Lakala to Update 60,000 Payment Terminals
DoNews, 10/31/12
In an October 24 interview, Sun Taoran, Chairman and President of Chinese e-payment service company Lakala, said that the company is preparing to upgrade its more than 60,000 payment terminals in 300 cities across the country, at an average hardware cost of RMB 3,000 per terminal. Lakala plans to expand coverage to 100,000 terminals in 2013.
Sun said Lakala would not "raise financing just for money," but intimated that the company would not rule out the possibility of considering a stock-sharing agreement with investors - "like operators or banks" - based on resource-sharing.
Lakala has three main service categories at present: payment terminals, mobile payment, and enterprise billing. The company also offers value-added services through its network of physical terminals, in order to better expand payment channels and maintain user "stickiness." Sun predicted that future revenues will be split at a ratio of 2:4:4 between physical terminals, mobile payments, and enterprise billing, respectively.
Lakala launched a card reader for mobile phones in May 2012. The company has sold nearly 1 mln of the RMB 199 devices to date, and the corresponding mobile payment app has been downloaded more than 3 mln times.
As of September 2012, Lakala employed more than 4,000 people , roughly 2,500 of them engaged in terminal network development and maintenance and on-the-ground sales. HR costs are expected to continue to increase in this area, corresponding to Lakala's expansion of its network.
Chinese handset manufacturers Lenovo (0992.HK) and Xiaomi - both Lakala partners - predict total shipments of 40 mln handsets in 2013. Sun Taoran's goal is for these handsets to ship with Lakala's client pre-installed, and for the company's "standard-model" card-reader to be bundled free of charge. When asked about the model for such a partnership, Sun said only that talks were ongoing.
Lakala has also established partnerships with China Mobile (NYSE: CHL; 0941.HK), China Unicom (NYSE: CHU; 0762.HK; 600050.SH), and banks including China Minsheng Bank and China Guangfa Bank, allowing subscribers who prepay a certain mobile balance or sign up for related banking services to receive Lakala card-readers free of charge.
The company is also at work on expanding the payment options on offer. According to Sun, Lakala releases an update to its mobile client every two weeks, each time adding a new payment feature. The Android client for Lakala allows users to conduct a range of operations including purchasing lottery and film tickets and paying fines. More features, including airline and concert ticket purchasing, are forthcoming.
Editor's Note: For more background on this topic, please see "Lakala Debuts Handset POS Reader Peripheral" MD 5/29/12 issue.
Keywords: Sun Taoran wireless Lakala e-payment mobile payment HR POS
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