soCash, a Singapore-based fintech startup, has snatched a seed round of $400,000 to become the ‘last mile’ for banking services and ecommerce. The startup will release an app aimed to connect small shops into a scalable network for cash withdrawals as part of a product roadmap that is aimed at working with banks to extend cash distribution beyond ATMs.
The proceeds from global angel investors will fund the acceleration of their product development and expansion of their network to 1000 ‘cashpoints’ within the city-state.
In Singapore, demand for cash is growing at 9%.
“Contrary to the prevalent narrative, data from central banks show that cash usage is growing globally. Consumer preference poses an expensive challenge for banks to meet this increase in demand for cash. soCash’s platform is a superior digital alternative for efficient access to cash,” said Rekha Hari, Managing Director of soCash.
The company claimed to be at various stages of engagement with leading banks in Asia and the US to integrate the software into their digital banking platforms.
“Our business model – transaction fees and network monetization. soCash is significantly cheaper than ATM transaction, so banks pay us a transaction fee, which we share with the cashpoint. As we build our network of cashpoints across cities, we are building a last mile capability to banks and ecommerce companies, ” said Hari.
“Our pitch to banks is this. For large banks with existing ATM network, we can offload 25% of their ATM volumes, especially in residential areas. For banks betting on fully digital banking models, our pitch is to make cash ubiquitous via soCash platform rather than investing in their ATM infrastructure,” she added.
The company will be expanding the venture to either Hong Kong or Malaysia, with long-term plans to expand to India and Indonesia once they have sufficient critical mass.
A version of this appeared in Deal Street Asia on July 10. Read the full article here.