After working for almost two decades developing banking technology for some of the biggest banks in the world, including Standard Chartered and JPMorgan, Chi Kit Law felt there were several things a startup fintech company could do much better.
Developing products to make it easier for small business in his Hong Kong homeland to carry out cross-border payment solutions with Asia Pacific (APAC) and Greater China, he could easily see how rolling this product out to all the businesses that currently deal with APAC and Greater China might prove incredibly popular.
“The big banks are very powerful and very good at what they do – and without them we can't do business.
“But because they are big, they work cautiously and they haven’t moved any further to the SME business. Due to all the competition, they don't want any failures of their projects, so they don't want to push something new to the market,” says Law, who is known in English-speaking business circles as Michael Law.
Regal Crown Technology Limited (RCT) was founded in 2013 to develop digital payment solutions for SMEs. In 2021 its 100% holding company, RC365 Holding PLC (LSE:RCGH), completed an initial public offer in London to raise funds and the profile of the business.
Roughly £2mln was drummed up for the group at a price of 6.2p per share, giving a market capitalisation of £6.7mln.
RCT’s main area of focus is its payment gateway solution for SMEs and individuals, allowing cross border payment services, and it is in the process of being developed into the RC Wallet 2.0, which will add a variety of digital currency, payments, cards and virtual banking services.
“As I worked for many different banks, I have a good understanding of their cash management services, the payment solutions, how they earn money from merchants and I thought it was kind of unavoidable,” says Law, whose work at Standard Chartered included building their cash management systems and while at Singapore’s DBS Bank he was assistant vice president of group technology and operations.
Having first developed a mobile point-of-sale or mPOS device in 2014, allowing merchants such as shop and hospitality owners in Hong Kong to get around the slow telephone-line connections provided by the banks, RCT then built what it called its online payment gateway, allowing the merchants’ customers to pay via online and also pay by their mobile phones.
Merchants outside of China found it difficult to transact with counterparties in the People’s Republic as they were unable or reluctant to open accounts with all of the payment services that are exclusively used there, such as AliPay, WeChat Pay and UnionPay.
RCT's online payments gateway is designed to allow a company or individual in Hong Kong, Singapore, UK and Europe to pay for goods or services through their Visa account while the Chinese supplier receives payment through their UnionPay card or Chinese account by using an official cross-border solution.
As Law puts it: “We take the whole big picture of all the banks and payment gateway companies and we tailor it to one smart solution for the merchants.”
At the time of the IPO, the company said it was just approaching an important pivot point as it worked on a major upgrade in the software development, as well as developing the ‘RC wallet 2.0’ and bringing the solution to Europe to allow merchants and consumers to access Asian, and particularly Chinese, counterparties as well as adding further fintech flourishes such as being able to provide e-marketing and promotions services.
“Before the IPO we were only a solution provider, so we made the software and we didn’t have a licence to onboard the merchants – the merchant funds are not going in and out of our company. But with RC Wallet 2.0 that will change,” explains Law.
“With licence support in Hong Kong, UK, Singapore, New Zealand soon we will not just be a solution provider, so it will be clear to the world how much transactions our company is doing.
“And we can upgrade our payment gateway with 2.0 functionality, which means we will be able to do cards business, virtual bank business, online payment business and mPOS business.
“Merchants will also be able to use the wallet to do payrolls or business travellers can use it as a payment card overseas, saving on the interchange rate from the banks and card organisation each time.”
Law says the licences are secured in Hong Kong and the UK but not yet in Singapore. While it may take a bit longer in Singapore, “it is a key Asia hub and it will allow us to get a digital money licence”, a cryptocurrency permit in other words, “so it is something that is really important”.
The group is also in talks with UK and European merchants, banks and other financial services companies about introducing the 2.0 payment gateway solution, he says.
To win new business, Law says RCT will offer a model that was popular with its SME customers in Hong Kong, ‘use now, pay later’.
Other services that RCT has developed include CatchAR, a proprietary mobile application aimed at providing certain consumer facing businesses a platform to promote their services and branding through using i-Beacon and augmented reality (AR) technologies, as well as capturing customer data for promotional purposes.
“It’s just an app that we developed for merchants, so customers play a mini game when they come into the shop or cafe, just like the Pokémon concept, and once they get sufficient icons or points they can get a prize like a cup of coffee, a bottle of wine or something like that,” says Law.
CatchAR was soft launched in Hong Kong in September 2021 and at the time of the IPO had eight clients using it, with both consumers and merchants needing to use RC's payment gateway solutions in order to benefit from these coupon and discount redemptions, driving uptake of the wallet.
Another service that RCT has developed also has a dual role.
Maid Maid Matching is a peer-to-peer platform that will be launched in late 2022, to allow maids and other domestic household staff in Hong Kong to find employers online without having to go through agents, who generally charge a sizeable fee to both sides.
“I have two maids, and the agents charge each side around £2,000, which is about five months salary of a maid,” says Law. “Hong Kong has more than 300,000 Filipino maids, so this could be a huge market.”
Once the necessary licences have been obtained, Law says the first phase will be getting initial maids to sign up and enter their employment records and names of references, and potential employers to use it, with the eventual aim being that the platform will allow employers to pay the maid's salary online using the RCT payment gateway.
“And for the maids they get access to a payment card for banking services and also for sending payments back to the Philippines to their family – my maids have been asking for better ways to do this for a long time,” says Law.
“This is not a core business for us, but it is another way that we indirectly get customers to use the RC wallet and it is a useful service for both sides.”
Like his maids, Law looks to have a busy time ahead but if he achieves his aims, all sides should benefit.