An interview with Richard Morecroft, Co-Founder & CEO of JGOO.
As CEO of JGOO, Richard drives the strategic vision of the company. Richard served 11 years in the British army before racking up over 25 years of experience in leading innovation, growth and change in financial services.
Financial IT: Could you please tell us more about JGOO and your background?
Richard Morecroft: JGOO is a new business, providing merchants across the UK and Europe access to the Chinese market, both to Chinese tourists in the UK and China’s online shoppers. We provide payments, marketing and e-commerce solutions to merchants so that they can sell products and services to Chinese nationals, allowing Chinese nationals to pay with their preferred methods – WeChat Pay and Alipay.
Financial IT: That’s really great. Can you tell us about your background?
Richard Morecroft: I’m an engineer and specialize in telecommunications within financial services. I have been working in emerging payments and the financial services industry focusing on solutions for cross-border payments for about 10 years.
Financial IT: Recently your company announced the partnership with Alipay and Wechat. What we can expect from this collaboration?
Richard Morecroft: This allows Chinese nationals to purchase from British and European merchants, with the payment directly taken from WeChat Pay or Alipay. The settlement is done directly via JGOO to the merchant in the UK or Europe. What this means is, we are able to facilitate payments directly between merchants and Chinese nationals. The MasterCard and Visa solutions aren’t available in China, so this is opening up a new way to expedite a commercial relationship between European merchants and Chinese nationals. At JGOO we provide a number of different ways for merchants to take payments, both online and in-store not only using terminals but also using our technical solutions for e-commerce as well. We also offer marketing services on the WeChat app to promote a brands products and facilitate relationships with a brands Chinese consumers, so in that sense we have a multifaceted solution.
Financial IT: Regarding payments, what are the milestones and challenges that JGOO is facing today in the payment industry?
Richard Morecroft: In China WeChat and Alipay are everywhere, so everyone knows about the platforms, and use them on a daily basis. However, outside of China there is a huge educational piece to be done, we are educating the West on new types of payments and how Chinese users trade online.
E-commerce is very different in China in that they use social media much more than European users. In this way, our biggest challenge is education. Educating merchants about the benefits of using Chinese social media platforms, WeChat and Alipay, to build an e-commerce business with Chinese nationals from Europe.
Historically, the perception is that you need to fly to China to trade in China. You need to spend a lot of money to establish your business in China, but that’s not the case, you can do it online. JGOO help companies to grow online trade from the UK.
The opportunity extends as the middle class in China is growing rapidly, along with the wealth of these individuals, who have a big interest in buying internationally. Europe has some of the best products and is known for its quality, particularly luxury products. Europe is a natural trading partner of China. What historically happens is goods are transported from Europe to China and then bought in China’s stores which comes at a very high cost to the business. But now, with the availability of the internet and with the domination of social media and platforms like WeChat, it makes sense for European businesses to collaborate with them even if they’re a small brand. It is the best way to promote businesses to Chinese consumers.
Technology is growing at an exponential rate in China, alongside the growth of the wealthy middle class which presents a new market to sell European products. It’s a huge opportunity, there are more than a billion Chinese people using WeChat Pay and Alipay and more than 50% shop online, making it a very attractive market for European businesses to tap into. That’s why it makes sense for European businesses to attract customers from China. Especially British, French, Italian etc because they are well thought of in China as producers
Financial IT: What we can expect from JGOO? What products will be launched soon?
Richard Morecroft: Our services probably won’t change, but we believe that we’ll see more and more European brands running Chinese operations from Europe. We plan to look for other markets globally, namely the US, which is also a valuable market for the Chinese and middle-east consumers too.
We believe that payments evolve online commerce, which is bringing real-time payments and commerce together. So you have social media, commerce and payments interlinked together. We have started to see this development in places like Facebook. Facebook is now developing a cryptocurrency capability, facilitating international money moving. Thus, social media platforms are now starting to be money movement platforms as well.
Financial IT: Where will the payment industry be in the next 5 years?
Richard Morecroft: I think it’s very interesting. In the west, cards will still dominate for a long time. But we’ll start to see digital payments happening, platforms that allow movement of money without complex structure banks and payments institutes, Visa/MasterCard and so on.
Technologies like Blockchain will allow business systems to move money without payment networks. Overall, a lot of changes are happening and will happen within the payment networks. The technology is changing, for example cash has already almost disappeared in China, another 10 years and cash will no longer exist. So, digital payments will rise rapidly. A lot of changes are coming for the payment industry, for sure.
Financial IT: What is your recommendation for how businesses should succeed to establish their company in this competitive industry?
Richard Morecroft: If you want to be in the payment industry, you need to think about what other services you can provide beyond payments. It is a very high volume and small margin business. Ultimately, this margin will get smaller and smaller, in my personal opinion.