Soft Space, a Kuala Lumpur-headquartered digital payments company, today announced that it has secured an undisclosed amount in Series B investment from Sumitomo Mitsui Card Company (SMCC), a wholly-owned subsidiary of Japan’s Sumitomo Mitsui Financial Group (SMFG).
The investment follows a Memorandum of Understanding and business alliance agreement signed between the two firms early last year, which enables Soft Space to gain access to the massive Japanese market. Additionally, this funding will create business growth opportunities for Soft Space in the ASEAN region.
This alliance also allows Soft Space to deliver customisable payment system applications, provide its EMV smart card readers for SMFG and its affiliates, and collaborate with the company to explore the possibilities of using Soft Space’s white-label solutions.
Soft Space also aims to diversify and boost its global reach into new markets.
Founded in 2012 by Chang Chew Soon, Soft Space develops mobile point-of-sales (mPoS) card readers for the banking and payment industry. With over 20 financial institutions in 11 countries, the company is expanding into omni-channel payments that includes the adoption of Artificial Intelligence, QR code payments, e-wallet systems and digital lending schemes.
Soft Space also operates a digital payment hub in Taiwan, a payment platform consisting of blockchain technologies, mPoS and mobile wallet. It allows merchants to securely accept payments methods from physical cards and mobile payments like AliPay and SamsungPay. The aggregate data from the programme can then be analysed to help financial institutions fight fraud, create merchant risk profiles and improve lending credit scores for the customers.
SMCC is a leading credit card company and an issuer of VISA cards in Japan, with over 25 million cardholders and US$ 110 billion in transaction volume in 2016.
Soft Space is SMCC’s first investment outside of Japan and the US, and is its debut investment in Southeast Asia. The company has in the past invested in two US-based fintech companies, Square Inc. and Stripe Inc.
“SMCC has been around for over 50 years and with this partnership in place, we will work together to build a more sustainable SMCC business model for the next five decades,” said Ken Kubo, President of SMCC. “Moving forward, we will collaborate with Soft Space and create market-driven solutions that will boost both our businesses to new heights.”
Joel Tay, CEO of Soft Space, said: “By aligning our synergistic strengths with SMCC and its affiliates, we will work together to expand our business growth opportunities and to provide innovative e-payment solutions that can transform their cash-centric payment lifestyle.”
Japan is also seen as a traditionally cash-centric society with 62 per cent of consumer payments being made by cash in 2016 (Euromonitor International, 2016)1. But with the 2020 Tokyo Olympic Games coming up, which is expected to attract some 40 million foreign tourists all around the world, the Japanese government has been making continuous efforts to empower businesses to expand digital payment services within its shores.