How Persistence Wins – A Heartwarming Story of Soft Space. In Conversation with Joel Tay

Soft Space is a company founded in 2012 as a mobile point of sale company playing in the acquiring space. Armed with disruptive fin-tech, excitement levels were high, but during the first 2 years the needle failed to move.

Strong belief in self and persistent efforts later, today the company is making its presence felt in 20 financial institutions over 10 countries.

In conversation with Joel, the Chief Business Officer of Soft Space.

Sapan: Talk to me a little bit about the launch of the company and initial struggles you would have had to go through?

Joel: Back in 2012, Malaysia was not ready. When we first started, the first 2 years were very difficult. We were going to disrupt a space that was traditionally very conservative with very established players, well established networks between vendors and bankers.

Payments being a very secure space, with our tech we were able to demonstrate that we fulfilled all the basic security requirements that are available in standard EDC (electronic data capture) terminals – point to point encryption, SSL etc – it is like ticking all the checkboxes. We then went on to demonstrate what else can our tech do to open new markets for the banks instead of cannibalising the existing ones. To us, this was a winning preposition to the banks.

Around the same time while we were spending considerable amount of time connecting, discussing and educating the bankers, in parallel, 2013 was also the year that saw the emergence of mobile apps in the country. Some of these apps also started to try and creep into the banking space, and we hoped that this will help us open the market up for ourselves and will lead to more receptive industry for a tech like ours.

However, back then, bankers did not fully understand the tech and the risks associated with using the tech. Besides why challenge the BAU that was already tested and proven over the years. Except the bigger banks, most banks in the country were concerned about franchise risk, they were concerned about doing things differently and exposing themselves to unnecessary risk.

Those were very difficult years with no light at the end of the tunnel. What do you do when you have worked so hard to develop a tech that you strongly believe will disrupt the BAU and you fail to sell it to the industry for 2 long years?

Not giving up, we started to look outside of Malaysia and realised Thailand is unique in the lot of ways. Being one of the most populous countries in SE Asia, competition is intense in the country and banks and financial institutions were realising that the most effective way to compete was not price but innovation.

We approached K-Bank (Kasikorn Bank) in Thailand. They were very receptive and hungry as they were caught in the fin-tech wave 4 years ago. Once K-Bank was on board the journey started to ease out.

Rest is history

Sapan: Where are you today as a company?

Joel: Today we operate in 10 countries and we have integrated with 20 banks and financial institutions in these countries across the region.

We have made significant progress and we are well known to be one of the mPOS leaders in the market

We have now moved to payments in general including eCommerce, mobile wallets etc. We have moved from building technologies for the acquiring space to the issuing space.

In terms of tech we no longer brand ourselves as a mPOS company but as a payments innovator.

Today we have a staff strength of over 60 people which is likely to double by the end of this year to meet the growing demands from countries like Thailand, Indonesia and Taiwan.

Sapan: Tell me more about how does the tech work?

Joel: We started off with mPOS (mobile point of sale). What we wanted to do was to harness the processing power of the mobile device. This was a win win both from a cost perspective as well as ubiquity since this way banks could bring the card payments to smaller merchants.

However, we had some initial challenges with tech to make it work for everyone. Unlike today, 2012 had a fragmentation of mobile devices – iOS and Android. Apple back then had a 30 pin connector while Android devices had mini USB that later evolved into micro USB.

Our challenge was to find the most cost effective way to link to these devices. While we were figuring this out Apple changed 30 pin to lighting connect. We realised this was a constantly changing space and we needed something that was more sustainable so we adopted audio jack. With this approach we could power up the device on both platforms.

One other unique selling proposition of ours is the way we process card payments, traditionally payment cards are processed via an onboard kernel in an EDC terminal which is tamper proof. However, processing payment cards on the smart phone is not so straightforward as any software can be installed and program to steal card data. Our approach is to process the payment cards via a centralised server, reducing the dependency on the mobile platform and allowing us to be nimble enough innovate faster cross platform.

Today we have moved into the blue tooth standard with a pin pack and we have already introduced stand alone devices that do not need to be paired to mobile devices, reducing reliance on mobile devices altogether.

Sapan: Do you have competition? How vulnerable are you to the risk of someone replicating the tech?

Joel: As far as competition is concerned there is only one more company that is playing in the space similar to ours but not in Asia.

To answer the second part of your question we are not worried about tech replication being a risk. The reason I say this is because the key to success in this industry is not just tech but the whole package that includes deep know how of the local market and local conditions.

Payments is unique and every market would have their local payment standards and we thrived by building technologies that meets both international standards and local standards.

Risks in regions for example EU are different than those in Asia and so is the approach of the banks and the merchants to address those risks. Our understanding of this market is the strongest barrier to entry for any new player today.

Sapan: Your future plans, are you planning to go global from here?

Joel: Asia is at a growth stage and this is the market to be in. Markets in SE Asia in particular, markets such as Vietnam, Indonesia, Thailand are the markets to go in and grab market share at this stage and this is where we are focussed right now.

For the immediate future, there is so much more to do in Asia and that’s where we want to be.

That was Joel narrating how things changed for Soft Space while they were putting their shoulder to the wheel.

Joel will be part of a panel discussion at Growth Innovation and Leadership (GIL) Congress in Malaysia by Frost & Sullivan on the 13th of April 2017. Do signup for the event and get an opportunity to meet and hear from them in person and feel inspired.


Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830

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