5 questions with SoCash

Fintech firm SoCash provides a digital cash management platform for banks. The first recipient of the Monetary Authority of Singapore's financial sector technology and innovation grant, it raised US$600,000 from angel investors recently. It aims to accelerate the commercialisation of its service. Sabrina Theseira speaks to its founder Hari Sivan.

Studies show that $300 million to $400 million worth of cash is being held in ATMs, uncirculated, says SoCash chief executive officer, Mr Hari Sivan.
Studies show that $300 million to $400 million worth of cash is being held in ATMs, uncirculated, says SoCash chief executive officer, Mr Hari Sivan. PHOTO: SOCASH

Q What is SoCash and how does it work?

A SoCash is a Singapore-based financial tech start-up which allows users to withdraw cash anywhere by turning small businesses into "cashpoints". The technology plugs into the mobile apps of banks.

Users place an order on SoCash within a bank's app and select a nearby merchant. There, the user picks up the cash and the app deducts the selected sum from the customer's bank account, without the need for a machine, card or PIN code.

Banks pay SoCash a transaction fee which the company then shares with the cashpoint.

Transactions are 25 to 40 per cent cheaper than conventional ATM transactions as people do not have to pay for them unless the bank decides to charge them.

The process is very safe as everything is done electronically.

Q When did you start SoCash and what inspired you to do so?

A SoCash was set up in May 2016 as a more convenient alternative to ATMs. I was previously a banker at Citibank and HSBC, and I always wondered why mobile wallets and payments never really took off despite the millions of dollars being invested in them.

Locally, cash is very relevant; an average of 20 million cash withdrawals every month worth $5 billion take place, despite the many cashless modes of payment available.

The problem lies with the inefficiency of the cash supply chain which is expensive and consists of over-engineered hardware.

That's when we realised the need to "re-engineer" the supply chain and convert each shop into a cash-processing centre connected to our software network.

Q How does this benefit merchants and the economy as a whole?

A The installation of SoCash in mini-marts provides a marketing platform for these small shops. More people walk in, increasing their productivity.

For the economy, SoCash increases access to cash, which can then be lent out for loans and businesses, increasing productivity.

Studies show that $300 million to $400 million worth of cash is being held in ATMs, uncirculated.

Which is why we proposed earlier last year that large banks offload 25 per cent of their ATM volumes while fully digital banking models invest in SoCash instead of an ATM infrastructure.

Q What are some of the challenges you have faced?

A The main challenge arises from the fixed mindsets that banks, individuals and some shops still possess.

Certain banks and "first-generation" shops are reluctant to adopt us as they are more comfortable with the traditional ATM structure.

Despite paying the market rate, it is also difficult to recruit people with the right skills. I feel it is because young people view start-ups as too risky.

Competition for talent with larger, more established multinational companies, such as Google and Facebook, is also fierce.

Q What are your plans for the future?

A We want to focus on building technology platforms and user scenarios that are at the intersection of physical cash and electronic payments. This will take about 12 to 15 months on the engineering side.

Our product roadmap will span the spectrum of cash; we will cover withdrawals, deposits and conversion.

Right now, we have established our presence in India, Japan and more. We started with $50,000 and have managed to raise US$925,000 (S$1.3 million) in funds from investors.

With the funds, we intend to bring onboard a sales team to close deals faster and accelerate our bank network growth to gain transaction share across markets, starting with Asia.

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on April 11, 2017, with the headline 5 questions with SoCash . Subscribe