Michael Bermingham, co-founder and chief business officer of Nium, shares how the company has evolved its business model across retail and enterprise cross-border payments as well as its recent partnerships to drive future growth.
Michael Bermingham drives the business strategy, partnership and operations of Nium (previously known as InstaReM), a Singapore-based cross-border payments fintech. He has two decades of experience in the industry. Prior to co-founding InstaReM, he was the director of Gain Capital in Australia.
He launched InstaReM in 2015 to make international money transfer easier. Initially, the company focused on consumer and businesses remittances. It rebranded itself as a payments platform “Nium” in 2019, and since then has expanded its reach to 130 million end users across 90 countries.
Nium has raised over $60 million in funding till now, including $41 million in series C funding in March 2019. The company has been expanding its enterprise business services recently. In this interview, Bermingham shared details of their recent partnerships, “remittance as a service” offerings and future plans.
Here is the full transcript of the interview:
Neeti Aggarwal (NA): Tell us how Nium has evolved its business model and what are the key reasons for this.
Michael Birmingham (MB): When we first started as InstaReM back in 2015, we concentrated on consumer remittances and providing services to businesses. Over the past five years, our product has expanded, and now we are a global financial technology infrastructure platform. We are redefining the way consumers and businesses send, spend and receive funds across borders. We are always continuously innovating to provide the most relevant and agile solutions to meet the needs of consumers and businesses. We started as a licence company sending funds cross border, now we provide a full stack of products under Nium.
Nium offers payment services across businesses and retail customers
NA: You have different payment products. What are the key market segments that you are currently focusing on?
MB: We have different segments. We concentrate on the banking and financial institution side with our enterprise business, as well as a different variety of sectors, such as aviation, maritime and travel. A lot of those companies that utilise our services have needs across the board where they need to be able to make payments, send payments to vendors, payroll or receive funds in multiple currencies. If they are in the USA and they need to receive funds in Singapore dollars, Australian dollars or euros, we provide them that service. They need to manage their expenses, so we offer them a card solution, where they can provide these cards to their employees to manage expenses for travel. Or, if they want to have their own branded card, we can provide them that as well.
Everything we do has a payments initiative to it. With our cards, where you can make payments across borders, we provide foreign exchange (FX), the ability to have multi-currency cards as well as make payments, receive the product and allow you to receive funds. Also, to turn around, take those funds, convert it back into your home currency and send it back home. Each one of the products always has a payments part to it, which has always been our key focus in the beginning, right when we started with dealing with the consumers and small and medium businesses (SMBs).
NA: What is the breakdown across consumer payments and enterprise business?
MB: On a volume basis, they're fairly equal. Our enterprise is starting to grow further so the split between them is starting to widen.
NA: What is the core underlying technology facilitating cross-border payments? And how is the company differentiating its technology vis a vis its competitors?
MB: The pandemic has accelerated the growth and adoption of digital payments. That, in turn, also allowed for the growth of our enterprise business, where we are able to cater the changing behaviours of our end users as well as our clients’ end users.
And the way we differentiate in that? That is always a good question, because when people ask us how we differentiate or compare ourselves from the competition, it's usually around one of our products.
There is nobody who does exactly what we do. So, we encompass everything. We are providing a suite of products across the board for enterprise and retail clients to fulfil all their needs. When people ask us about our competitions, it's usually about one segment of what we do. We view ourselves as a full suite of products and a technology provider to expand our partners and clients’ operations and offer multitude of products through us.
We build all our technology in-house. We have a great product team, development team, as well as developers and technology that build all the products internally. It's not built off a blockchain or one particular type of service. It's built around what fits the needs of our clients and what allows us to bring it to market efficiently.
NA: Are you using different technology for different corridors?
MB: In the corridors, it's all very much the same technology. When we build a product or service, and it's referring to payments in corridors, we build it so we can open up and provide our services in different geographies and locations, as well as make payments out to local payment channels. The way we do it is, we have that ability to adapt it to whatever geography we are going into. It allows us to get to market much quicker.
NA: And how are you building security and compliance into the transactions?
MB: Obviously, in today's day and age, security, compliance and managing risk are very important. We built a lot of our monitoring internally. We also use external vendors. We have the onboarding and transaction processes. We also do ongoing monitoring of all of our clients, no matter if it's sent, spent or received, whatever product it is. We always work within to make sure that our clients are safe. The funds are as streamlined as possible. We ensure that we are doing our best to mitigate all risks of any kind of fraud or any other security issues that may arise.
Recent partnerships with GeoSwift in China, SBM Bank in India and Kasikorn Bank targeted to scale its operations
NA: What are some of the recent initiatives and partnerships that are key to your business expansion and growth?
MB: Some of the key partnerships that we have had is, we recently announced in April that we are partnering with Geoswift to allow customers worldwide to send funds directly to UnionPay card accounts in 14 banks that allow real-time payments, plus another 50 plus banks to receive the funds within 48 hours. We have partnered with SBM in India, which we recently announced in August, to process outbound remittances for our InstaReM users in the country as well as SBM Bank’s Indian customers to remit money to over 100 plus corridors throughout the globe. That's been a very key one as well. We announced in May that KBank has partnered with us to add new payment routes and real-time payment capabilities to countries like Indonesia, Korea, Malaysia, the Philippines and Vietnam. We also partnered with Mashreq Bank in February. We announced to help with their instant and same-day credits to more than 30 countries through their quick remit feature.
NA: You also have a partnership with Visa. Can you tell us more about that?
MB: We are a Visa issuer. We can issue cards directly. We also have Visa Direct where we can pay directly to cards. That has been a very good partnership for us because it allows us to expand our product offering on the issuing side. That's expanded our geographical touch.
The company has 130 million end users, over 200 institutional customers and expects two times year on year growth in payment volume in 2020
NA: Tell us more about your business growth and key performance indicators that demonstrate this growth.
MB: Right now, we have over 130 million end user customers. We are projected to do about six billion in volume this year, which is two times year over year for us.
We have over 200 institutional customers in many different geographies, and we can do payments in over 100 plus countries. We're operational in six continents. We were able to help our customers on our enterprise side and we have 200 plus clients.
It takes a lot of work between all the teams that we have, having the products and the suite of products that we have between our send, spend and receive offering and our new products that we're bringing on. It will allow us to grow further by the end of the year and in 2021. We are looking to achieve about six billion in volume this year.
NA: Tell us more about what the impact of COVID-19 on Nium has been.
MB: It has changed the way that people do their payments or cross-border payments these days and the way they're using digital financial technology to complete, whatever the needs they have.
It hasn't been too bad for us. We've actually had a very good year. It has also let us grow, to be able to expand our product offering based on certain aspects of the needs for people on how much they have changed and how much they now see the need for fintechs to be able to manage their cross-border payments needs. We haven't seen too much of a downward within the company in our volume. Right away, we saw an increase in volume on our retail side, because the stores and outlets where people were sending cash to other countries were closing down. We have seen people come and look at providers like ourselves to offer more services. Our partners and their end user clients have changed the way they use digital payment providers.
NA: Nium has raised more than 60 million in funding, including series C round earlier this year. How are you utilising these funds?
MB: Whenever we enter a new geography for a licence, there are always capital requirements. There's overhead that comes into play, having funds available to expand our businesses into places like the UK, Japan and Indonesia. A lot of all those countries will require capital requirements and that eats up a lot of liquid assets that we have. We utilise a lot of the funds that we receive when we raise capital to build our products and teams as well as bring in experts and new team members to help build out those products. We are always looking to raise the level of people we have within the company, so we can get to market faster and have the right people in place to offer the right products.
NA: What are some of the new initiatives in the pipeline?
MB: We recently added Google Pay earlier in July, and we want to be able to process funds to e-wallets, hopefully over the next couple of months. We are going to add users to be able to make payments via Google Pay available through Android phones, tablets and watches. This will also be applicable for both in-stores and online. It will allow the card users to make payments through Google Pay. Another solution is BizPay, which is a card solution that allows people to utilise their current credit card limits into credit lines with us. There were a few new products coming along.
NA: What about “remittance as a service” that you have been expanding into? Are you looking at some new products or initiatives in that space?
MB: “Remittance as a service” is a very interesting product offering. It allows companies that have large client bases to utilise our licences and technology to offer remittance as a service. It allows companies that have a wide array of clients all over the globe to utilise our licences where we are able to offer this service. If they have a large client base in the US, Singapore, Europe or any of our other licenced countries, they can offer remittance as a service. It expands our product offering and allows us to bring in that volume from these other products from these other companies that would like to offer remittance as a service but don't have the regulatory knowledge or the infrastructure to offer that service. It allows them to go to market faster. Also, it provides them additional revenue and a new product line to attract more customers.