10 in 10 with MC Payment
10 Questions in 10 Minutes with SGX-listed companies by SGX Research
Beyond Digital Payments
MC Payment provides digital payments and commerce-enabling services, offering online-to-offline (O2O) solutions for businesses across various industries such as retail, transportation, food and beverage, charities, education and online malls. Its end-to-end payment platform offers comprehensive solutions ranging from hardware and software to data analytics and other technology-driven, value added services tailored to specific industries. The Group has a presence in four geographical markets – Singapore, Malaysia, Indonesia, and Thailand.
1. Can you tell us more about MC Payment’s business segments and its focus?
MC Payment is a one-stop solutions provider helping enterprises digitally transform their businesses, through its unified digital payments platform and other merchant value added services such as digital marketing and Buy-Now-Pay-Later. The Group has 2 main business segments:
- Merchant Payment Services (MPS) – Single point O2O solution for merchants via its unified payment platform. Its online payment processing services allows merchants to integrate their websites and mobile applications securely for customers to make payment via credit or debit cards, e-wallets or bank transfers. For in store payment, merchants can install a smart software application (Smart App) onto smart devices to accept multiple payment methods. The cloud based Smart App also allows for management of multiple point-of-sale (POS) terminals, products, customers, marketing (loyalty and reward schemes, coupons) and access real time sales data.
- Digital Commerce Enabling Solutions
(DCES) – Provision of ancillary services, such as the sale and lease of Smart POS terminals as well as both proprietary and licensed software-as-a-service (SaaS) which can be white-labelled. White-labelled offerings can be customised to suit various customers’ needs.
2. What is MC Payment’s business model like, how does the Group generate revenue?
- For our MPS segment, charges are on a transactional basis for our online payment processing services. Transaction processing fees are deducted from the monies collected from end retail customers before disbursement to merchants. Other revenue from this segment also comprises of revenue earned for authorisation, clearing, settlement, network access and other support services, which include setup fees, subscription fees and referral fees.
- For our DCES segment, revenue is generated from the sale or rental of our POS terminals and monthly subscriptions from the SaaS developed for customers.
3. Who are MC Payment’s customers?
- We have over 2,000 merchants using our merchant payment services today and are in the process of onboarding more merchant aggregators, as well as acquiring more merchants. Some of our customers include retail stores (brands include but not limited to: Zara, Watsons), food and beverages stores, and charities such as Make-A-Wish.
- We have also made recent announcements to launch payment platform services for the Islamic Religious Council of Singapore Majlis Ugama Islam Singapura (MUIS), Mosque-Madrasah-Wakaf (MMW) Shared Services, as well as Malaysia’s Educational Services Industry.
4. How has COVID-19 affected your operating conditions? What measures have you put in place to mitigate the impact?
- COVID-19 has accelerated the pace of e-commerce adoption. We believe that this has benefited the Group as we provide O2O solutions for merchants to accept both online and offline digital payments. This allows traditional businesses to be able to continue to sell their products online as an additional revenue channel aside from brick-and-mortar stores. Nonetheless, like many businesses, the Group has been affected by customers in the retail industry during the circuit breaker period with lower payment volumes seen.
- Given travel restrictions, we have not been able to establish physical market presence and build relationships with our regional counterparts. Nonetheless, we continue to strengthen our local presence in our key markets by acquiring more local merchants and deploy digital marketing and outsourcing models
5. Does the Group have a dividend policy? Are there any plans to start issuing dividends?
- The Group currently does not have a fixed dividend policy, as we are still in the expansion and growth phase and plans to reinvest into the company for further growth and market expansion.
6. What are your key geographic markets? Do you have plans to expand your geographical reach?
- Since our incorporation, MC Payment has expanded operations beyond Singapore, including Malaysia, Thailand and Indonesia. The Group has also been granted payment licenses in these overseas markets.
- The Group intends to penetrate new geographical markets across Southeast Asia, at the appropriate juncture. We will expand our geographical footprint either organically or by collaborating with suitable partners through strategic alliances, mergers and acquisitions, joint ventures and/or franchises.
7. What are the key focus areas for MC Payment in the next 2-3 years?
- Our key focus areas include:
i. Expansion of customer base – to retain existing customer base via overseas expansion and implementation of online to offline strategies. The Group also intends to attract new merchants by leveraging on our technological know how, and proven track record to further enhance our unified payment processing platform and the range of value-added services.
ii. Develop value added services and capabilities – launch new valued-added services to add to our current portfolio of core payment processing services. For example, our O2O payment platform, which started processing Buy-Now-Pay-Later transactions for retail merchants since 1 Dec 2020, has seen a steady pick-up in transaction volumes, crossing the S$500,000 mark in Feb 2021. The Group also introduced integrated payment solution for live streaming sellers on Facebook in Apr 2021.
8. Is regulation a key driver or a hurdle in this industry?
- Barrier to entries are high for the payments industry given that it is highly regulated, and time and costs are required to obtain relevant licenses to operate in various countries.
- MC Payment has been granted payment licenses from central banks in all our key markets (i.e. Singapore, Malaysia, Indonesia and Thailand). Most recently in 2020, the Group has also obtained the Major Payment Institution license from the MAS to conduct payment services comprising domestic money transfer service, cross-border money transfer service and merchant acquisition service. The Group is now one of nine companies nationwide to be awarded the license.
- We believe that being one of the few licensed payment providers with a regional presence, provides a competitive advantage to service and onboard merchants with regional operations.
9. Sustainability and ESG have increasingly been a key focus, how is the Group committed to sustainability?
- In support of our community, the Group has been helping charitable organisations collect donations digitally in a more secured, convenient and trackable manner. This in turn will reduce operational and administrative effort from the charities, while expanding their donation reach beyond globally.
10. Why should investors take a closer look at MC Payment?
- MC Payment is the first and only digital payments company listed in Singapore and serves as a proxy for investors who are looking to capitalize on the rising digital payments industry in the region.
- As a unified payment provider, MC Payment provides an integrated platform enabling merchants to run their businesses both online and offline.
- After a pivotal shift towards direct merchant acquisition in FY2017 which accelerated the merchant onboarding process, revenue has increased nearly three-folds. MC Payment achieved economies of scale and turned profitable in 1H FY2020. The Group believes that the recent listing will provide additional firepower to accelerate merchant acquisition and drive expansion plans.
10 in 10 – 10 Questions in 10 Minutes with SGX-listed companies
Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, the management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials.
This report contains factual commentary from the company’s management and is based on publicly announced information from the company.