Startup Offers Bank Cash Points as ATMs

A Singapore fintech turns brick-and-mortar shops into alternative ATMs, potentially saving banks millions of dollars in maintaining their cash logistics. Banks can now tap on SoCash’s apps and existing brick and mortar point-of-sales to save on the huge costs associated with maintaining ATMs and the physical circulation of cash.

So let’s say there are 3,000 ATMs in Singapore and they hold anywhere between S$150,000 to S$200,000 overnight. That’s a minimum of S$450 million of liquidity that is stuck in these machines, says SoCash founder Hari Sivan.

The inefficiencies of leaving cash in ATMs has been bugging Singapore’s banks, which typically spend $200 million a year on ATM maintenance, logistics, insurance, counting and cleaning cash, and other expenses just to maintain the circulation of physical cash, the fintech firm estimates.

With SoCash, banks pay only a transaction fee and a platform fee. Currently, banks using SoCash’s service include DBS, POSB, Standard Chartered and ICBC. With cash points set up in 1,300 locations in Singapore, the startup processes close to 200,000 transactions per month.

Retailers are paid a fixed fee per transaction by SoCash, letting them tap on the store’s pool of cash earnings to generate a revenue stream while saving themselves the hassle of having to deposit their cash earnings at a physical branch, Sivan explains.

This cash withdrawal service also helps the participating shops to generate walk-ins and push in-store promotions on the app’s platform.

Once a user opens the Socash app, scans a QR code and inputs the withdrawal amount,  he or she can collect the cash from the cashier at a chosen cash point, such as a 7-Eleven. The user’s bank account is then debited while the retailer’s account is credited by the participating bank.

Sivan, who spent about 13 years in the banking industry, is planning its Series B fundraising round in the next few weeks.