Established in 2011, Red Dot Payment (RDP) is Singapore’s largest digital payment gateway, handling almost one billion dollars in online transactions across 22 countries. In this interview, CEO Randy Tan discusses how expats and support from the government have helped to build a thriving Fintech ecosystem in the city-state, and the innovations and solutions RDP can offer its wide range of clients, from young start-ups to major hotels.
What is your current assessment of the Fintech ecosystem in Singapore? How does it compete with other hubs in the world?
When Red Dot Payment first started out in 2011, there weren’t many Fintech players in the Singapore market. There were a few in the crowd-funding space, some in the payments-related space and the FX space. Today there are a lot, in sophisticated areas like bond trading. We have come quite a long way, thanks in good part to Singapore’s accommodating laws and the support of the government.
Singapore is a magnet for a lot of expats who come here to work for large financial MNCs. When they seek to venture out after five or ten years of working for a corporate, they use their contacts and knowledge to start their own Fintech firms right here, helping the local market further mature.
I visit Silicon Valley annually and I must say the Fintech scene is much more vibrant in the U.S. It’s the regulatory frameworks that hold us back in Asia. Every central bank in Asia has its own set of rules and regulations. When a company like Red Dot Payment tries to expand into different markets in the region, we have to adhere to different rules, compliance requirements, investment capitals, etc. The working relationship between a company and the prevailing authorities becomes important. The ecosystem in Singapore is thriving because the government here is very supportive.
Could you tell us more about the inception of Red Dot Payment and the role you play within the e-commerce ecosystem in Asia Pacific?
RDP has been a real advocate of going cashless. We are a Singapore company, and since 2014, we’ve grown to become the largest payment gateway here. We are trying to help create a payment ecosystem that makes payments seamless, and hopefully brings down the cost of transactions. That is the direction that we believe in and that's Red Dot Payment. We want to be THE online payment solutions provider for Southeast Asia.
What does Red Dot Payment help address?
Imagine that you run a young, two-month-old startup in the travel space. If go ask most of the Singapore banks for a merchant ID to start selling online, you’ll likely get rejected. That is a problem that Red Dot Payment would genuinely like to help solve. We have our own risk team to assess merchants, so that young doesn't mean bad. It just means that you do not have a proven track record to prove to a bank that you are a worthwhile client. We want to be your partner to help you grow, and we want to grow with you. Red Dot Payment will give you a fair rate when you are a young startup so that you have a good chance to survive, to win the race. And when you win the race, we hope that you can bring us along too.
You recently undertook your series B funding, where you raised a little over USD$5.2 million. How has this series of funding supported your growth and what are your objectives in the midterm?
Series B funding has helped us to become the largest homegrown payment gateway. Based on payment volume projections, we are close to handling a billion dollars. It’s a volume and scale business, and processing a billion dollars gives us some bragging rights. That allows us to enter new markets, meet new clients, and to announce that we are slowly but surely entering ‘the big boys club’. Our fundraising helps us grow to achieve these goals.
At the moment, we're serving merchants in 22 countries, with our offices in Singapore, Thailand and Indonesia. We want to grow our presence. We are working on expanding into two key markets, Europe and Australia. We’re also getting many queries from Africa (Nigeria, Kenya and Rwanda). We are not sure at this time if we need an office in the region but we're definitely fine to travel to and from to service important clients.
One unique proposition that RDP has is our set of hotel solutions. In 2014, we bought a company that specialized in handling hotel bookings as an internet booking engine. We incorporated that technology into our payments system, so that the frontend for clients works like a reservation engine.
This makes it familiar for hotel staff – the front desk, the credit officers, the finance teams – to use our solutions. Our solutions provide the flexibility to add discounts, and configure bookings with added pricing for breakfast or additional beds, without leaving the single system. Hotels can also try to up-sell new services – a spa treatment perhaps – and add that to the same booking for payment. These are the kind of features we're working on to set us apart from our competitors.Our investor funding helps us acquire the talent to allow us to grow as a business and sharpen our products to give us the edge.