TECHNOLOGY

Amidst Predictions of a Cashless Future, This Singaporean Start-up Is Banking On Good Ol’ Paper Bills

SoCash lets users skip the ATM queue and withdraw money from a nearby minimart

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BY Tanya Mariano - 03 Nov 2017

PHOTO CREDIT: Getty Images

While much of the fintech world is preoccupied with moving towards digital payments, Hari Sivan, a former banker with over 15 years of experience in Asia Pacific and founder of Singaporean start-up soCash, believes the age of cash transactions is far from over.

That he launched soCash in one of the most financially developed Southeast Asian nations is further proof of this conviction. And it seems quite a few people agree: soCash is the first start-up to receive the Monetary Authority of Singapore’s financial sector technology and innovation grant; has recently secured Series A funding from Vertex Ventures; and DBS, Singapore’s largest bank, is joining their network.

“Cash is an uber-efficient payment product compared to the current alternatives like credit cards and wallets,” Sivan says. “[T]ransactions are instantly settled, there are no transaction [or] convenience fees, it is universally accepted, there is no infrastructure required, and [it] doesn’t require training or learning.”

The problem with cash, however, is that circulating it is costly and inefficient.

This is because it runs on a supply chain that hasn’t changed much in the past half century since ATMs were invented, says Sivan. For banks, growing and maintaining a network of ATMs is expensive, and it also makes them less liquid since a lot of cash is stuck in the machines.

His solution? “Crowdsource floating cash in the local economy and channel it to consumers using a technology platform,” he says.

How soCash turns your neighborhood store into an ATM

Simply put, soCash is a cash network powered by mobile devices. It turns minimarts and other small businesses into “cashpoints.” Users simply have to go on their bank’s mobile app, choose a nearby cashpoint, transfer funds to that cashpoint through the app, and head to the shop to pick up the money.

It's a win-win for everyone: users get to skip the line at the ATM and withdraw cash from convenient locations, banks are able to reduce costs and stay liquid, and merchants get increased foot traffic as well as extra income from fees paid by partner banks to soCash.

SPH Buzz, a chain of convenience stores, is one of soCash’s merchant partners. SPH Buzz deputy general manager Spencer Tan is hopeful that the partnership will “boost footfall… from prospective customers coming to collect their online cash orders to regular customers stopping by for purchases,” he says in a statement.

Currently, the service is available in over 600 locations across Singapore, says Sivan. Aside from DBS, Standard Chartered Bank and POSB are part of the soCash network.

Building a stellar team, expanding beyond Singapore

The company’s major challenges these days have to do with hiring the right people. Says Sivan, “As with any early stage start-up, our constraints are primarily in building the engineering and sales talent in Singapore. We are consciously taking our time in ensuring that the core team is built on quality people who have a shared vision in growing soCash to greater heights.”

Sivan plans to scale soCash outside Singapore, with the goal of having a significant presence in other Southeast Asian markets in the next 18 months.

If the numbers from Singapore are any indication — according to data from MAS, cash circulation is growing at 6-7% every year, with the average Singaporean making about three to four ATM cash withdrawals every month — Sivan has reason to be optimistic. The future may be cashless, but that future could be decades away.