As Southeast Asia’s first business-to-business (B2B) payment unicorn valued at US$2 billion in 2021, Nium is a groundbreaking fintech, having grown from a remittance provider to a global payment leader facilitating real-time cross-border payments.
Nium was first known as Instarem (short for ‘Instant Remittance’ when it started in 2014, and later rebranded to Nium (meaning ‘rules and principles’ in Sanskrit) in 2019. Prajit Nanu, the company’s co-founder and CEO, was joined by Pratik Gandhi, one of the first local hires in 2016.
Some two years into their entrepreneurial journey, the team found an opportunity to serve institutional clients when a corporate customer requested to send money in bulk to Malaysia. That deal comprised tens of thousands of small-value transactions, which in total exceeded the amount of retail remittance transactions Nium was handling. The team realised then that the business-to-consumer (B2C) remittance market with an estimated total addressable value of about US$800 billion paled in comparison to the US$60 trillion B2B market dominated by large banks.
Nium successfully managed this first institutional transaction, giving it the confidence to enter the highly valued B2B market. As Nium addressed the challenges confronting operators in the B2C remittance trade, such as small-value transactions, the high cost of acquiring retail customers, and frequent customer switching, the start-up pivoted its business. Its customers included banks, e-commerce companies, and international firms that outsourced expense and payroll management.
Factors for Nium’s Success
The cornerstone of Nium’s new business was to build a global payment infrastructure. Nanu explained, “We wanted to create the McDonald’s of payment systems. What Nium did was to build a technology layer with standardisation and consistency so that people in any part of the world could build products [on it].”
Singapore’s growing global fintech hub was a key contributing factor for its growth. Fintech was among the key pillars of Singapore’s strategic vision to becoming a Smart Nation. The city-state’s status as a regional fintech hub and its robust capital markets drew international investments post-pandemic, which reached a new high of US$4.1 billion in 2022. Singapore’s business-friendly environment, which includes a competitive economy, ease of doing business, intellectual property (IP) protection, and political stability, has also helped.
Another factor conducive for Nium’s growth is Singapore’s regulatory framework. For example, in 2016, Singapore launched the FinTech Regulatory Sandbox framework to encourage fintech companies to conduct trials on their financial products and services with real customers and transactions, but under regulatory exemptions for a limited duration. In 2019, the framework was further enhanced to facilitate quicker market testing, called Sandbox Express. This was followed by Sandbox Plus in 2022 which catered to first movers and early adopters of innovation.
All these allowed Nium to leverage Singapore’s fintech ecosystem to scale. Nium built a global payment infrastructure, a befitting solution to serve the needs of the larger B2B market. By 2024, the firm held regulatory licenses and authorisations in more than 40 countries, accepted pay-ins in 40 markets and issued pay-outs to more than 220 countries and in 100 currencies.
Nium continued to adhere to its original mission of offering speed, convenience, and low fees to customers even as it shifted from small to institutional clients.
Innovations and Milestones
Nium’s innovations like Nium Portal, Global FX, and AI-based Chronometer also ensured its continued relevance to its growing clientele. The Nium Portal, launched in 2023, provided a single dashboard of the individual client’s global treasury operations. Nium Global FX was subsequently introduced in 2023 to help businesses mitigate currency fluctuations risk and improve cash flow, allowing Nium’s business clients to lock in foreign exchange (FX) rates in more than 60 currencies, schedule future dates to settle conversions, and compare the FX rates of other providers. Complementing the Global FX was the Nium Chronometer, an artificial intelligence (AI)-based algorithm capable of analysing options for fund disbursement across Nium’s network of intermediaries.
Nium supported the automation of its clients’ direct salary payments to their global workforce, and enabled companies to pay overseas suppliers and providers directly, hence avoiding hefty fees charged by intermediary banks. This allowed recipients to receive funds to their bank accounts, wallets, virtual cards, or even cash, in local currencies.
Growing Organically and through Acquisitions
Nium continued to partner with large and small companies. In 2022, Travelex, Nium’s partner in Japan, launched a similar online international money transfer service, offering a convenient way to remit money to over 50 countries. In 2023, Nium teamed up with South Korea’s leading financial institution, Jeonbuk Bank, to offer cross-border remittance services for the 2.5 million foreigners living there.
In 2021, Nium acquired London-based B2B travel payment platform, Ixaris, a forerunner that introduced virtual credit cards to Europe. It also took over Wirecard’s operations in the major Indian cities, facilitating its entry into the high-growth Indian market. In 2022, it also bought Singapore’s SoCash, an alternative payments network platform.
Gunning for The Future
Nium’s net revenue soared from S$43.9 million (US$30 million) in 2021 to S$117 million (US$82 million) in 2022, and Nanu expected the company to start turning a profit after mid-2024.
As it pivoted and innovated to provide relevant products and services for its customers – big or small – Nium has successfully managed to leverage Singapore as a gateway to access neighbouring countries with fast-growing economies, large consumer markets, and untapped financial markets. It also has plans to grow its revenue, expand and go public.
Students and corporates using this case study will discuss: How can Nium continue to grow and surpass its previous peaks to reach greater heights?
This case study 'Nium’s Journey to Become the Leader in Real-Time Global Payments' was written by Professor Emeritus Annie Koh and Dr Cheah Sin Mei of Centre for Management Practice (CMP) at the Singapore Management University and Professor David Fernandez at the University of the Philippines. To read it in full, please visit the CMP website by clicking here.