentication such as fingerprints, facial recognition, retina scans and voice recognition.
Following its partnership with Raonsecure, Infinitium will be adopting Raonsecure’s Fast Identity Online-certified biometric authentication platform into its electronic payment offerings that are already deployed in the current markets.
“We are hoping that with more partnerships, we will be able to go into more markets for Infinitium to become a regional player in Asia, not just Asean,” he says.
At the moment, Infinitium’s workforce comprise over 100 staff across different markets.
The company has been enjoying growth of about 30% year-on-year (y-o-y) over the last five years. And with the development of new technologies and growth of e-commerce, Ho believes Infinitium will continue to see such growth for the next five years.
While some markets, which are more matured, will see slower growth, others like Indonesia could potentially grow 80%-100% y-o-y.
“Our forecast is based on our existing customers’ organic growth. We grow with the customers. As cardholders move more and more to purchase online, we’ll see revenue growth. If we were to add in India, our growth rate will definitely exceed what we are doing today.
“So one part of it will be from organic growth, the other part will come as we expand our reach to more banks,” he adds.
Infinitium is also looking to expand into other industries such as telco, insurance and utility, whereby companies are required to store sensitive customer data and will need to protect the data against external and internal attacks.
Currently, the banking industry contributes about 70% to its revenue and while Infinitium is looking at growth opportunities outside the banking industry, Ho is comfortable with the fact that banking makes up the bulk of its turnover.
After all, he says, it has taken the company a lot of effort to grow in this space and it should continue riding on its expertise in this area.
Infinitium will also be expanding its offerings to include more contactless payment methods whereby consumers will not need to swipe their credit cards to make payments such as with tap-and-pay and scan-and-pay.
Ho is confident that these new methods of payment will pick up over the next few years as more people convert to cashless payments and he emphasises that potential for growth is still tremendous.
“Within the region, there is still a large chunk of cash payment. This includes smaller merchants like your mom-and-pop shops, pasar malam, taxi drivers and whatnots. They are still cash-based.
“Some of the technologies we are developing is to address this segment. Banks will play a certain role to deploy these technologies and we have to equip the banks to play this role. But at the end of the day, whether these technologies grow or not is still dependent on consumers’ preference. In Malaysia, it remains to be seen how this will play out.
“We believe consumers will always want something more convenient for them to pay with. So on one hand, we are striving to bring in new technology which is meeting the market needs which is convenience. On the other hand, banks are looking for new technology that is secure. So we have to balance that,” he says.
Does Ho, himself, use a lot of these contactless technology that is deployed into the market?
“Do I use it? I do because I am the tech provider. But honestly, if you ask me, I still prefer swiping my card,” he laughs.