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HSBC to launch PayMe for Business mobile app

The bank’s head of product for PayMe, Deep Bedi, explains what the bank has learned from its Venmo-esque app.



HSBC is preparing to launch PayMe for Business, taking its PayMe mobile app for consumers into the corporate world.

Deep Bedi, head of product at PayMe for HSBC, says the product is not yet in the market, and did not elaborate on the timing. “We’re thinking how to help businesses and local entrepreneurs,” he said, speaking at an event organized by AMTD Group and Polytechnic University of Hong Kong.

In addition to helping merchants collect payments, the app can offer them reporting functions and other tools to help them run a business. “This could become the operating system of your business,” Bedi said.

HSBC launched the app last year and now has 1.3 million users. The concept emerged over 2014 and 2015, as the bank saw its online channels going ignored, while tech businesses were rewiring their interfaces to be mobile-first. Millennial customers were abandoning the bank.

“The future of our banking relationships was going to competitors, to upstarts,” Bedi said, particularly as the stored-value facility license was used by the likes of Alipay, WeChat Pay, Octopus’s Tap’n’Go, PayPal and others to intrude on banks’ stranglehold on payments.

The bank obtained an SVF license in 2015 without really knowing what to do with it. At the time, the only way its customers could send a payment was to use cash, to use an ATM, or to use its website, all choices a growing number of customers didn’t want.

Having seen examples in other markets of consumer-to-consumer payment apps, HSBC decided to do the same, and it set up PayMe like an internal fintech startup to get it done.

From wallet to network
The system has had its ups and downs: Bedi noted the servers crashed upon launch, due to high demand. The bank has also had to increase the amounts that can be transacted, in order to compete with rivals, and to enable credit-card top-ups. Some of these tech fixes will be made redundant now that the Hong Kong Monetary Authority introduced a faster payments system this summer.

To gain scale, the bank needed PayMe to operate beyond HSBC and Hang Seng customers, and transform it into an app that the bulk of the population uses daily. They added social aspects, so that users can see not just their account records but the transactions of their friends, with transactions based around known names and pictures, rather than account numbers.

Bedi calls PayMe a “lifestyle app”. “There’s nothing sexy about payments,” he said.

But this masks a deeper reality: the bank has been turning PayMe into a network, rather than just a wallet. It is using machine learning to categorize and calculate what users are doing on the app, and to see who is connected to whom. In a city of under 8 million people, its user base is turning into a view on aggregate economic activity.

This could become the operating system of your business
- Deep Bedi, HSBC

The one anticipated use case is indeed the biggest use case (splitting restaurant bills with friends, like America’s Venmo). Other activities including using the app to pay rent, finance weddings, and send red-packet money (àla WeChat Pay).

But to its surprise, HSBC found that the second-biggest use was customers paying businesses. So business owners have organically become users of PayMe. And in the bank’s heatmap of the network, it can see business owners and entrepreneurs becoming hubs of payment collections, with relatively few payments going out.

Today the bank believes it is creating a two-sided marketplace between businesses and consumers. Bedi says HSBC’s roots are in commercial banking, and that PayMe offers it a way to redefine itself as such. “We can help the digital entrepreneurs of tomorrow,” he said.

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