Payment News

Socash to be Acquired by Nium

Socash, the Singapore-based technology company with an app that connects consumers and merchants so that consumers can deposit, withdraw and make payments with cash at the point of sale in shops, has signed a definitive agreement to be bought by Nium. The acquisition is expected to complete in Q3 2022.

Nium, also Singapore-based, plans to combine Socash’s solution for local payment acceptance with its global platform for money movement. Nium links banks, payment providers and businesses, whatever their size, to global payment and card issuance solutions. It operates in over 190 countries in more than 90 currencies.

The acquisition of Socash allows Nium to accept cash for online transactions which is particularly important in emerging markets where cash is preferred, for example across Asia Pacific and the Latin American markets.

When compared to current in-app payment costs, Nium estimates Socash saves up to 30% 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.

Cryptocurrency Thefts Increase Dramatically

The FBI has said that the theft of 173,600 ether tokens and 25.5 million USD Coin tokens worth over $540 million from the Ronin blockchain network was the work of the Lazarus Group, a hacking team run by the North Korean government.

MIT Technology Review says this is one of eight crypto related thefts worth over $100 million in the last year. $4.3 billion of cryptocurrencies were said by Crystal Blockchain, a crypto risk assessment specialist, to have been stolen in 2021, and this was six times more than in 2020.

Attackers exploiting DeFi protocols allegedly accounted for around $1.4 billion in losses, while the $2.3 billion were lost due to fraudulent activities.

The biggest theft to date is from Poly Network in August 2021 of $610 million, although the hackers returned most of the money, claiming their goal was to expose security risks.

Two information transfer platforms were hacked for substantial sums of money. Wormhole in February 2022, where ether tokens worth $326 million were stolen, and the crypto trading platform BitMark with $196 million lost. In both cases users were compensated by the platforms.

Challenges of Mobile Transactions

Rwanda has seen the use of mobile transactions increase dramatically. While the number of subscribers only increased from 4.7 million to 5.1 million in 2020-2021, the number and value of transactions has increased significantly. By 2021 the value of transactions as a percentage of GDP has risen 102.5% in the last five years.

The population is, though, price sensitive. MTN Rwanda re-introduced a 0.5% commission on payments received by merchants and businesses in September 2021. The result was a sharp drop in the monetary value of transactions, mainly in person-to-business transactions.

At about the same time, the central bank scrapped the push and pull charges between mobile wallets and banks, in August 2021, and the result was a big increase in the volume of transactions between wallets and bank accounts.

In order to encourage the use of digital payments, the government and telecom operators have worked together to distribute smartphones to address the low level of digital devices in the community.

An interesting example that highlights two of the challenges of introducing mobile payments.

More POS Payment Innovation

Dapio, formerly known as Paymbo, has raised $3.4 million from Flutterwave and Techstars, African payment companies.

Dapio has developed software that allows Android phones to work as contactless payment terminals. It works with point-of- sale vendors, banks and others to integrate its technology into merchant offerings. This funding allows Dapio to offer its app to UK and European merchants.

Another example of payment innovation enabling low infrastructure cost solutions.

CoDi versus and Pix

Mexico’s CoDi payment system has been in place for two years. Out of a population of 130 million people, only seven million are registered users.

Launched in 2020, in Brazil over 500 transactions are processed through Pix every second, about 40 million per day. 117 million people have Pix accounts. As a result, monthly transactions on Pix are worth $140 billion compared with roughly $0.16 billion spent through CoDi since its inception.

A recent article by lendacademy.com ¹ looked at why the two systems are developing so differently, including where they started from, the design of the systems and the support given to the systems.

Branch Sharing Hosted by Building Society

We have reported in the past about the Newcastle Building Society opening new bank branches. It continues to go against conventional wisdom by using technology to allow people and businesses from the UK’s major banks, its competitors, to withdraw and deposit cash at is high street branches.

The building society trial is in two sites with multi-bank transaction terminals enabled with Glory cash handling technology and the OneBanks Hub software platform, sitting alongside its existing services. These will allow customers to access their account irrespective of who they bank with. The terminals provide access to all banks on the Open Banking network.

The first terminals will be fully operative later this year.

Children Slowly Moving Away from Cash

Research by Halifax, part of one of the UK’s four big banks, Lloyds Bank, shows a slight decline in the number of children who save cash at home – down from 80% in 2019 to 72% in 2021. 31% of 15-year-olds could not identify the lowest denomination coin, the one pence coin. Perhaps surprisingly, 28% could not identify a £10 banknote.

The number of children with bank accounts has not changed, staying at 35%, but those receiving pocket money into their bank accounts increased from 19% to 23%. The use of cash decreases and bank accounts increase in line with age.

University to Deliver Sustainability Training to Bank Staff

NatWest, owner of the Royal Bank of Scotland and Ulster Bank, is to partner with Edinburgh University over three years on a climate education and training for the 16,000 bank staff.

The university’s Centre for Business, Climate Change and Sustainability will deliver a 12-week online education programme to relationship managers and others in priority roles. The aim is to enable them to help business customers identify the opportunities a net zero economy can create and to become more sustainable operations in the process.

1 - Why has Pix done so well while CoDi has struggled? – LendIt Fintech News (lendacademy.com)