SINGAPORE -- A Singapore startup recently raised $6 million to keep Singapore and perhaps other Asian nations from falling prey to the global cashless payments steamroller.
soCash is also out to make ATMs unnecessary. Its app allows users to make bank account withdrawals at shops, cafes and grocery stores. The company claims receiving money from merchants is safer than going to an ATM, where pin codes can be skimmed. It might also be easier to find a soCash partner than an ATM since the app points users to the closest pickup point.
The $6 million came in July from Glory, a top Japanese maker of cash-handling machines, as well as from other parties. Founder and CEO Hari Sivan said soCash hopes to receive support from Glory when it takes its business to Japan.
In Singapore, the company has enlisted 1,400 convenience stores and other retailers to offer the service. Once a user makes it to the closest partner shop, receiving cash is a QR code scan away.
Since launching the service in March 2018, soCash has attracted some 120,000 users in Singapore, which has a population of 5.6 million. The service is used more than 200,000 times per month.
Although payment tools have become diversified, cash remains an effective means of making fee-free payments, Sivan said. Now his company is promising to reduce the distribution costs associated with cash and make the bank note a more efficient means of payment.
While soCash is going against the cashless grain, it is also filling a void as the number of ATMs decreases around the world, especially in advanced economies. Singapore is no exception.
Shops that have introduced the service benefit because the cash they hand out to app users is immediately replenished with a deposit into their bank accounts, lessening the burden of handling cash, according to soCash.
The company plans to soon enter Indonesia and Malaysia. It also plans to expand the services available via the app to small-lot loans and local currency withdrawals for tourists.
Although soCash continues to attract more users, it will have a difficult time breaking into countries like China, where consumers are smitten with the ease of making cashless payments.
As soCash pushes into new markets, it will offer clues as to the maturity of nations' payment systems.