Airwallex launches investment product to help businesses grow idle cash

SINGAPORE - Fintech firm Airwallex has unveiled a new investment product aimed at helping businesses earn returns on unused funds, entering a competitive market where rivals also court companies seeking better yields on spare cash.

Rolled out on July 28, the product invests in money market funds (MMFs) and offers returns of up to 1.29 per cent per annum for Singapore-dollar funds and up to 3.84 per cent for US-dollar funds.

The new Airwallex Yield product is aimed at small business customers or customers on Airwallex, said Mr Arnold Chan, Airwallex’s general manager for the Asia-Pacific excluding China.

“Airwallex Yield will allow businesses to earn returns on their surplus Singapore-dollar and US-dollar funds by investing through investment-grade money market funds, while maintaining access to both liquidity and control over their cash,” he told The Straits Times.

An MMF invests in a range of liquid, low-risk assets, which typically include cash and short-term instruments such as treasury bills, commercial paper, and certificates of deposit.

Airwallex’s yield product invests in several Goldman Sachs and Fullerton funds.

The Singapore launch follows earlier roll-outs in Australia and Hong Kong. Since its November 2023 debut in Australia, the product has attracted about US$200 million (S$257 million) in funds.

Airwallex offers a suite of financial products for businesses, including global business accounts, cross-border payments and expense management tools. The firm said it is seeing a huge demand from customers in Singapore who want to earn returns while maintaining flexibility to move funds quickly.

Over 80 per cent of its annual revenue comes from customers who use more than one Airwallex service and the firm expects to cross-sell the new product to its existing customers.

The firm also plans to target technology companies, especially those backed by venture capital and holding substantial idle cash reserves, as well as e-commerce players and retailers that receive customer payments upfront but pay suppliers later.

By investing these interim funds, they can generate additional returns.

Trading businesses involved in importing and exporting can also benefit by putting their idle cash or working capital to work, said Mr Chan.

He added that withdrawals are flexible and settlement is typically completed within one business day, provided that cut-off times were met.

Airwallex joins a competitive field in Singapore, where firms like StashAway and Syfe already offer MMF products to businesses seeking returns on idle cash with flexible access. Most MMFs in Singapore invest in fixed deposits, government securities and commercial papers.

Airwallex customer GlobalTix, a ticketing software and distribution platform for the tourism sector, said that it considers flexibility, liquidity, tenure and yield as key factors when deciding how to deploy idle cash.

GlobalTix’s co-founder and chief operating officer Chan Chee Kong said fixed deposits are less suitable for the company because they tie up funds for a set period – limiting access when quick payments to suppliers or vendors are needed.

“I need to have that flexibility around moving my funds in and out,” he said.

Another key consideration is managing different currencies given the global nature of the firm’s business, he added.

He noted that Airwallex is not the first to offer the solution, adding that GlobalTix currently uses a similar offering from a competitor.

However, if GlobalTix were to use Airwallex’s new offering, it would benefit from having all its financial tools on a single platform – making it easier to monitor and manage its cash flow, he said.

Lovet, a home-grown fashion brand and Airwallex customer, is considering the new yield product, its director Lee Wei Leong said.

With interest rates declining, he said the company is exploring options. “If we leave our money in a normal savings account, the value of the money is going to be eroded by inflation.”

As a small and medium-sized enterprise without venture capital backing, liquidity is key. If Lovet were to open a new outlet, it will need to be able to cash out quickly to fund the expansion, he added.