FSS lines up nanofinance partnership

MAI-listed Forth Smart Service (FSS), an online top-up machine service provider, is jumping on the burgeoning nanofinance bandwagon through a planned partnership with a non-bank financial company in a bold move to strengthen its electronic bill payment services.

But the company has denied a report saying it would apply for a licence to become a nanofinance service provider, saying it will only focus on its core e-payment services.

“It would be too risky for us to provide nanofinance loans that require no collateral,” said executive chairman Pongchai Amatanont. “We position ourselves as a convenient bill payment channel to earn transaction fees, rather than being a financial service provider.”

FSS, which is 45% owned by SET-listed Forth Corporation, aims to get 10-15 baht per transaction from its prospective nonbank financial partner, said Mr Pongchai.

Nanofinancing involves loans that can be extended to an individual seeking to borrow up to 100,000 baht without collateral to use for business operations. The financial service concept is to help nonbank lenders extend money to people without access to capital.

Non-bank lenders will be allowed to offer loans up to 100,000 baht. These loans would be subject to higher interest rates than those from financial institutions, up to 36% annually, but lower than the rates generally charged by loan sharks.

FSS has a combined 42,000 electronic top-up and payment machines. Of the total, 39,000 are for an online top-up machine service known as Boonterm, which allows prepaid mobile users to top up their phones at its kiosks. The remaining 3,000 machines let customers make self-service online bill payments including credit card bills.

Last month the Bank of Thailand granted a licence to FSS to provide electronic bill payment services.

Mr Pongchai said FSS expected to enjoy a 30% jump in revenue this year, thanks to the stellar growth in its online top-up and bill payment services.

“We plan to add 10,000 online top-top machines plus an additional 5,000 bill payment machines annually,” he said.

Last year FSS reported 1.17 billion baht in revenue. Net profit reached 153 million baht.

Mr Pongchai also said Boonterm machines earned 30 million baht per day from online top-up services through 1 million transactions. FSS earns a 12% fee from each transaction on average. In addition, FSS plans to expand to banner advertising this year to add a new revenue stream, he said.

FSMART shares closed Tuesday on the Market for Alternative Investment at 11.10 baht, down 50 satang, in trade worth 45.9 million baht.