WorldRemit is one of the UK’s most high-profile fintech companies. It’s part of a new generation of international money transfer services aiming to make sending money as easy as sending a message online.
Backed by the likes of Facebook and Dropbox investor Accel Partners as well as Netflix, Spotify and LinkedIn investor Technology Crossover Ventures, the firm is one of London’s best-backed financial tech companies with around $150m in venture funding under its belt.
The latest episode of the FinTalk podcast we sit down with CEO and founder Ismail Ahmed from the company’s roomy new London head office. He talks about experiencing first-hand the high cost and inconvenience of sending and receiving money growing up in Somaliland and then later as a student in London sending money home, the challenges he faced building the business and, where he sees the industry in 10 years.
The episode is available on Soundcloud right now, with a launch on iTunes coming very soon. We’ve also transcribed the interview below for those of you that prefer that format. Enjoy!
Tell us something about WorldRemit nobody else knows
When I started the company it was first incorporated as ‘Clean Remittances’. The idea was that because of my compliance background we wanted to promote that and say that we’re different from traditional money transfer services which are associated with money laundering and the like.
Just before we got started I got a call from one of our bankers and it became clear she thought we were running a cleaning business so she was checking out what kind of qualifications I had to run a cleaning business. After that we changed the name.
Why did you decide to launch the business in the first place?
I have been interested and involved in remittance for a long time. I come from Hargeisa, the capital of Somaliland, where remittance makes up around 40% of the GDP. Before I left the economy used to rely on remittance coming from gulf countries and my family like many others used to receive money from there.
I learned how remittance worked when I was a schoolboy and then when I came to the UK as a student I became a sender so I gained first-hand experience of the kinds of costs and inconvenience associated with traditional money transfer.
After that I became a compliance adviser for the United Nations (UN) after 9/11. That was when I saw how traditional money transfer services were broken in terms of difficulties in identifying fraudulent transactions and money laundering and the difficulties of trying to establish an audit trail around someone going to a corner shop to send money using cash.
My original background as a recipient and sender of remittance and also my experience of the UN helped shape my idea for WorldRemit.
What has been the most challenging element of building the business?
Getting the payment methods on the send side right. We went global very early, for example launching in Canada within weeks of launching in the UK. They don’t use debit cards like we do with Visa and MasterCard they use a system called Interact or Interact Online for online payments so it’s about getting an understanding of how to collect payments from customers in each market. I’d say really understanding and then implementing those payment methods in the 50+ send markets where we source remittance was the most challenging factor.
On the receive side it was about how to get tier one partners that help us build trust with migrants. Migrants are very conservative and do not like to change their behaviours. One way for us to build that trust is through partners they recognise. Every Kenyan will understand if you say you’re working with mPESA and any Ghanian will undertand if you say you are working with MTN Ghana.
Without those brands it is hard to win that trust. But to get those brands you have to show volume and traction. So we faced the challenge of having to get customers to prove we were a credible large player to tier one correspondents, but could not get them until customers trusted us.
Full transcript on PaymentEye