FinTech Asia Interviews: Steve Lee, CSO at KCL

Hi Steve, can you introduce yourself and KCL?
Hi, my name is Steve Lee and I am the Chief Strategy Officer (CSO) at KCL. KCL stands for Korea Crediac Life, we are a fintech and O2O platform based in Seoul, Korea. KCL consists of 2 business models – a device called AD-POP, which is a mobile payment platform, and an O2O platform, which is a software called EMO (everything mobile ordering). These are the two businesses that we mainly focus on in Korea. We are currently implementing and servicing about 470,000 merchants with mobile payment and O2O services.

Can you provide us with an overview of your role as CSO at KCL?
My role as the CSO is to set up a new business and work on new strategic partnerships. Besides that, I oversee the technology in KCL, both in the software and hardware that we develop.

What was your background prior to joining KCL?
My background prior to KCL is pretty long – 26 years to be exact. My first job was with Samsung Electronics America at New Jersey, which lasted for about two and a half years. After that, I decided to pursue an MBA at New York University (NYU) where I was working while pursuing my MBA.

After my MBA, I moved to Boston from New York and worked at an IT company as a CFO. Because I spoke Korean, I got involved in overseas marketing as well, especially in the Korean market. During my stint at the company, I was lucky enough to work with Korean conglomerates in Korea. And I had the chance to see more opportunities outside of the US especially in Korea, as well as Asia.
After working in the US corporate world for about 10 years, I realised that I had entrepreneur DNA in me. So, I decided to go back to Korea to launch my first startup. I chose my motherland because, back in 2000, Korea was not yet a strong IT nation like it is today. I saw a huge opportunity in that, which is why I started an e-commerce company. It was tough starting an e-commerce company then as I had to build everything from scratch – there were no existing e-commerce platform companies, which meant there were no existing infrastructure systems or processes available.

After selling the company, I decided to move back to the US. There I started my second startup. Two and a half years after running my web integration company in the US, I sold the company. At that point of time, in 2008, the iPhone was launched in US, and I saw technology shifting to mobile. So, I decided to move back to Korea to start my third startup company which is based on mobile platforms.

How did you get involved in KCL?
When I was running my third startup company in 2012, I met Tae Jung, who is the CEO of KCL now. I met him through a partnership with my third company called WingMobile. There were barely any O2O service platforms in Korea then. I was searching for a merchant to use our services, and in particular, a company with a healthy number of merchants already. At that time, KCL had over 50,000 merchants that they were handling for credit card processing as well as other processes. The CEO and I met and we clicked, so we signed a Memorandum of Understanding (MoU) for the partnership. My company used their sales and merchant networks for our coupon service, Wingcoupon, which is a local coupon service. After which, I exited my third startup through an M&A deal.

We kept in touch and maintained our relationship. One day, he approached me and asked if I would like to help him in his company strategies and to bring KCL to the next level – to dominate the mobile payment platform and O2O platforms in Korea. And I said yes!

Why do you think that KCL will succeed, what does KCL have as an edge compared to your competitors?
Unlike other startups, we already have an existing merchant base to start with. With WingMobile, the first company that I went for investments/funding was called KCP, Korea Cyber Payment which is a listed company in Korea. They were a mobile payment gateway company, similar to KCL but much bigger. I went to them too because they have merchant services as well.

I said, ‘I have this great business idea, if you invest in my company, I can bring your company to heights that you have never been to.’

And I managed to convince them to invest in my company! They hopped on board as investors and partners, but I was having a hard time getting their merchants to sign up because KCP is a large company, thus they had far less more control over their merchants. KCL, on the other hand, has a good sense of control over the merchants. Although they have fewer merchants, they are able to better utilize them.
As for startups who are running similar services and other fintech companies, they will have to go through the stage of getting merchants signed up to their business, which will take at least a two to three years to accomplish. Our edge at KCL is that we are ahead of the game.

Are you currently facing any challenges at KCL?
As we are a hardware company, and we are often characterized as that, VCs tend not to like investing in us as they try to stay away from hardware investments. We want to be a company that provides a platform, for mobile payment gateway and O2O services, hence, we believe that it is important to first manufacture the mobile devices and then install it into our merchants. There have been some hurdles in this area. Nonetheless, currently we managed to convince some investors on board. When these hurdles are cleared, it will be much easier for us to implement our platform with the infrastructure we have built. And at that point, anyone who is interested to have mobile payments systems can come in and use our merchants.

Can you tell us about some of KCL’s biggest achievements since it’s conception?

We began as a merchant services provider, but along the way, we decided to manufacture hardware, which is a mobile payment device called ADPOP. It is difficult for small startups to manufacture this hardware, therefore we believe that it is actually a big achievement for KCL.

Other than that, we recently signed a strategic partnership with First Data International, the world’s largest payment gateway. We are currently at the developing stage with their Korean branch where we are synching their backend server with our backend server, so that we are in line with the information on their end. By doing this, we obtain information from the merchants first hand and store it in our backend servers.

Taking an example from one of our merchants, which is a restaurant – if they change the prices of their Point-of-Sale (POS) system, we will be able to have it changed automatically within our servers. If I would like to order something on my app and if the merchant changes their prices, the user will also be able to see it automatically inside the app. All these changes happen real time. This is something that no one has done in Korea, so I think that this is something great that we achieved.

And because of that, we actually signed another partnership with another company, which is a delivery service in Korea which is available in 21 countries worldwide. Our partnership works in such a way where we provide them with our APIs and then this company are able to utilize our API (our 470,000 merchants) for their order services. We have signed 2 more similar partnership with credit card companies in Korea for this API.

What are the next milestones for KCL?
We want to be successful in Korea and then expand to Southeast Asia, that is our next milestone. With our existing services and technology in Korea, to expand to other parts of SEA to extend our existing business. Also we will utilize our 470,000 merchants to get a kick start at SME lending.

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