Round peg in a round hole


by Ismail Ahmed

During this year’s Money 2020 conference in Copenhagen, WorldRemit’s CEO Ismail Ahmed spoke on a panel entitled “Toward a better product-market fit in financial inclusion” at Money 2020 Europe in Copenhagen.

The session posed the question: In the past, financial inclusion providers have attempted to retrofit standard financial services for underserved markets. This often results in trying to fit a square peg into a round hole. So how can businesses develop a cost-effective and scalable solution for the excluded that is also sensitive to variable market infrastructures and country specific regulations?”

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When Facebook purchased WhatsApp in 2014, the acquisition was met with general bewilderment in the ‘developed’ world, where the messaging service was relatively unknown.

Yet the move made perfect sense to the hundreds of millions of people – many in emerging markets – who used WhatsApp for its lightweight application and minimal data consumption.

Although built in Silicon Valley, the genesis of WhatsApp was its co-founders’ travels in Latin America.  They saw that the world was connected by a common technology – internet enabled mobile phones.

They also understood that their service needed to cater to vastly different levels of network and device sophistication – from 4G smartphones to 2G legacy handsets not seen in the West for years, such as Nokia’s S40 feature phones and Symbian devices.

WhatsApp became the world’s leading IP-based messaging platform, both in spite of, and because of, these widely varying local market conditions.

Vive la différence

At WorldRemit we spend a lot of time thinking about and building on common global technologies, not least mobile. We also make a virtue of the many different financial services and networks in the countries where we operate.

For example, the ability to send remittances to Mobile Money accounts enables instant international transfers, anytime, anywhere – a powerful offering for both sender and recipient.

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However, the world’s Mobile Money systems are highly fragmented in terms of their underlying technology. A few are built on common platforms like that developed by Ericsson, but many are bespoke.

For us, that means significant engineering work to create direct integrations – connecting systems that were never designed to work together, for an experience that feels seamless.

As technically challenging as that is, it is eminently more achievable than trying to create a new universal mobile wallet.

PayPal offers such a solution and transacts less than half the volume of Mobile Money services globally, with the latter growing more than three times faster.

Wired to the world

As WhatsApp discovered, fragmentation is not just a challenge, but a potential competitive advantage. Our partners recognise the need to connect their locally relevant services to the wider world.

Banks, mobile operators and cash pickup agents are meeting us half-way, building APIs that allow us to integrate deeply with their systems, or connecting to WorldRemit’s own APIs.

We are able to scale rapidly by making use of our local partners’ existing infrastructure, personnel and brand awareness. So when WorldRemit arrives in a new country, our offering already fits the behaviours, habits and needs of people we are serving.

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M-Pesa credit card. Image: I&M Bank

That sort of pragmatic approach is also being taken by other would-be service providers. Mastercard and Visa have based their attempts to break into Africa on cards linked to local Mobile Money partnerships, rather than trying to establish bank or credit accounts where none exist.

In Kenya, co-branded m-Pesa Visa cards allow users to top-up their plastic from a Mobile Money account. It will be a while before we know if there’s a real appetite for this sort of ancillary service, but it does, at least, feel uniquely tailored to Kenya.

It’s clear that in seeking to extend financial services around the world you don’t need to re-invent the wheel.

But working with fragmented, sometimes legacy technologies, is no barrier to innovation. In fact, it makes it all the more necessary. 

(Ismail Ahmed is the CEO of  WorldRemit. This post has been reproduced from the WorldRemit blog).