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Cross-border payments firm Nium is seeing rapid growth in Asia-Pacific, a trend that its regional manager puts down to being "hyper licensed" and to working closely with local regulators.

At Money 20/20 Asia last month, Nium announced new partnerships with , Indonesia’s national switch provider; and , a key player in B2B virtual card payments.

With Artajasa, Nium committed to provide real-time, cross-border transfers between Indonesia and the rest of the world. The partnership is the first of its kind between Indonesia’s national switch provider and a cross-border payment rails provider such as Nium.

“Our intent is to be able to take all of the banks that are on the switch and allow them to make seamless, real-time cross-border payments,” Anupam Pahuja, EVP and general manager for APAC and Middle East at Nium, told ����žž after signing the memorandum of understanding (MoU).

“Artajasa is connected to all of the banks in Indonesia, and we are connected to Artajasa, so we'll be able to help any bank make cross-border payments at a fraction of what they're paying today,” he said, putting the cost reduction at an average of 80 percent compared with using correspondent banking.

When a customer makes a cross-border transfer via a banking application in Indonesia, the transaction will be passed to Nium via an API, and will be executed once the customer accepts the rate offered.

Nium also holds  in more than 40 other markets, including Thailand, where it already provides the same service to four of the country’s five largest banks: Kasikorn Bank; Bank of Ayudhya; Krungthai Bank; and Siam Commercial Bank. 

Indonesians send large amounts of money both through remittances and while travelling, particularly on pilgrimage to Islamic holy sites in Saudi Arabia, undertaken by more than 2m Indonesians each year.

Indonesia’s second-largest remittance corridor is with Malaysia, but Pahuja said that in the future, Indonesia’s cross-border payment ties are likely to grow beyond the Islamic world.

“Indonesia will grow its economy like Vietnam has done, by becoming a supplier to the world,” he said. “We see Indonesia as a beacon of growth as it taps into this potential.”

From C2C to B2B

Nium began in Singapore in 2014 as Instarem, a consumer-facing remittance platform, but in the years since it has evolved mainly into a white-label B2B solution.

This evolution has not been a “push” from Nium, said Pahuja, but rather a “pull” from banks and fintechs, who have approached Nium looking to increase speeds and reduce costs in cross-border B2B payments.

Moreover, as noted by Pahuja, the total addressable market for cross-border B2B payments is more than 50 times larger than for C2B or C2C payments.

According to , global cross-border B2B payment volume hit $150trn in 2022, compared with just $2.8trn for cross-border C2B payments and $800bn for cross-border C2C payments such as remittances.

Research from Boston Consulting Group also indicates that, by 2027, the total value of all cross-border payments will reach $250trn.

Against this backdrop, Pahuja said Nium’s global revenue is growing at 50 percent year-on-year and its APAC revenue is currently growing at more than 100 percent.

“The growth we are seeing is because we have a product and a service that there is a real need for around the world,” said Pahuja.

“As the world becomes a global village, there's a need to move money as fast as possible, and businesses are increasingly realising that that need is not being met by using traditional methods.”

Compliance as a growth strategy

In the ten years since Nium’s founding, it has grown to become one of the most licensed entities among those providing cross-border rails.

Pahuja describes Nium as “hyper licensed”, not as a box-ticking exercise, but as part of a strategy of working closely with regulators and ensuring “ubiquity of presence” in local markets.

“Among payments companies, regulation and compliance is often seen as a shield to protect oneself from going to jail — as a kind of necessary evil,” he said.

“Whereas I feel compliance and regulation is a weapon. It’s a sword, not a shield, and you can use it to get ahead.”

The key benefit of being “hyper licensed”, in Pahuja’s view, is so that payment service providers can operate on a level playing field with banks.

In Europe, for example, licensed electronic money institutions (EMIs) can connect directly to the Single Euro Payments Area (SEPA) system, while in Singapore, an EMI licence allows for direct connection to the national switch.

“If you're on the switch, your cost becomes a fraction of what others would end up paying,” said Pahuja.

“There are no middlemen. You can move money directly to the end beneficiary's bank account, and the speed is real time, because most of these are real-time switches.”