Earlier this year, Luxembourg welcomed a new FinTech company with a unique position that differentiates it from many other young innovative companies. PingPong was founded in China to serve companies in the Middle Kingdom that wish to sell their products via international e-commerce platforms. ‘We are here to offer our Chinese customers the opportunity to sell more easily across the world, by relying on an efficient, fast, and accessible payment service’, explains Danielle Kuhn, Chief Operating Officer of PingPong Finance.
New Business Opportunities
The ambition of this young FinTech company is none other than enabling Chinese stakeholders to improve their trade ties with the world. The stakes are high. China is now one of the largest producers of goods in the world. PingPong wants to allow many Chinese manufacturers to access new markets internationally and sell more easily by facilitating relations and trade ties with their partners. For small and medium-sized businesses, opening a foreign bank account can be complicated. Consequently, trade with the world and ensuring that the fruits of your sales are collected can be a difficult task. ‘In this context, we want to enable our customers, established Chinese merchants, to access the global banking system and to have the necessary guarantees to make transactions, adds Holly Flocker, Chief Risk Officer and Head of Legal at PingPong. To achieve this, you need to take into account the Chinese regulation with its numerous specificities, and be able to connect to various international markets which also operate according to established and diverse rules. ‘
Collecting payments and sending them on
The customers of the technological payment platform implemented by the startup are located in China. The parent company of PingPong is strategically located in Hangzhou, China's e-commerce capital. The FinTech collects payments made abroad before sending them rapidly and simply to its customers. ‘We now serve tens of thousands of businesses and individual entrepreneurs established in China or Hong Kong’, says Danielle Kuhn. Of course, China did not wait for PingPong to arrive before it started trading with the world. However, from the point of view of the FinTech company, the potential for improvement in trade relations and payment processes is considerable. Now, technology can simplify exchanges while offering better guarantees to customers. ‘Our goal is to manage and track payments at low costs that are less than or equal to 1% of the amount exchanged, by consolidating our position based on our expertise and our technology. We only charge a fee based on the amount of the transaction, and nothing else. So there are no hidden fees’, says Danielle Kuhn.
After the US, Europe
PingPong just moved to Luxembourg but it's been months since the young FinTech company began its international expansion. PingPong first opened offices in the United States, to connect the US market and China. Today, the company is present in New York and San Francisco. The US, with its many connected consumers, is indeed a high-priority market for China. ‘We work with banking partners in the US to more easily collect payments and ensure their transfer to our customers’, adds Danielle Kuhn. After the United States, PingPong and its 80 employees worldwide wanted to open up other markets for its customers. ‘Our customers have widely expressed a desire to work with a similar platform in Europe to open up new channels between China and the old continent, explains Danielle Kuhn. They see Europe as an important market.‘
Today, we serve tens of thousands of businesses and individual entrepreneurs based in China or Hong Kong
Luxembourg and China, a deep connection
According to PingPong, Luxembourg was the ideal place to setup this new platform, for several reasons. ‘The business links between China and Luxembourg are already strong. Several Chinese banks have chosen to open subsidiaries in the Grand Duchy. Healthy cooperation between the two countries led to an interesting business alignment. Moreover, the regulatory framework is favorable and the CSSF has an open mind in welcoming newcomers. While always being ready to listen, it also guided us in our efforts. Luxembourg has a rich pool full of appropriate skills. Even outside the financial sector, many companies in the e-commerce and payment industries have a local presence.‘
EBRC deployed the platform and manages the infrastructure
From Luxembourg, PingPong will act as a payment institution. Its technology platform will be hosted by EBRC and it will build on the services of the European cloud provider to ensure the operational side of its services. ‘Within EBRC, we found many useful skills to support our development throughout the European Union. Through its services, the operator was able to offer us all the guarantees we needed, including in terms of security, availability and performance’, adds Danielle Kuhn. PingPong chose a private cloud hosted in EBRC’s data centres. ‘EBRC will deploy the initial infrastructure and will be responsible for maintaining it. In a Managed Services perspective, EBRC will develop close ties with our own teams to ensure the efficiency of our platform and our services’, says Danielle Kuhn. EBRC has been accompanying financial and FinTech stakeholders for many years. ‘The on-site expertise, which is evident due to the numerous licenses and certifications held by EBRC, ensures we meet all regulatory requirements, says Holly Flocker. This partnership allows for a rapid deployment of our platform and helped us to easily collect all the necessary elements to obtain a license as a payment institution, which is crucial for our operations. The data, its management, its protection and processing are obviously critical to our business. A robust technology platform and optimised processes are essential to ensure the best service to our customers. ‘
There are already strong business ties between China and Luxembourg
A team of about ten people in Luxembourg
Knowing that its platform provides high availability, and that any issues relating to security and data protection are fully covered, PingPong can focus on its core business. ‘From our office in Luxembourg, a team will ensure the administration of the company, particularly regarding compliance and accounting and financial monitoring, explains Danielle Kuhn. Our office will also incorporate an R&D team that will work on implementing new services depending on the needs of our customers and to ensure further optimisation of our costs and operations. At the end of the first quarter, PingPong should have grown to a local team of ten people, which will grow further as we gain market share. ‘