Insiders Reveal the Key Reasons Behind Razer Pay’s DemiseAugust 20, 2021 0 comments
When there are too many holes on a ship, plugging one does little – water continues flowing in from the rest. Over time, these holes collectively bring down the ship. When Razer announced last week it was suspending its e-wallet service Razer Pay, one cannot help but wonder if that was the case.
When contacted, Razer Fintech’s CEO Li Meng Lee noted that the “Razer Pay e-wallet app was concepted as a testbed for Razer Fintech to better understand the e-wallet and scheme card ecosystem in Singapore and Malaysia.”
The announcements plastered across various publications seems to indicate that despite it being a 3-year endeavour, Razer considers RazerPay to still be in “beta mode”.
One ex-employee revealed that they were shocked to learn that the e-wallet was still in beta mode remarking that,
“This is news to me, all this while none of knew we were working on a beta project.”
Launched out of Malaysia 3 years ago, Razer had grand ambitions to leverage its gaming community and build a suite of fintech solutions for them. Grab, Gojek and Sea Group have shown that fintech can be a lucrative play when complemented with a large ecosystem. While all three have secured digital banking licenses, Razer was left without one and had to play catch up.
Digging deep into the reasons behind Razer Pay’s demise, we uncovered deep-rooted issues within the organisation which seemed to have sowed the seeds for failure long before last week’s announcement, at least according to many of the former employees that we spoke to.
There seems to be a common theme to what the former employees believe to be the ultimate downfall of Razer Pay — poor leadership.
It was alleged that the top brass within Razer did not have the necessary expertise to run an e-wallet business.
While they have hired local leaders to build their e-wallet business in Malaysia, our sources indicated that there were often friction and a lack of trust between the top brass and the local leadership team. An ex-employee remarked,
“They don’t have enough confidence in the local team, they believe that only they will be able to pull it off”.
This friction, they said, led to a lot of instability in the short span of 3 years, we were informed that there have been 3 changes of CEOs in Razer Fintech before the role ultimately landed on Li Meng who is also the Chief Strategy Officer of Razer on the group level.
Former employees revealed that the constant change of CEOs was chaotic and made it very challenging for them to focus on their mission of making Razer Pay a more ubiquitous e-wallet.
A toxic work environment and high turnover
Perhaps a by-product of what ex-employees described as poor management, they also found the work culture in Razer Fintech to be very toxic. One ex-employee even went so far as to describe the COO as a “slave driver” and that employees often faced stress-induced medical issues.
We were informed that 4 employees were overworked to the point of hospitalisation, one of which allegedly puked blood from a perforated stomach ulcer due to stress.
A previous report by Otaku seems to support the notion of a toxic work environment within the Razer group, the report cited the claims of former employees that CEO Min-Liang Tan had developed a reputation as a tempestuous, volatile boss.
Former employees, we spoke to also alleged that because of Min-Liang’s lack of experience within the financial services space, his expectations were often warped. They said that employees were often pushed into a corner to deliver projects which would typically take months in weeks — which lead to subpar outcomes.
Several ex-employees also alleged that the senior management spent to too much time trying to impress the top brass instead of delivering results. One ex-employee remarked,
“A successful startup should focus on delighting customers with their product. Razer Pay is focused on pleasing Min and dealing with Li Meng.”
We were told that this work environment led to very high employee turnover, by September 2020, nearly half of the staff had resigned.
Responding to these allegations, Razer offered the following statement,
“We value our talents and we have a comprehensive employee engagement programme that welcomes and addresses feedback internally in all our global offices. We encourage any of our staff to reach out to their respective managers and HR teams if they have any issues.”
Finding a footing in a cutthroat space
E-wallets are notorious for their low margins and platforms compete aggressively by undercutting each other through cashbacks and promotions. Often, the e-wallet with the largest war chest would emerge as the winner.
While other e-wallets were out there dangling goodies to acquire users, Razer Pay seems preoccupied grappling with internal issues. At its peak in 2020, we were told that Razer had only 30,000 monthly active users and roughly 10,000 merchants, most of which were part of the Berjaya ecosystem. If true, it is a far cry from some of its other stronger contenders in this space.
Ex-employees also cited misplaced priorities on “vanity projects” as a reason why Razer Pay fell behind its competitors,
“For them it’s a spin, everything is about the spin”.
They lamented that Min-Liang had unrealistic expectations about their “#RazerForLife” free mask campaign. In Malaysia where they were expecting to give out 5,000 masks per month, they ended up only giving out about 100.
Meanwhile, in Singapore, we were told that they have produced 5 million masks for Singapore’s 4.89 million adult population. Many of which, as we understand went undistributed and Razer Fintech ended up absorbing the cost.
Another former employee revealed that when Razer was bidding for a digibank license in Singapore, they shifted the fintech headquarters from Malaysia to Singapore.
With that switch, much of the company’s focus and resources went to Singapore. When the dust settled on the digibank licenses and Razer was unsuccessful in securing one, the gap between Razer Pay and its competitors became too big to close, we were told.
What’s next for Razer Fintech?
Overall, the demise of Razer Pay seemed to be the culmination of a multitude of factors. When combined, it created a gaping hole that was likely impossible to patch. As the sun sets on Razer Pay, Razer Merchant Services will now be the centerpiece of Razer Fintech.
Li Meng said to Fintech News Malaysia that with end of the “Razer Pay Beta programme” they have gathered a significant amount of user feedback that will help them with future launches.
He maintains that Razer Fintech still remains as a business with solid fundamentals and that they continue to be “one of the largest digital payment networks in SEA” and they expect a high double-digit percentage year-on-year growth in the first half of 2021.
*The views of the author do not represent the views of the publication
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