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The Next Generation? ~ Meet Payment Player Tim Lee

Volume 2, 2016

By David Yu

As I interviewed QFpay Founder Tim Lee, there was a faint sound of bustling commuters in the background as he spoke with me on his mobile. I imagined him in a hoodie and jeans – the stereotypical uniform of tech entrepreneurs – on the road to somewhere important, moving fast, just like his company, and industry, is growing and evolving.

Lee tells me it was a reading of Bill Gates’ story in his senior year of college that inspired him to eventually become an entrepreneur. “I found it cool, this lifestyle seemed really fun,” he says. “But as a fresh graduate, I had no resources at all, so I decided to find a job first, to learn entrepreneurship from A to Z.” After graduating from the Chinese University of Hong Kong in 2006, he took a job in the SME (small- and medium-sized enterprise) Loans Department of Hang Seng Bank in Hong Kong. Later he took a consulting job at IBM, which sent him to China’s capital in 2009. It was there that he embarked on his new life as a “Beijing drifter”. He quit several months before his contract expired to make the leap from elite consultant to entrepreneur.

I was eager to know why a yuppie like Lee would choose to leave a secure corporate job for the uncertain path of an entrepreneur, and also curious why this Hong Kong native would choose to fight for his professional survival in Beijing instead of his hometown. The 32-year-old tech geek says the two cities both have their pros and cons. Hong Kong is more open and internationalised, the market is more mature, so it can be easier for start-ups to go abroad after having scaled up at home. However, compared to Beijing, the entrepreneurial environment in Hong Kong is less developed and people in Hong Kong seem to be culturally much more conservative about entrepreneurship. “When talking about starting a company, people in Hong Kong tend to consider traditional businesses, like running a milk tea shop, or a tutorial school.” While in Beijing, he says, “I see Silicon Valley here – the entrepreneurial atmosphere is stronger, hi-tech oriented ventures and Internet start-ups are everywhere. In Hong Kong, I would say I can count companies of this kind on one hand.” Of course this means there is more intense competition between start-ups on the mainland, and sometimes they become too eager for quick success.

After a year working with friends on a small company that focused on mobile Internet solutions, Lee launched QFpay in 2011. He realised there is a large and underserved market of SMEs and MBEs (micro-business enterprises) that regardless of their sector or business model, all need help with the same thing – managing payments. His company first rolled out its QPOS service, which provides a range of hardware and software solutions that work with all the mainstream payment channels such as Alipay, WeChat Payment and China UnionPay to make the process more efficient for both sides of a transaction. The company then added a platform called Haojin; its name translates to “nearby” in English, which adds a location component to the payment equation.

“With Haojin we are trying to build a virtual block that smartly encircles all businesses physically located within it,” Lee says. “Imagine that any business district with a radius between 500 to 1000 metres can potentially become this kind of ‘smart circle’. Through Haojin, we aim to establish efficient connections between all the businesses and consumers who use Haojin within this circle.”

The company has already set up such a smart circle at the World Trade Plaza in Beijing. Office workers there who have signed up on the Haojin WeChat App can connect to restaurants and entertainment venues in the circle. Lee says many small, offline businesses don’t have the budget or know-how to develop a comprehensive marketing plan and therefore rely on word-of-mouth to bring in customers. Many MBEs are either unqualified to open an official WeChat account, or are just not able to run it effectively. Therefore, adding Haojin to his company’s QPOS services makes its marketing solutions even more robust. Through QPOS, the company’s engineers can analyse the details of consumption data from both merchants and their customers. It crunches this Big Data to create personalised notifications that can be pushed out to consumers who have signed up to Haojin, based on their locations.

“Let’s say our client is a restaurant that wants to promote a new spicy dish. Haojin users who follow this restaurant will receive different notifications according to whether or not they have ordered other spicy dishes,” he explains. He tells me that if my office was looking to hold a team building event in a nearby restaurant, we could send a request through Haojin and get some suggestions according to our preferences for different cuisines. “It is our mission to be the ‘IBM’ behind the SMEs and MBEs, to help them make money more effectively,” he explains.

The Big Data on purchases that the company accumulates through its QPOS services is the first brick in building an unlimited number of solutions in the future, says Lee. “Having access to Big Data even allows us to do something new in finance. For example we have launched a small-scale pilot loan programme for start-up merchants who need seed money,” he says. “We still need more time and experience to create a relatively mature business plan for this; we already have some preliminary thoughts.”

This is not the company’s first attempt to leverage Big Data. QFpay targeted the female demographic in 2014 with the launch of an App called “Miaomiao Weidian” (literally “meow-meow micro-shop”), which aims to help women open and operate shops on WeChat.

Realising that he could benefit from adding theoretical knowledge to the years of practical experience he had racked up while running his business, Lee signed up for the third edition of the CEIBS Entrepreneurial Leadership Camp in 2014. “CEIBS is a big name in the business world, I had long wanted to study there, but I felt programmes like MBA and EMBA may not be the best option for entrepreneurs like me.” He said the Entrepreneurial Leadership Camp allowed him to broaden his network and learn from the experiences of other business owners.

I was curious to know how Lee saw the future of the payment business in China. In the past, 90% of all transactions were made either with cash or a bank card; but now, he says, Alipay and WeChat Payment are taking market share from traditional players and even reshaping the daily payment habits of Chinese consumers. “They are leading a payment revolution in China,” Lee says.

Still, many challenges are ahead. He believes it is not possible for QFpay to succeed over the long term if it only focuses on payment. “Payment cannot create continuously added-value for us or our clients,” he says. “Payment is just an entry point, it drives data to the company but in itself, it is not a major revenue provider. I think payment services will probably become modularised in the future. That is to say, a whole set of integrated services will be provided in addition to payment.”

What can we do with payment? What can we do with Big Data? These are questions all the payment players are considering. Lee predicts that there will probably not be a third payment giant in China after Alipay and WeChat Payment. However he thinks in the near future more vertical payment services which focus on specific commercial scenarios are likely to emerge in the market.

He is ready for whatever comes next and is even thinking about how to provide solutions for the CEIBS network. “If after reading my story any CEIBS alumni think my business model is interesting,” the payment player tells me, “please reach out and let’s see what new things we can do together.”