PRO­GRAM­ING WIZ­ARD

Aung Kyaw Moe built a multi­na­tional Southeast Asian IT com­pany that just raised $7 mil­lion but he kind of hates com­put­ers

Mizzima Business Weekly - - FRONT PAGE -

Aung Kyaw Moe, 40, is back home in Bangkok from Viet­nam, where he has talked with five banks about pro­vid­ing se­cu­rity soft­ware for debit and credit card users. Hav­ing fi­nally found what seems like re­li­able lo­cal part­ner in this opaque mar­ket, he thinks there might soon be a Viet­nam branch of 2C2P, the com­pany he started on the edge of des­per­a­tion a dozen years ago. As Group CEO, he does a lot of trav­el­ling since there are 2C2P of­fices in his home base of Thai­land, as well as in Myan­mar, Sin­ga­pore, In­done­sia and the Cam­bo­dia. There are cus­tomers in Hong Kong, Laos, Malaysia and the Philip­pines too. And in the past year, he spent two three-week stints on the US cam­pus of the Mas­sachusetts In­sti­tute of Tech­nol­ogy (MIT) while com­plet­ing an on­line ex­ec­u­tive cer­tifi­cate, “an add-on MBA.”

In April, 2C2P also landed its largest chunk of out­side fund­ing yet - $7 mil­lion from Hong Kong pri­vate eq­uity firm Amun Cap­i­tal and Ja­pan’s GMO Ven­tures Part­ners - for a to­tal of $10 mil­lion in the past five years. Yet Aung Kyaw Moe doesn’t seem par­tic­u­larly wor­ried about meet­ing in­vestors’ ex­pec­ta­tions or giv­ing up some own­er­ship to out­siders. One of his mot­tos is to “be con­ser­va­tive in pro­jec­tion and try your best to over-per­form.” He will ex­pand his 85-strong staff and the prod­uct line of “cards, cash and cash-equiv­a­lent ac­cep­tance ser­vices” but “rev­enue has also grown sig­nif­i­cantly. Next year there will be an­other fund­ing round with a big­ger fig­ure.”

Grow­ing mar­ket in Myan­mar

Much of his travel time in the past year has been spent in his home­town of Yan­gon, as 2C2P rolled out new pay­ment ser­vices with banks and com­pa­nies. The 1 mil­lion Myan­mar na­tion­als who have ob­tained ATM cards in the past year or two al­ready have some of 2C2P’s tech­nol­ogy in hand. Most own­ers may now just use their card to with­draw their en­tire salary from the bank, per­haps un­aware that it’s also a debit card that can be used to make pur­chases. In the past year, 2C2P worked with the banks’ Myan­mar Pay­ments Union (MPU) to en­able the cards to be used on the coun­try’s first e-com­merce plat­form. Users can now pur­chase items from 20,000 points in all: a com­bi­na­tion of do­mes­tic web­sites and phys­i­cal points-of-sale (POS) at large stores and ho­tels. Soon they will be able to pay on­line for flights on most Myan­mar air­lines with the MPU card.

It’s due to 2C2P’s work in the past year with Air KBZ, Asia Wings, Myan­mar Na­tional Air­lines and Yadana that those with for­eign- or lo­cally-is­sued Visa or MasterCard­s (or China UnionPay or JCB) cards can now book and pay for their tick­ets on­line. The sites may not be pretty yet, Aung Kyaw Moe says, but users have no need to worry about the se­cu­rity of credit or debit cards on the sites. They all em­ploy “ex­actly the same tech­nol­ogy and same sys­tem” as used by the web­sites of such 2C2P cus­tomers as Thai Air­ways, Bangkok Air­ways, Lion Air, Nok Air, Noks­coot and Vi­et­jet. 2C2P soft­ware is also re­spon­si­ble for iACCEPT app for smartphone­s and tablets that en­ables own­ers to con­duct vir­tual trans­ac­tions with their debit or credit ac­counts.

No op­tion

As so of­ten has hap­pened in his life, Aung Kyaw Moe didn’t en­ter the elec­tronic pay­ments field—or set­tle in Thai­land or study com­puter pro­gram­ming - be­cause he was driven by a great pas­sion or cu­ri­ousity: there sim­ply was no other op­tion. To this day, he be­lieves that be­ing a physi­cian would have been more re­ward­ing: “Some­times I hate com­put­ers. Well, I like it but it’s from the brain, not the heart.” Un­for­tu­nately, he earned only two dis­tinc­tions on his grade 10 ex­ams, which meant he could only study physics at uni­ver­sity. De­fy­ing his civil ser­vant par­ents, who wanted him to stick with his ‘des­tiny,’ he en­rolled at the WMD com­puter train­ing cen­ter in Yan­gon for a sin­gle rea­son: it was sim­ply the only op­tion at the time in Myan­mar to earn an over­seas de­gree. If he passed his ex­ams af­ter two years of stu­dyng pro­gram­ming lan­guages and data­bases, he would be el­i­gi­ble to com­plete the fi­nal year and earn a de­gree at a Bri­tain’s Guild­hall Uni­ver­sity. Break­ing with his par­ents meant he had to pay school fees on his own, which he did by work­ing for two-anda-half years as a night but­ler at the Strand Ho­tel. Last year, the Strand was one of the first fa­cil­i­ties to ac­cept pay­ments by iACCEPT.

Work­ing as a ho­tel but­ler

While com­put­ers weren’t his ideal field, Aung Kyaw Moe be­lieves there’s no point in ex­ert­ing any less than his best ef­fort at a task. Such was his com­mit­ment that when 600 stu­dents through­out the coun­try took the Bri­tish-ad­min­is­tered sec­ond-year exam for the IDCS di­ploma (or In­ter­na­tional Di­ploma in Com­puter Stud­ies), he earned the high­est scores in the coun­try. KMD then sent him in 1997 as a teacher to a branch school in Ph­nom Penh, where he first en­coun­tered the in­ter­net. By 1999, hav­ing saved enough for a fi­nal year of study in Lon­don, he quit WMD and stopped in Bangkok to pick up his visa at the Bri­tish em­bassy. His ap­pli­ca­tion was re­jected. In his view, re­turn­ing to Cam­bo­dia or Myan­mar were not op­tions. Thai­land was his only op­tion and but he could only legally stay for one month on a tourist visa.

He fi­nally was hired for a job at Juris Asia, a Fren­chowned com­pany where he met his fu­ture wife, a Thai lawyer. The com­pany was com­pil­ing a data­base with trans­la­tions of var­i­ous coun­tries’ com­mer­cial law, but later turned to other kinds of pro­gram­ming, in­clud­ing for mo­bile phones. Ba­sic Nokia mo­bile phones were very popular in the early 2000s and Aung ex­celled at

cre­at­ing mo­bile games for them. His games were so clever that he rep­re­sented his com­pany in com­pe­ti­tions in Sin­ga­pore and Paris.

Turn­ing point

The birth of his son, Ta Ta, in April 2003, was the crit­i­cal turn­ing point. He im­me­di­ately de­cided that he would send Ta Ta to Bangkok’s ‘best’ in­ter­na­tional school, ISB, the In­ter­na­tional School of Bangkok. (ISB may not be the ‘best’ school in Bangkok, but it is the most ex­pen­sive: the an­nual school fees for mid­dle school, which Ta Ta now at­tends, are more than $27,000. Aung Kyaw Moe also has an eight-year-old daugh­ter, Mimie). To ac­com­plish that, he needed to earn much more than an em­ployee’s salary, so quit his job to set up his own com­pany. He in­sists: “I would still be a pro­gram­mer if my son hadn’t been born. I am one-hun­dred per­cent sure of that. Af­ter that, ev­ery­thing I did had a sin­gle ob­jec­tive: to send my son to ISB. I al­ways had that in my crosshairs.”

When the tele­com ex­ec­u­tives who had promised to in­vest in his mo­bile games com­pany backed out, Aung Kyaw Moe was once again ‘des­per­ate’ when a Thai friend work­ing for Bank of Asia asked him if he could cre­ate a cheaper ver­sion of the so-called 3D Se­cure card se­cu­rity soft­ware than what was be­ing of­fered by a Sin­ga­porean com­pany. From a con­sumer point of view, Aung Kyaw Moe ex­plains, “It’s that screen that pops up on­line when you buy someoth­ing on­line that says, ‘ver­i­fied by’ Visa or MasterCard.’ ” Char­ac­ter­is­ti­cally, Aung Kyaw Moe agreed to a three-week dead­line, down­loaded the com­plex pro­to­col, stud­ied in­tensely, de­vel­oped the soft­ware, and got it ap­proved by Visa. Only then did his friend sug­gest that he sell it for 1 baht—in ex­change for a rec­om­men­da­tion to other Thai banks. Aung Kyaw Moe had no sense at the time how card se­cu­rity would fac­tor into bud­ding e-com­merce, but the bar­gain worked. To­day al­most ev­ery Thai bank has 2C2P’s soft­ware. Sin­ga­pore’s UOB bank, which ac­quired Bank of Asia, uses it through­out its re­gional net­work.

A Thai Paypal

He took even a big­ger risk in 2004 when, along with an­other Thai friend, he de­cided to cre­ate PaySbuy, a do­mes­tic clone of PayPal, the US-founded pay­ment sys­tems that op­er­ates like a vir­tual bank sit­ting sole-

ly on the in­ter­net. PayPal at the time was il­le­gal in Thai­land and so, tech­ni­cally, was PaySbuy but Thai small- and medium-sized com­pa­nies and their cus­tomers were look­ing for more ef­fi­cient ways to trans­fer money. Within a few years, PaySbuy had 100,000 cus­tomers and staff from the Bank of Thai­land were ask­ing for help draft­ing an e-money li­cense law based on PaySbuy’s busi­ness model. In 2007, the pair sold PaySbuy to Te­lenor’s mo­bile phone ser­vice in Thai­land in 2007 for 200 mil­lion baht (US$6 mil­lion).

Yet Aung Kyaw Moe stresses that the road to suc­cess was a long hard slog: “In 2003, 2004, 2005, 2006 ... I don’t even want to think of those years.” Of­ten he slept overnight in the of­fice. He faced con­stant re­jec­tion from pos­si­ble cus­tomers. Some job can­di­dates walked off in­ter­views when they saw his first of­fice was only 20-square me­ters. His wife’s jew­elry was pawned

“mul­ti­ple times” to make monthly salary pay­ments.

Study­ing busi­ness

De­cid­ing in 2006 he needed to learn more about man­age­ment and fi­nance, he was ac­cepted in by Thai­land’s most-re­spected English-lan­guage MBA school, Chu­la­longkorn Uni­ver­sity’s Sasin In­sti­tute, which is part­nered with the grad­u­ate busi­ness school of North­west­ern Uni­ver­sity in the United States. A US pro­fes­sor at Sasin en­cour­aged him to think be­yond Thai­land and to set up an of­fice in Sin­ga­pore. The pro­fes­sor also coached him on how to ap­ply for a Sin­ga­porean gov­ern­ment startup grant and how to make per­sonal pre­sen­ta­tions to po­ten­tial in­vestors. Rep­re­sent­ing Sin­ga­pore in Bei­jing, he even won an in­ter­na­tional com­pe­ti­tion with the three-minute pre­sen­ta­tion pitch.

By 2010, 2C2P had enough trac­tion and highly sat­is­fied cus­tomers that in­vestors were seek­ing it out. Aung Kyaw Moe ac­cepted $1 mil­lion from Sin­ga­pore-based ven­ture fund Dig­i­tal Me­dia Part­ners (DMP). Dmity Le­vit, DMP gen­eral part­ner, says that he was on the look­out for am­bi­tious re­gional com­pa­nies in­volved in elec­tronic pay­ments with reach into tele­coms, banks and re­tail and an un­der­stand­ing of global ac­tors (like Visa and MasterCard), coun­try-level (like reg­u­la­tors and banks) and lo­cal (like con­sumer habits) shap­ing it all: “It was Aung’s abil­ity to keep a clear view of in­dus­try dy­nam­ics at mul­ti­ple lev­els that closed the deal. It is very rare in this space that the en­tre­pre­neur doesn’t over-fo­cus on one op­por­tu­nity. The mind of a chess player is nec­es­sary and Aung hap­pens to be one.” (In fact, Aung is Hon­orary Sec­re­tary of the Myan­mar Chess Fed­er­a­tion and was a mem­ber of the Myan­mar team that com­peted at the 2012 Chess Olympiad in Istanbul).

New fi­nance op­tions

In its dozen years of op­er­a­tion, 2C2P has grad­u­ally shifted its cus­tomer base from be­ing a pri­mar­ily a sup­plier of ser­vices to banks to one that ser­vices com­pa­nies. The third front in the com­ing years be ser­vic­ing peo­ple that don’t have a bank ac­counts or that seek more ef­fi­cient ways to trans­fer money that side­step the tra­di­tional bank­ing sys­tem. Myan­mar isn’t the only Southeast Asian coun­try where the vast ma­jor­ity of the pop­u­la­tion doesn’t have a bank ac­count. Some of the un­banked are al­ready buy­ing items on­line and pay­ing cash on de­liv­ery to their homes or a nearby shop. Per­haps soon many will make pur­chases us­ing vir­tual “wal­lets” stored on their mo­bile phones, as many Filipinos al­ready do. Or they may be us­ing a vir­tual in­ter­na­tional cur­rency like Bit­coin.

Gov­ern­ments in the re­gion of­ten hold off writ­ing laws reg­u­lat­ing the new pay­ment sys­tems be­cause bu­reau­crats don’t un­der­stand the tech­nol­ogy or trends, Aung Kyaw Moe said, but he thinks the in­no­va­tions will pre­cede laws reg­u­lat­ing them.

Rather like his ex­pe­ri­ence with PaySbuy, he points out that, about a decade ago, most gov­ern­ments in and their tele­com com­pa­nies con­sid­ered Skype and other forms of VoIP (or phone calls via the in­ter­net) out­right il­le­gal. “They fi­nally be­came main­stream re­gard­less of gov­ern­ments around the world try­ing so hard to ban VoIP. To­day ev­ery­one uses it. AirBnb and Uber are sim­i­lar ex­am­ples.”

“To­day I’m glad that I didn’t get six dis­tinc­tions be­cause I was forced to look at other al­ter­na­tives and I com­mit­ted one hun­dred per­cent,” Aung Kyaw Moe says. “I de­fied my ‘des­tiny’. I de­fined my des­tiny.”

Aung Kyaw Moe, cen­tre back, with some of his 2C2P team. Photo: Face­book

2C2P is help­ing rev­o­lu­tion­ize pay­ments. Photo: Mizzima

Aung Kyaw Moe, Group CEO of 2C2P. Photo: Mayco

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