Razer teams up with Singtel to link their regional e-payment systems

Singapore

GAMING tech company Razer has upped the ante in its bid to take Singapore cashless. It is now looking beyond the Republic, with all of South-east Asia sitting in its sights.

It plans to do this through a strategic partnership with Singtel, inked at Comcentre on Wednesday: the two are planning to link their regional digital payment systems.

While company executives said that they were not yet ready to share the timeline for the project, the move would give each partner access to the other's one million merchant points.

Arthur Lang, chief executive of Singtel's international group, dubbed the proposed network "the Star Alliance of wallets" - a reference to the global airline network, which counts flagship carrier Singapore Airlines among its 28 members.

Mr Lang added: "We're starting in Asean because of the complementarity we're seeing, but there's nothing stopping us from going further."

Meanwhile, Hong Kong-listed Razer's chief executive Tan Min-Liang noted: "The market over here is incredibly young. It's a very youthful market, and I'm very excited about it."

He made news last August when he suggested that he could roll out a nation-wide cashless system within 18 months. But he has now said that "at the end of the day, we think about scale" in eyeing the whole region.

"I'm way ahead of the 18-month deadline," Mr Tan told reporters on Wednesday. He added that Razer is still gunning to launch its own payments platform "some time in 2018".

He did not disclose the number of wallets his company will gain when it completes its US$61 million buyout of payments firm MOL Global - a deal which he said is on track to be closed by May 10 - but users of Razer's zGold credits numbered around four million at last count in January.

Singtel has some 50 million mobile wallet users across the group's South-east Asian affiliate telcos, including more than half a million using its Dash platform in Singapore.

Mr Tan said the acquisition of MOL, which handled more than US$1.1 billion in digital payments last year, gave Razer "instantly, overnight, a massive footprint" in the region. "We're just coming back to grow the Razer business over here," he said. "I'm excited about South-east Asia."

Both men billed the joint Razer-Singtel payments network as an answer to the fragmented digital-payments market in the region.

Associate Professor Sarah Cheah, of the National University of Singapore (NUS) Business School, said the move "will not only allow Singtel and Razer to extend their respective user bases, but also enhance the value of their credits by facilitating access to a much wider range of participating merchants".

But they will be going up against other players with a pan-Asean strategy, such as Chinese giant Alipay and ride-hailing firm Grab; the Asian Payment Network, backed by regional central banks, also shares the goal of a unified Asian e-payments ecosystem. Members include Nets, which is owned by Singapore's three local lenders.

Industry experts told The Business Times that it makes sense to hunt in the larger Asean market, but cautioned that even team-ups will not ease the market fragmentation in the near term. It is also unclear who the last man standing will be.

Shirish Jain, payments director at PwC's "Strategy&" office, said: "With regard to competitiveness, more players entering the field suggests that there is room for disruption, which typically means better economics for merchants and payers, and possibly for consumers in the long run.

"However, securing market share will take investments and patience, and some players will drop out in the long run."

But fragmentation is the current reality, he noted. "The entry of another player increases complexity."

Anthony Chiam, practice leader for service industries at market research firm J. D. Power, said watchers should give the market 12 to 18 months for the dust to settle.

"It remains to be seen how it pans out over time and whether there's consolidation under fewer players."

Chan Jia Hao, a trade and economic policy research assistant at the NUS Institute of South Asian Studies, was less upbeat on how the new network might fare.

He said: "The deal, while intensifying the current e-payment market competition in Singapore and the rest of South-east Asia, is unlikely to see a pull-through."

Consumers and businesses could "become further frustrated" over the variety of payment options, he said, adding: "On the regional level, the international MoUs appear to be first movers of cross-border e-payment, and not Razer-Singtel."

And when it comes to the private players in the fray, "there remains no intention for unification" on their parts.

The Razer-Singtel tie-up is also subject to regulatory approvals. Asked what this might look like, Razer's Mr Tan called Asean "fragmented" and said updates would come "as we work with the regulatory bodies on the ground" in each market.