Matt Oppenheimer’s career has taken him to some interesting places and it was while working in one of them that he drew the inspiration for Remitly, a mobile payments service employing a combination of the latest technology and mobile phones to eliminate many of the hassles people often experience when making traditional money transfers.
“I’ve traveled my whole life, and have been to every continent (save Antartica) multiple times” Mr. Oppenheimer began.
He has also worked on some of those continents, and it was while serving as Barclays Kenya’s head of mobile and internet banking initiatives in Nairobi that he saw the growing inequality and extreme poverty impacting millions on the continent.
“Seeing people in the slums showed me how much of an impact remittances have on peoples lives,” Mr. Oppenheimer said. “It’s multiples larger than foreign aid.”
While the overall numbers of people impacted by high transfer fees and inefficient systems are staggering, Mr. Oppenheimer said it was the individual cases that struck him, of the poorest paying prohibitive fees because they knew of no better option.
But he also saw hope in the form of services like M-Pesa, a mobile phone-based money transfer, financing and micro financing service.
“I saw it as a really meaningful problem to solve,” Mr. Oppenheimer said. “People are now using smart phones to communicate with loved ones abroad, so it’s a natural extension to provide financial services to people through them.”
Those mobile phones offer a safer method of for transferring money than heading to many Kenyan banks, Mr. Oppenheimer added. Many Barclays branches in Nairobi require crews of armed guards.
“Mobile is much more secure. Customers can get cash when they want.
“The future is clearly mobile.”
Mobile wallets will play an important role, and already are in places like the Philippines, Mr. Oppenheimer said, but many people still want access to banks to pick up cash.
Mr. Oppenheimer said building a startup has been an interesting experience, both in terms of geography as he moved from Nairobi to Boise to Seattle, and in terms of education, serving as entrepreneur in residence at early stage venture capital fund Highway 12 Ventures.
Building Remitly was a slow and deliberate process, Mr. Oppenheimer said (for example, it took four years to obtain licenses in all 50 states). After starting Remitly in 2011 with cofounder Josh Hug, it took a couple of years to reach critical mass before reaching rapid growth mode in 2013-14. The company now transfers more than $1 billion each year, making Remitly America’s largest independent international money transmitter.
Remitly’s deliberate approach extends to its selection of new transfer corridors, Mr. Oppenheimer said.
“We want to go to the places where we can add the most value.
“There are two things you notice when you peel things back. More than $400 billion of the $600 billion global remittance market goes from developed regions to developing ones. These are the more expensive and less served markets. The remaining $200 billion transferred between developed to developed country corridors are now served by banks and companies like Transfewise. They are a lot less challenging of a proposition.”
Mr. Oppenheimer added that while remittances are sent around the globe, the vast majority are sent between fewer and larger corridors.
“One example is the United States,” Mr. Oppenheimer said. “The $134 billion from the uSA are sent to hundreds of countries, but over half, $70 billion, is sent to just five countries – Mexico, Philippines, India, China and Vietnam, so Remitly is concentrating on these corridors.”