THE digital payments landscape in Singapore has a relatively new entrant that is introducing a multi-currency feature in August, while eradicating the use of credit card terminals for businesses that operate online.
HitPay, a Singapore-based fintech start-up founded in 2016, provides mobile payment solutions mainly to 250 small and medium online businesses that take their businesses offline and operate pop-up stores.
In a recent interview with SGSME, founder and chief executive Aditya Haripurkar said that HitPay will be able to process transactions in 25 to 30 currencies including the US dollar, euro and Thai Baht besides the Singapore dollar.
The feature is meant to aid businesses here going overseas, in the event that they might not be able to take a credit card terminal with them to a trade conference, for example.
The transacted foreign currency amount, however, is converted into home currency at a standard 2 per cent above the mid-market rate, on top of a 4.4 per cent plus S$0.50 transaction fee imposed by HitPay, which accepts payments made via Nets, Visa, Mastercard, American Express, and AliPay.
According to Mr Haripurkar, the 2 per cent premium is a charge that Stripe, the payment processor that HitPay is working with, imposes, and HitPay does not benefit from the conversion.
Drawing a comparison to a local bank, DBS states on its website that it charges a 2.8 per cent fee per transaction done in a foreign currency, on top of the prevailing foreign exchange rate determined by Visa or MasterCard. It is 3 per cent for American Express.
"Once we accept multiple currencies, HitPay's going to go global," Mr Haripurkar said.
Previously, the app only accepted payments in Singapore dollar. It has processed more than S$800,000 worth of transactions since it started. Merchants are required to sign up for a free account which takes about five minutes and can immediately accept payments thereafter.
"What we are learning is that customers don't like downloading apps. Singapore is very advanced in terms of cards infrastructure. Everyone above the age of 16 probably has a card on them. We realised then: how do we provide a solution to merchants where card payments will be simple and easy?" he added.
Although HitPay does not require customers to download the app to make payments, the caveat is that customers have to enter their credit card details to pay, a process that might be time consuming.
To reduce the hassle, the company is planning to launch a contactless bluetooth device by the fourth-quarter this year.
With the device, customers can simply tap their cards to pay. According to Mr Haripurkar, 10 per cent of merchants have asked him for this device that will pair with the app.
He added that HitPay doesn't store credit card information in its database, as "anything you type is encrypted and processed by Stripe".
For each successful card transaction done locally, HitPay charges a 3.4 per cent plus S$0.60 fee. It doesn't require merchants to pay any additional fees like an annual or set-up fee, or monthly recording fees.
For Alipay transactions done locally, the rate is 2.5 per cent plus S$0.35.
In comparison, a transaction fee of about 3 per cent is imposed on merchants for accepting Visa and Mastercard payments locally. Similar fees apply if merchants accept mobile wallets such as Apple Pay, Android Pay and Samsung Pay. There are also other administrative fees imposed by banks.
Mr Haripurkar said that of the 250 merchants HitPay is partnering with, about 2 per cent come from overseas markets such as Japan and Hong Kong. The rest are from Singapore.
The merchants hail from industries such as retail, and food and beverage.
Although HitPay is not profitable yet, Mr Haripurkar said that the firm is "revenue generating". The company is currently in talks with "prominent venture capitalists", and is part of an incubator program with PayPal.
In September, HitPay is looking to launch social commerce payments on platforms like Instagram that consists of the sharing of QR codes and payment links. These will support business-to-business, and business-to-consumer payments.
"Our long-term goal is to enter India, Indonesia, Thailand. These are our holy grail basically. That's because of the demographics that exist there. Businesses are increasingly mobile in these countries," Mr Haripurkar said.