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UMPay: connect with customers with the importance of data

As a mobile payment provider, UMPay is aware of the importance of data to improve its basic services as an effort to expand market influence, retain its customers and explore personalized services.


Newcomers to an unfamiliar city are often encountered with the troubles of looking for hotels, bank outlets and supermarkets, but not to Wang Wen. In her time in Shanghai on a business trip, she had everything at the tip of her finger. Using UMPay’s FMP (Financial Messaging Platform) app, she quickly located a number of hotels that offer discounts and supermarkets that take bank cards. She also paid her room from her mobile account. What’s more, she paid her credit card bill in time following the date and location prompts shown on the FMP app.     


FMP is just one of a variety of mobile payment products in the UMPay family, which, after meeting the basic requirements of mobile payment, are now looking to develop value-added products and services oriented to individual needs.  


“Actually, ten years ago we were insisting that running business was not only about goods’ value but also its additional value, otherwise it will be down in the future.” Yu Qi, Vice President of IT at UMPay, an IT veteran, said in an interview with Sino-foreign Management in his office near Beijing’s Gulou area, while showing the FMP app in his mobile phone.


Payment Market: sink or swim


When UMPay was founded in August 2003, Alibaba was at the final days of preparations for the release of Alipay, which had a rather humble beginning. As the economist Zhou Qiren recalled, in 2003, in a cyber economy conference hosted by Peking University, Jack Ma (Ma Yun) talked very passionately about the future of e-commerce, but his talk didn’t resonate very much with the participants. Subsequently Alibaba’s release of Alipay to facilitate e-commerce and online shopping was not met with favorable views,


But UMPay was blessed with all the advantages. As the only platform for China Mobile users to make mobile phone payments, the company became a key player in“Monternet,” a value-added telecom service launched by China Mobile. “The development of Monternet makes even the most daring predication seem overly conservative,” commented a newspaper on this emerging business mode at the time. Backed by two heavy-weight shareholders - China Mobile and China UnionPay, UMPay had no worries about business ecosystem issues such as reputation and product quality, not even about the size of potential market.


UMPay at its early stage, operated just in assisting China UnionPay and China Mobile in bundling of mobile phone and bank card services and as a result was dubbed by the media China Mobile’s real “specialist “behind the scenes. But UMPay’s ambition didn’t stop at that. Gradually discovering the huge demand for third party payment in the market, the company began to delve into the downstream of the mobile payment industry chain for the development of third party payment platforms. At present, UMPay’s business has encompassed the fields of B2B, B2C, B2B2C, etc. and the company has become a leading provider of mobile financial and mobile e-commerce industry chain services in three core areas: payment, financial information and local multi-application.    


Still, that is not all. The emergence of smart phones has hastened the end of the business mode of Monternet and forced SPs (service provider) of the Monternet era to bypass telecom operators to develop and compete in the downstream market. In a short span of time, previously upstream companies such as Apple, Sina and Tecent, changed roles and became downstream companies in their position to telecom operators. “Products such as Wechat in particular have brought great pressure to bear on the operators,” Yu Qi said, “Without developing more value-added services; operators may be reduced to channels in the future.”In this respect, the interests of UMPay and the operators are closely linked.    


In fact, for the past ten years, China Mobile has been looking for a good business mode for its value-added telecom services, but there is no market-oriented company that has by now integrated itself into the downstream market. To cope with the channel crisis brought on by the erstwhile SPs and the newly emerged market forces, China Mobile founded its own e-commerce company in June 2011 and then three months later, obtained the Third Party Payment Business License issued by People’s Bank of China. In a little over three years’ time since May 2010, more than 250 platforms have obtained the Third Party Payment Business License. The rapid emergence of the third party payment market has greatly challenged UMPay once advantageous position.


For UMPay, the choice is one and only: to maintain its gateway position in the mobile payment market by upgrading mobile payment technologies and improving service efficiency on the one hand; and on the other hand, to occupy a position in the mobile payment downstream market by developing value added services in the trading and financial areas.


How to turn accumulated resources into profits?


Still, UMPay has apparent advantages. According to Ling Xiang, Marketing Director of UMPay, by 2012, UMPay has had service coverage of more than 400 customers and has handled cumulatively more than 100 billion RMB in its operations and the daily transaction volume on its platform has exceeded 100 million RMB. While China Mobile and China UnionPay respectively hold the telecom accounts and financial account information of these users, UMPay is in possession of both. 
In the past decade, UMPay has also accumulated a huge amount of business and management data, which is an advantage not available to those new third party payment providers. In the era of big data, this kind of information and data enable companies to gain better insight into customers and consequently improve products and services.  


In view of that, the pressing task for UMPay is to achieve quick search through integration of all the linked data dispersed in its various subsystems. “UMPay’s business is developing really fast with multiple and complex business lines, so it’s time to streamline and integrate all these businesses and business lines and assess the cost of each line,” Yu Qi told Sino-foreign Management. In fact, UMPay had been doing data processing all by itself, until 2011 it entered into a partnership with IBM for the establishment of a big data-based data center.          


With the assistance from IBM, UMPay’s data center was officially established in the end of 2012. The completed Phase I of the data center project can achieve the following four basic functions: statements and statistic reports; data management cockpit in support of the management’s decision making; KPI (Key Performance Indicators) integration; and fast calculation of automatically extracted data from the data base.


“Due to dispersed business lines and the dispersion of corresponding transactional data, behavioral data and linked data, it is difficult to establish an ideal big data application mode within a short time,” said Ling Xiang, “UMPay has put in a lot of efforts in doing strategic data and emerging business data warehousing, and we hope that the present business modes and designs and the new data center can bring proportional revenues to the company and help us achieve user assets data management as well as the key transition from products to big data services.”  


According to the “gateway” theory in the internet field, as long as you have large volumes of network traffic and a huge user base, you have the opportunity to find a suitable business mode to turn your popularity into business profits. Using already obtained data and information to develop and provide value added payment services has become a trend in mobile payment industry. As an example of these value added services, FMP provides services that connect the bank cards, credit cards and phone numbers of the users.


A 360 degree customer view


“Only by integrating all the data obtained from various channels and business lines can we truly know the value of those data,”said Yu Qi while talking about the next objective in UMPay’s big data building, “Building data center means systematically integrating information of users’ telecom accounts, financial accounts and locations to develop a single customer view.”    


With the development of internet finance, the accelerated diversification of investment and consumption channels and the gradual decline of those service items on a balance sheet such as traditional loans and trade finance, businesses outside the balance sheet, led by intermediary businesses, are flourishing. For the financial and telecom industries, Yu Qi said, the biggest problem is how to know and keep tabs on consumer behaviors and habits through operations outside the balance sheet. UMPay is in possession of not only the telecom account information of China Mobile users but also the account-linked data concerning consumption, transaction, finance, location, etc, but the problem is that these data and information are dispersed in the company’s various business lines.


Actually,that is also one of the characteristic of mobile internet –“fragmentation.”Fragmentation is vividly reflected in mobile internet, in all of its aspects from time and location to use and application. UMPay actually has a comprehensive catalogue of data resources for it to tap into, but all these data and information are fragmented with the arrival and developments of the age of mobile internet. The company’s future task is to integrate those data for gaining insights into the needs and preferences of individual customers and accordingly developing marketing strategies and services oriented to those individual needs.  


To be able to do that requires the performance of data quality control, said Yu Qi, which means finding the most useful data from a vast data base. But at present, UMPay is still focused on optimizing its services and products, and when better services to its existing customers are guaranteed, the company will look to mine those data, including the customer behavioral data, for business values.

The real challenge

However, to turn data into assets and eventually into business values, the difficulty is obvious. 
For all businesses, big data building requires time, especially in the initial stage, so whether the management can sustain the resulting business pressure is vital to the success of the project. Therefore, managers should have a proper understanding of the role of a data center. “A data center help comb through the operations of every business line and every department, but at the beginning, the value generated by the data itself can be very limited.”Speaking of what he felt about the data building of the past year, Yu Qi said, “but to build a data center to comb through the data from all the business lines allows you to know investment of each department and its effect.” 

However, that doesn’t mean the data department shouldn’t make an effort. In the process of data building, the business departments should develop certain sensitivity towards data, said Yu Qi. In UMPay, in order to prevent the disassociation of technical and business operations, the data center is set up within the marking department and supervised by the marketing director while the technical department is mainly responsible for back-end technical support. “I’m looking forward to having frequent arguments with the marketing director, since a lot of good things come from arguments,” Yu Qi joked. 


IBM helped generate a lot of UMPay’s earlier insights, but as the project draws to a close, the company is now facing the challenge of how to have consistent big data insights and ability in business analysis. In Yu Qi’s view, in order to transform business values through big data, the most important thing is to change the way of management, “The ultimate purpose of building a data center is to change a company’s organizational framework and way of operation to adapt it to the requirements of the market and the times.”


And all in all, this is just a start and there is still a long way to go.

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