Singapore start-up SoCash wants consumers to be able to obtain cash wherever they may be, especially if there is no ATM in sight.
It has developed software, now in test phase, that enables small retail stores to become “cash points”. The system does not compete with banks, but supports them, say the developers.
SoCash is plugged into the mobile apps of banks, so people wanting to withdraw cash simply place an order on the SoCash module, choose a merchant and pick up the cash. SoCash notifies the merchant and pays them a fee once the transaction is complete.
In the background, SoCash transfers the amount from the customer’s bank account to that of the merchant. This way, there is no need for an ATM, and it is secure as the transaction happens within the bank’s app (SoCash also earns a fee from the bank).
Deposits as well
SoCash is also looking to offer deposits using the same concept – the customer gives cash to the store, SoCash deducts the amount from the store’s bank account and credits it to the customer’s.
“Banks love us because we solve a real customer pain – easy access to cash,” says SoCash co-founder Hari S. “Small merchants love us as they don’t need to deposit cash in the bank. It is done automatically and they get paid for it.”
He says his company is building a large network of small merchants. “They are closest to the consumers, and it means we are building the last mile for practically any service that can be controlled via software.”
First showcased at Tech in Asia Singapore this year, SoCash has just raised US$297,000 in seed funding from unnamed angel investors. It will use the money to accelerate product development and build an initial network of 1000 cash points in Singapore.
Hari says the company is working with multiple banks on launches in Asia and the US.
“Most likely, the first commercial implementation should happen in Singapore in November or December. The target is to have 5000 cash points by December next year.”
Hari says SoCash offers banks a cheaper alternative for delivering cash to clients than ATMs.
His company estimates that Singapore banks together spent more than $80 million last year to maintain ATMs, including rental, power supply, and armoured trucks and security service to load the cash.
He says SoCash’s value is to offer a self-propagating network where banks can connect to gain distribution scale at no capital expense.
Hari, who previously worked for Citibank and HSBC, says he and his co-founders conceived the system while wondering why mobile wallets and payments had not really taken off despite the millions of dollars being invested in them.
“That’s when we realised that cash is actually very efficient. The problem is the supply chain.
“The last node of that supply chain is the ATM, which is expensive, inefficient, and over-engineered hardware. We realised we can ‘deconstruct’ the supply chain and convert each shop into a micro cash-processing centre.”
Citing data from central banks, Hari says the use of cash has grown globally over the past five years – by 9 per cent in Singapore, nearly 8 per cent in the US and 6 per cent in Australia. A MasterCard study has claimed that cash still accounts for 85 per cent of global consumer transactions.