Earlier this year, Rajah Chaudry, a former investment banker, founded Paycelerate, a Hong Kong-based invoice discounting platform. The online service matches supply and demand of short-term working capital.

GTR spoke with Chaudry to discuss the challenges and opportunities for a small fintech company in Hong Kong, as well as the city’s position in the regional financial technology matrix.

GTR: What is Paycelerate?

Chaudry: Paycelerate is an invoice discounting platform. We work with large corporates to help them get discounts on invoices that are approved for payment from their suppliers.

We set up this company earlier this year and we’ve just launched the product in Hong Kong. We’ve just signed up our first few clients in HK and are working with a few large corporates to implement our ideas.

GTR: What are the challenges of setting up a small fintech company in Hong Kong?

Chaudry: Hong Kong is a great location and a great place to do business, but the challenges are many and varied. This is not the first business I’ve started. Everything from setting up a bank account to sustaining a business, finding a suitable office with reasonable rent… there’s a lot of challenges.

But Hong Kong affords you a lot of opportunities. You’re in the centre of everything that happens in the Asia Pacific region, which is where we need to be. There’s a lot of large corporates sitting in Hong Kong that have excess cash on their balance sheet that want to earn a better return and banks are not really well placed to service that short-term capital need.

That’s why we find Hong Kong a good place to set up, but there are challenges. The other one would be technical talent: in Hong Kong it’s hard to find. We’ve done okay – we have a good albeit small team of local engineers. In the tech space there’s a lot of activity now and that pool of people is growing slowly.

GTR: Everyone is talking about fintech here – do you feel you fit in with that “scene”?

Chaudry: Yes, fintech is a buzzword at the moment. We definitively fit into the fintech label – we’re a financial company and our USP is technology. The ability to use our platform and scale up the amount of returns you can get as a corporate or as a small business getting financing using our technology is actually the core of what we do.

But you’re right, there are a lot of fintech firms out there at the moment who, in my opinion, are either “fin” or “tech” but not necessarily both. It’s good for the sector that there’s attention both from government and industry. But a lot of the fintech we’re seeing is focused on internal operations for the banks, how to make their ops more efficient. We’re focused on corporate clients so I think we’re a bit more “pure fintech” for want of a better term.

GTR: Do you think Hong Kong risks being left behind by Singapore and other jurisdictions who have made fintech more of a priority?

Chaudry: I think it’s changing: Hong Kong is catching up. I think in some places fintech companies are able to develop because of the government support and Hong Kong is a little different. Hong Kong applies more market forces and lets the market decide, which I think in the long run is a positive. Rather than just giving handouts to small companies and getting them up and running, it lets the market decide which ones are better placed to service the market.

Having said that I think there’s work to be done on the ecosystem. The government is doing more, it’s introducing sandboxes and innovation funds and there are groups that help. But I think a lot of that help is coming at the ideas stage.

And because Hong Kong is a financial hub, it’s very much bank or insurance-centric in terms of the types of companies it supports. What we need to do more is support companies that are past the ideas stage and trying to grow their business. There’s not much in that space – it’s more accelerators or incubators.

And as I mentioned there’s a lack of talent. We need to work with the government to make sure that improves. Hong Kong has lots of things that go with being a tech hub but a lot of it is very early stage. There’s a lot of ideas flying around Hong Kong but, in my experience, ideas don’t make a company – it’s more about the execution and being able to deliver for your partners and shareholders.

GTR: How has the retrenchment of some of the banks from various markets in Asia affected your business?

Chaudry: There’s a lot of talent coming out of the banks. In some ways, it’s actually helped the fintech space in terms of the ideas generated. Banks will always have a place – I don’t think we necessarily compete with banks in what we do. The increase in overheads and regulatory burden on banks are driving their preference for larger clients. They don’t want to do short-term stuff. We’re trying to help companies with their working capital, whether they’re large or small. I think banking’s challenges in general probably benefit us.