Banks, fintechs, PSPs, e-marketplaces and enterprises with international payment needs are using Nium’s payments platform to improve efficiency, reduce costs and enhance customer experience. Robin Arnfield talks to Frederick Crosby, Nium’s chief revenue officer
The growth of e-marketplaces and the gig economy have created a need for fast, efficient and low-cost cross-border B2B payment services. Existing bank-operated international payment services are often slow and expensive.
Companies such as Nium, dLocal, Earthport, Payoneer and Rapyd provide businesses with the ability to quickly enable and upgrade cross-border pay-in and payout services for their customers, employees, and suppliers.
Instead of developing their own payments platform, banks, PSPs, fintechs and enterprises can use APIs or web interfaces to integrate with Nium’s global payments infrastructure. This enables them to offer customers access to low-cost remittances and collections at interbank rates as well as real-time transaction tracking. Nium also provides services such as end-to-end Visa debit card issuance and e-wallet accounts.
Faster, cheaper cross-border payments
“Banks see the challenges that digital pure plays are providing, taking away key parts of their business,” Crosby tells EPI. “They look to nimble payment platforms such as Nium to help them stay relevant with digital customers and provide them with faster, cheaper cross-border payments for both consumer and business needs.”
“We help banks improve their cashflow economics in terms of time and cost by introducing new technologies,” he says. “For example, some neobanks don’t know how to offer international payments, and incumbent banks may have been using slow and archaic cross-border payments rails.”
Nium’s B2B platform is modular and scalable, acting as a single connection to bridge gaps in the global financial infrastructure. It provides services that Nium clients offer to their end users, said Crosby.
Nium is able to send money to 90 countries in 63 currencies, and 60% of its transaction volumes involve real-time payments through its connection to domestic instant payment schemes in 65 countries. The company’s network of partners mean customer transactions are treated as local ACH and wire payments rather than international transfers, helping keep FX costs low, Crosby adds.
Nium provides white-labelled global remittance services to regional and smaller banks, neobanks and PSPs. Currently, it works with 40 banks around the world including four of the top 10 banks in Southeast Asia; the UAE’s Mashreq Bank; Thailand’s KasikornBank; El Salvador’s Banco Hipotecario: and Mexico’s Accendo Banco. However, as Nium has expanded into other client segments, banks now represent a small part of its customer base.
Licensed in Australia, Canada, the EU, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, the UK and the US, Nium began life as InstaReM in 2014. The company rebranded as Nium in October 2019, retaining the name Instarem for its consumer-facing digital remittance service. Instarem operates over Nium’s core payments platform.
A one-stop advanced global payment platform
“We realised that the platform has the potential to serve many different use cases beyond P2P remittances such as the travel sector, e-marketplaces, card issuance, provision of e-wallets, and any business sector involving international payments.” Says Crosby. “Our aim is to become a one-stop advanced global payment platform for our customers, which is why we’re building a network of licenses, payment nodes, partners, and banking relationships.”
The fact that Nium operates the Instarem consumer-facing remittance service helps it win B2B contracts. For example, the Singapore government commissioned Nium and its partner Aptiv 8 to launch a remittance service for migrant workers in Singapore to send money back home, which was launched in December 2020.
“We get customer feedback from our Instarem consumer service which we can incorporate into our core Nium platform. “People say to us: ‘you know what you’re talking about because you’re not just a software provider but have a real-world service of your own.’ In return, Instarem can grow through the expanding array of financial service products that Nium offers.”
In April 2021, FX provider Travelex announced a partnership with Nium to provide digital remittance services to its users. Already live in Australia and Singapore, the Travelex International Money Transfer service will be expanded to the rest of Asia soon. The service uses Nium’s global network and real-time payment capabilities, enabling Travelex users to remit money to over 50 markets across the world almost instantly.
“Travelex is a global player, but they lacked digital expertise,” says Crosby. “These days, instead of building your own digital remittance platform, you can use someone like Nium as a remittance-as-a-service provider. Because of our global capabilities and licences and our ability to rapidly integrate with Travelex’s business, we were able to launch the new service with them very quickly.”
Nium provides debit card issuance services to banks, fintechs, travel services companies, and corporate clients for use cases such as payroll, gig economy payouts, employee travel/expenses, rewards, and real-time spend management. Its plastic and virtual cards allow users to hold multiple currencies in a single account. According to Crosby, card issuance is Nium’s largest source of new clients.
In June 2020, Nium became a Visa issuer in Australia as part of its membership of Visa’s Fintech Fast Track program. The following month, Nium launched its Visa card issuance platform in Europe and the UK.
Visa made an unspecified investment in Nium in May 2020 as part of the fintech’s latest funding round. According to the Australian Financial Review, Nium has received $100m in funding to date.
“Our cards can offer just-in-time payments for a single use case and can then be suspended until they are ready to be used again,” says Crosby. “Companies are lining up to issue cards as they are highly trackable and easier to administer, and it’s easy to turn cards on and off as needed. In certain markets, we also offer card-to-card transfers through Visa Direct, which is becoming an in-demand service.”
Another important sector for Nium is international B2B transfers and collections. The company provides local pay-in and payout for the travel sector, the gig economy, e-marketplaces, and any business with a dispersed clientele that they need to make payouts to and receive funds from. “The travel sector is a big area for us. For example, we provide international payment services for airlines, hotel chains, and traveltechs. We’re seeing a lot of activity as firms prepare for the next big wave of travel that will occur following the lockdown.”
Fintech is a key opportunity for Nium, especially with the rise of open banking in Asia, Australia, the UK and the EU. Across Asia, there are various government-led initiatives to encourage financial data sharing such as India’s Account Aggregator framework and the publication by the Monetary Authority of Singapore of an API Playbook to encourage banks to open their services.
“This is creating a plethora of new means to leverage payments for different use cases where businesses want to collect and send payments. In the UK and the EU, we leverage open banking APIs to connect with our clients.”
Nium is very big in Asia-Pacific, as it started out in that region, but this shifted in 2020 due to COVID-19. “Consequently, Europe is now our strongest market. We’re taking advantage of PSD2/open banking and our electronic money institution licences in the UK and Europe.”
Nium has recently expanded into Africa, Latin America and the Middle East. In March, Nium announced that it now offers transfers to bank accounts and mobile money accounts in Ghana, Kenya, South Africa and Tanzania through partnerships with banks, mobile wallet providers and PSPs in those countries.
“Latin America is really heating up, so we’re putting more staff into that region to take advantages of opportunities there from banks and enterprise clients,” says Crosby. “There is a lot of need by international vendors, for example, to move money to North America from Latin America, as well as demand for travel-related payments. We’re also starting to set up some large deals in the Middle East, and there is a large amount of demand for cross-border transfers in that region.”
Nium grew nearly three-fold in 2020 compared to 2019, and in 2021 is focusing on expanding in the US and Latin America, according to Crosby. “Globally, Nium’s expansion strategy aims to increase our capabilities and services through product innovation and new payment corridors and markets, as well as growing our currency offerings.”