| So Yeong Park
CEO of PayGate
Chairperson of Fintech Forum Korea
A CEO of PayGate Co., Ltd, Soyeong Park said “We have to learn from Luxembourg where it draws labor force and companies.”
The evaluation of internet bank should go to customers who had access on the service. It means there should a financial ecosystem where it optional for customers to choose internet bank or not. Unlike Korea where internet bank is depicted as an authority or a concept of business of vested interests that is granted, Europe’s many countries use the internet bank as a service. When those Fintech businesses that are licensed with e-commerce the payment service would start providing banking services so they are defined as banking corporations.
The concept of banking service in Europe is certainly different from Korea where only limited numbers of institute is granted with banking license. The customer’s oriented environment has to be provided rather than “bank” stands as a dominant license granted from financial authorities. If the environment is rendered then we can expect small internet banks with various services rather than just an internet bank with great capital.
“Survival of the fittest” will harm the variety of business nature. We will have to learn it from Europe. Many developed countries did not only prefer the biggest company. They have cultures that consider second and third place as various aspects. It is because individuals have different roles depending on the size and capability. The European financials talk about the risk and cost in the process to be first place though the revenue and honor follows too. They say that the second place following the first place can also be beneficial because they can reduce the cost of trial and error. This policy can realistically increase the revenue and reduce the cost.
When Nokia was collapsed, the world’s verdict was that economy in Finland would follow the footsteps but the nation proved the critiques wrong. It was because the nation provided the habitat for start-ups to evolve and survive. Now, there are Finnish start-ups prevailing Europe;
- “Mistral mobile” is a company which is founded by people at Nokia’s financial service department.
- Online payment service providing across Europe is done by “Holvi”
Some start-ups have now been entitled as bank which once was a company with 10-20 employees. They call themselves as bankers though their business was titled as electronic financial payment service. Therefore, in Europe, startups can grow if good service is provided and European people define a bank as an institute that gives financial services.
If Korean financial authority only regulates on internet bank capital requirement of 43 million USD, it would give no chance to found small internet banks. We cannot anymore just grow the biggest bank. We have to provide an environment where institutions can provide various financial services regardless of their sizes. The whole industry can be in jeopardized situation once the authorized companies go badly in their businesses. I can take a “NOKIA” as an example. Once the environment is provided, there will be a virtuous cycle between fintech companies and users.
We have to learn it from Luxembourg where it draws all the labors and industries. One good example is Ireland. Many IT companies, including Google, fintech companies and start- ups are located and as a result, by having labors with age between 20-30 came to work, the estate market and domestic average age have become active younger respectively. By providing such environment, Ireland has gained added values through it. United Kingdom and Luxembourg have tried to benchmark Irish case and now making contacts to their nations to start the business more vigorously.
The government of Europe’s representative financial nation, Luxembourg, has launched various IT companies and fintech companies in the early stage. It was in order to create financial environment and develop internet bank. Paypal, Amazon payment, Paycash, ebay, iTunes etc. are actively running their businesses at the moment. Luxembourg has great vision of attracting more of e-commerce based companies by contacting personally. When the environment is created, other sectors can also be accompanied in growth. United Kingdom is growing vigorously. The fintech industry’s growth rate was 600% in year 2013 and this number was 3 times bigger than Silicon valley, USA.
The domestic status of establishing internet bank is in rapid progress but we have to admit that we are certainly behind. As we are behind, it is important that we create the fintech with open market environment that various startups can have a chance. Not in the concept of “Survival of the fittest” which is closed to all, the environment where it liberates all the businesses. For example, should a female business woman be granted who wants to start a small children oriented bank in Geoje Island with a capital of 2 million USD? Virtual account is a tool which is beyond time and space.
Fintech industry is said to be a goose with a golden egg but the reality is different. Because the industry is close related to customers’ evaluations, it has to be reminded all the time.
Paygate Co., Ltd has been providing electronic payment service since 1998. Currently, Paygate is dealing with various financial institutions that Paygate has been with them ever since their start up era. It took over 17 years to have partners at Hongkong, Japan, Gramany, USA etc.
PayGate Co., Ltd has its own currency exchange office and is concentrating on cross-border transaction business with 172 different currencies. The main serving currencies are Korean WON, USD, Japanese YEN, EURO, and Bitcoin. It also has been dealing with USD with payment solution of Alipay, CUP, and TENpay. PayGate Co., Ltd is Korea’s first e-financier to deal with FX business and run a currency exchange office together. With running two kinds of business at the same time, PayGate Co., Ltd is also planning a global remittance business.