Nium acquires the Singapore-based alternative payments network Socash to unlock digital commerce payment acceptance across Asia’s emerging markets.
The payment and card issuance provider has signed a definitive agreement to acquire Socash, a consolidated network of financial institutions and digital commerce merchants that enables consumers to deposit, withdraw and make payments with cash from more than 30,000 local shops, cafes and grocery stores.
The acquisition provides Nium with the team and technology to enable multiple forms of local payment acceptance for digital commerce, especially in emerging markets.
Cash is still a preferred method of payment across the Asia Pacific and Latin American markets. Taking Japan as an example, the country has shown huge promise in the adoption of some areas of fintech, especially as a pioneer of non-fungible tokens (NFTs). However, the land of the rising sun remains true to its cash roots, with some figures suggesting that the country’s adoption of paytech was significantly behind that of its neighbours.
Japan was once even described as ‘the world’s most dedicated cash-hoarders‘ by Reuters, and it’s evident that Nium will have a lot of work ahead of it if it’s to penetrate Asian societies that hold traditional payment methods close.
The acquisition will combine the local acceptance, multicurrency accounts, foreign exchange and global payout capabilities of the two parties, propelling Nium and Socash into potentially becoming the full-stack, platform-of-choice for global merchants.
The acquisition is expected to close in Q3 2022, subject to customary regulatory closing conditions.
“The Socash team has built an impressive platform that bridges payments in the digital space with payouts in the physical world,” said Pratik Gandhi, co-founder and COO of Nium.
“When compared to current in-app payment costs, we estimate Socash saves up to 30 per cent in commissions paid. With this acquisition, Nium can offer a lower-cost payment processing alternative for digital merchants, spanning local payment acceptance through to global payouts.”
Alternative payment methods (APMs), including e-wallets, real-time bank transfers, and electronic cash have seen a surge in growth globally as an easier way to transact online.
According to the World Bank, 45 per cent of global consumers already use a mobile wallet, versus 18 per cent of consumers who rely on credit cards for payments – online and offline.
Cash acceptance for online transactions, from bill payments to in-app purchases, is still a popular use case, especially for 1.7 billion people who the World Bank estimates remain unbanked.
This acquisition has the potential to cultivate a more inclusive financial system, where global consumers are given the power to pay as they choose. Whether Nium choose to leverages that potential remains to be seen.