From non-banking cross-border transactions in real-time to data storage, Hong Kong’s innovators are breaking new ground along the Digital Silk Road with one tech-savvy local company finding success with instant payments.
One of the most significant achievements of the Digital Silk Road is the rise of cross-border transactions in real-time – after all, trade, commerce and infrastructure rely on timely payments.
Many regional and global banks are already working with instant cross-border payment platforms but those in the non-banking sector – individuals and MSMEs (micro, small and medium enterprises) – do not necessarily have access to banking platforms, and are therefore at a disadvantage when it comes to global money transfers.
A dynamic Hong Kong company, the TNG FinTech Group (TNG) is making a name for itself for its innovative mobile e-wallet that specifically caters to the non-banking sector.
The company delivers funds in multiple currencies and across borders instantly, at fraction of the cost of bank fees. Now it has moved to a new stage, having recently applied for a virtual bank license with the Hong Kong Monetary Authority (HKMA) to further expand its range of transfer, exchange and payment services it offers.
Meeting needs
TNG’s e-wallet by-passes the need for ATMs and bank branches. “The key point is we operate in real-time. We are providing financial inclusion to individuals and MSME financial services to the unbanked,” says TNG’s Founder and Chairman Alex Kong. “TNG aims for frictionless global money transfer – right now that’s an area where there’s a lot of friction.”
Alex Kong, TNG Fintech Group
He says more than half of the countries along the Belt and Road have some sort of capital controls and many people in those locales do not have bank accounts. For instance, 70% of Vietnam’s population does not have a basic bank account and more than one billion people in Asia remain unbanked. TNG’s e-wallet currently services customers in 14 Belt and Road countries.
Hong Kong and beyond
Launched in late 2015, TNG’s e-wallet operates 24/7 from 400,000 locations worldwide. Hong Kong’s close to 400,000 foreign domestic helpers are early adopters of its e-wallet services and the company now claims to have a 70% share of this market. The mobile instant payment service includes cross-platform instant messaging and mobile calls and it is also able to connect to any bank worldwide.
Kong says signing up via a mobile phone is easy, but security is important. Users of TNG’s services are required to undergo three layers of the Know Your Customer (KYC) security process.
Having now moved beyond cross-border money transfers, TNG also functions as an e-money infrastructure provider (e.g. Transferwise) and recently acquired Malaysian payment firm Tranglo.
As a fintech provider, the company offers software that enables customers to join a Global Ewallet Alliance that includes PhiliPurse (the Philippines), INDompet (Indonesia), XIN Wallet (Singapore), Sehati Wallet (Malaysia), WalleTHAI (Thailand), Vina Wallet (Vietnam), Asan Wallet (India), Sinha Wallet (Sri Lanka), Walle TAKA (Bangladesh), NewaLETA (Nepal) and WalletPAK (Pakistan).
Since the product was launched last year, 30 companies and the largest bank in the Philippines, Banco de Oro, have also signed up with TNG.
Speaking from experience
Kong says being based in Hong Kong provides a number of natural advantages.
He points out that a licence to operate here adds to global credibility with regulators. “Hong Kong’s good financial framework, regulations and legal system makes it very clear about what you can and cannot do and control. Management and compliance are very strict. This gives no room for mistakes and better consumer protection. Being a global financial centre also makes it easier for us to hire financial talent – although its more expensive here than in other places.”
But he says newcomers to this space need to be aware they are entering a highly competitive market, which offers limited prospects for new operators providing the same service.
“If you are offering different services, then there is a lot of room to establish yourself, as Hong Kong is probably the freest financial centre in the world. Once you are here you can work with different financial services on the open application programming interfaces. In the very near future people won’t need to conduct banking at a branch or the bank’s online platform. They can carry out their banking transactions through a third party. This is where others can seize their opportunity. Hong Kong is competitive but it’s also open to opportunities for those who can see them,” Kong says.
