Westpac has tipped more capital into the struggling instant payments platform Beem It despite a strategic review of the business and decline in transaction volumes triggered by the meltdown of the hospitality sector this year.
Beem It, which is jointly owned by CBA, Westpac and NAB, was launched in 2018 as a social payments solution allowing individuals to split restaurant bills using multi-network debit cards.
Its mobile wallet also allows users to make instant transfers to other users’ debit accounts and pay merchants for purchases.
A Westpac spokesman confirmed to Banking Day that the bank last month boosted its investment in Beem It’s holding company, Digital Wallet Pty Ltd by almost A$4 million.
The move means that Westpac now holds a 30 per cent stake in the business, with CBA and NAB’s interests diluted to 52 per cent and 18 per cent respectively.
The three owners have now invested $56 million in the venture, but have been unable to attract interest from other investors despite a public invitation to other ADIs to take equity.
A big factor driving that disappointment is the New Payments Platform that has positioned that other bank-owned platforms such as UP and 86 400 to compete against Beem It as branded providers of instant transfers and payments.
While CBA was able to project Beem It as a unique offering in 2018, the NPP appears to have eroded its business case by opening a field of competitors.
Westpac’s decision to increase its investment might seem a tad surprising, given reports in the SMH last month that CBA was reviewing strategic options for the business.
Another possible interpretation is that Westpac’s fresh support is about tiding over a cash-strapped operation until a final decision is made about its future.
Although the Beem It app has been downloaded almost 1 million times in the last two years and garners positive reviews from users, the venture has endured a tortuous and often traumatic baptism in the payments market.
Since its launch, the company has been plagued by branding problems and high turnover in its senior management.
Until Westpac tipped more cash into the business last month, the prevailing talk was that CBA would look to pull the plug on the company or try to cash out its stake.
A potentially ominous sign for the company is that it has been without a chief executive for more than six months after the sudden departure of Angela Clark in February.
If CBA and the other shareholders decide to stick with the business, Clark’s successor would be the third CEO in three years.
While Beem It’s range of services has widened since its launch, the business appears to have taken a big hit from depressed activity in the hospitality sector.
Since Covid-19 hit Australia in April, marketing teams have been trying to pivot the business in other directions, including as a quasi-remittance platform for Australians living overseas.
The platform is also moving to increase its presence as a payments method in the online gaming and video streaming markets.
In the last 12 months Beem It has been progressively increasing daily transfer