By Robert Hackett
November 29, 2018

Zhang Zhenghua believes a revolution is under way.

The founder and CEO of UNPay, a Singapore-based payments startup, sees economic disruption coinciding with the worldwide adoption of mobile phones. This new paradigm is upending traditional banks and paper money, Zhang said.

“Today the financial industry is going through an upgrade,” Zhang said on stage at Fortune‚Äôs Global Tech Forum at the Four Seasons Hotel in Guangzhou, China, on Wednesday. (See the video livestream here.) He described the dawn of a “fourth era,” saying “the entire world is embracing digital wallets and right now the leading country is China.”

Prior to starting UNPay, a network for connecting payment providers that aspires to become a latter-day Visa, in 2017, Zhenghua led Baidu Wallet as its CEO for five years. Before that, he spent seven years at Alipay, where he helped create a popular virtual assistant for consumers.

Explaining the benefits of digital payments, Zhang said they make information easier to manage and thus “efficiency will be higher.” He noted that “you have to respect data privacy and security.”

Felix Zhang, founder and CEO of Bairong, a financial analytics provider based in Beijing, spoke alongside Zhang on the panel, titled, “Who needs cash anyway?”

Felix Zhang divided the fintech industry into two areas: products versus infrastructure. He recommended that startups should pick and pursue only one of these subdivisions.

“Some companies should focus on designing good financial products and some other companies should focus on designing the infrastructure,” Felix Zhang said. “You should have a clear division of labor.”

In cases where a business does not enforce a clear separation, “you’re forced to play the role of both athlete and umpire,” Felix Zhang said. This situation is bound to put a company at odds with itself, creating conflicting sets of incentives; for example, acquiring customers versus cracking down on potential fraudsters.

Bairong, Felix Zhang said, focuses solely on infrastructure. “We only help financial institutions judge and assess each transaction,” he said, thereby helping to root out fraud.

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