Lelde Smits: TTG Fintech Limited
(ASX:TUP) is an information technology services company. The Company provides financial authentication and e-commerce transactions processing for Chinese portals. TTG acts as a bridge between the portals and the internet, facilitating merchants to provide goods and services in China. I’m Lelde Smits and joining me at ASX Investor Series in Sydney is the Company’s Chairman, Chris Ryan. Chris welcome.
Chris Ryan: My pleasure to be here Lelde.
Lelde Smits: TTG has an established presence in China. What are some of the Company’s major partnerships?
Chris Ryan: I’m pleased you asked that question. There are significant partners in TTG’s world, their financial electronic authentication which is its main business arm. It starts from the top down and so therefore, our main partners in our business are China UnionPay which is a division of the People’s Bank of China. Below that but not necessarily less important are mobile phone carriers. So companies like China Mobile, who everyone will have heard ofis a major partner of TTG.
Thereunder are some major banks, so that would be banks like ICBC and the Bank of China.In the social media side, WeChat that most people will have heard of is a major partner. In the e-commerce side it will be AliPay and once again, quite a familiar name. Fifthly, we would have the State-owned enterprises and major corporations who become our merchants.
Lelde Smits: What progress have you made in boosting the number of registered users on the platform, and what are your plans to attract more users?
Chris Ryan: I think that it’s partly been done by ourselves and partly done by regulations. So that the part that we’ve played in expanding our registered users that we deem most to be merchants. So we deal at the merchant level, not the level below that with consumers themselves. The consumers are marketed to by our merchants, so therefore that doesn’t become our expense. How we’re increasing the number of merchants is to increase our offering type to them.
So T-linx is one for example, which is a cloud based platform. So that a merchant having a Smart POS machine, which we’ve now developed as well, can offer many other services that they couldn’t previously to their consumers. And it would be in new technologies that we’ve developed.
Lelde Smits: Infrastructure is a big focus for TTG. How has the Company’s research and development evolved, and what are you focused on now?
Chris Ryan: For the first three years of TTG’s life, it was a requirement that the infrastructure for our ULPOS platform, which is the main platform to which a consumer will register their China UnionPay card, was being developed. So therefore, if you have a card and every Chinese person does, you can access things like loyalty programs, rebates, discounts, which are highly attractive to you.
We have continued to develop that side, but also we needed to improve the POS machines themselves in China. And they were, without putting in colloquial, dumb machines, now they’re smart machines. What a smart machine can do is collect data from merchants and also give consumers a much higher level of service, through things like near field communication, like technology, audio technology.
Lelde Smits: What do you believe is unique about the way that TTG does business in China?
Chris Ryan: I think and my Chinese fellow directors tell me this, because I’m not a Chinese expert per se. But they say that most corporations in China that come into a new industry, which we are, tend to try and dominate that industry by putting their name out. We don’t do that, we work in partnership with the partners that I mentioned at the start, but we operate with inside their businesses. So we are like an ARM (Holdings) in the UK or an Intel in the United States, you don’t necessarily see us.
One of the major regulatory changes, there has been one 18 months ago where non-bankcard providers and I’ll choose AliPay for the sake of an example, must now if there are transactions of 5,000RMB or more on a particular transaction, or if a consumer spends more than 10,000RMB in aggregate per month, those transactions must come through a government approved platform. And there is one and it’s called ULPOS, and it’s owned by TTG in 50 per cent partnership with China UnionPay. We see that as quite an incredible door for us to go through to improve our revenue.
Lelde Smits: Finally Chris. With your expansion in China now in full swing, what milestones will TTG be aiming to reach this year?
Chris Ryan: Continuing to expand but also globally, but I think importantly now we need to put runs on the board. So it took three years to build the infrastructure. During that time there was only minimal revenue, because the merchants were only paying on a years’ or acceptance testing basis, it wasn’t on a commercial basis. So now our revenue model is going to kick in completely. And we want to see the revenue that we gain from, not only just providing services to merchants coming through, but also the transactions themselves. We pick up a commission on each transaction and so therefore, I think we’ll see a marked difference in TTG’s financial performance in calendar 2015.
Lelde Smits: Chris Ryan, thank you for the update from TTG Fintech.
Chris Ryan: It’s my pleasure Lelde.
