With Vietnam’s biggest taxi firm as customer, fintech startup gets funding to go regional

Mobile point-of-sale (MPOS) startup SoftPay Mobile has raised US$1 million for its series A round, the company announced today. The round was led by Singapore-based venture capital firm Life.Sreda through its InspirAsia fintech accelerator. SoftPay is part of the accelerator’s current cohort of startups. The round was also joined by an undisclosed investor.

SoftPay Mobile (not to be confused with the Hong Kong-based online marketplace for digital goods, or SoftTouch’s payment solution, or the Nigerian money transfer method) is registered in Singapore but is currently operating in Vietnam. It provides a MPOS reader that allows businesses to accept and process credit and debit card payments, much like US startup Square. It also provides software tools for merchants.

According to its website, SoftPay Mobile does not charge a monthly fee, nor does it require a minimum monthly transaction volume. It charges a fee of 0.8 to 2.5 percent per transaction.

In Vietnam, the startup works with companies such as taxi company Mai Linh Taxi, and various smaller businesses. According to co-founder and CEO Christopher Low, it has seen a 300 percent month-on-month increase in processing volume since it launched in early 2015. Christopher tels Tech in Asia that more than 3,000 merchants in Vietnam have registered for the MPOS product.

With this funding, the startup will staff up in order to fuel its expansion to other Southeast Asian territories. It’s looking toward Singapore, Malaysia, and Indonesia in the next six months, being in “advanced talks with financial institutions” in this regard. “We will be looking to hire country managers with a strong experience in sales and preferably from the finance card payments industry,” Christopher says.

The startup hopes to build on its experience in the Vietnamese market to push into the rest of Southeast Asia, where it sees potential for its offering. “We have learned that there is a strong demand for MPOS among Tier 3 and 4 merchants,” Christopher explains. “These groups of merchants are traditionally ignored by the banks due to their perceived lack of volume. As a technology company at our core, we are able to fill in the missing gap […] for many large companies who want to implement an end-to-end MPOS solution for their businesses.”

MPOS solutions are considered by investors a particularly promising area of fintech, especially when it comes to developing markets with high smartphone penetration – quite a few of them in Southeast Asia. “[MPOS] is a necessary sector in any fintech ecosystem,” Igor Pesin, Life.Sreda partner and investment director, says in a statement.

“Between MPOS companies in [the region], SoftPay Mobile has one of the most experienced teams. They have already built and launched great products and proven that they can effectively acquire and keep small and big merchants,” he adds.

While in the US all eyes turn toward Square’s impending IPO, in this region there are a few companies trying to crack the MPOS market, including India’s Ezetap, Malaysia’s Soft Space, Indonesia’s Moka, and Singapore’s Nearex.

SoftPay Mobile’s key strength in this space will be its ability to acquire merchants, Christopher says. “Traditional MPOS companies have been focused on providing MPOS solutions to banks all along,” he explains.

“MPOS companies are not willing to invest in a sales team as it is not their core business. For SoftPay Mobile, we believe that the business factors should drive the technology. Without merchants adopting MPOS, MPOS will not take off. Hence, we have a proven, cost-effective machinery to allow us to acquire merchants.”

The startup plans to work closely with banks to drive merchant acquisitions and invest in sales teams in each of the countries it seeks to enter, supporting its cause with online and offline marketing campains, Christopher says.