One mobile wallet aims to cater to millions of the unbanked
TRADITIONAL BANKS ONLY CATER TO THE TOP 30% OF EARNERS, LEAVING A MASSIVE GAP
Even in the UAE, an extremely affluent nation by the wider region’s standards, 60 to 65 per cent of the population remains either unbanked, or barely banked, according to research conducted by mobile wallet start-up Trriple.
The company says it hopes to solve the challenge of financial exclusion by making it possible for this section of society to enter the banking system, just not in the traditional sense.
For the millions of people in Dubai earning between Dh2,000 and Dh10,000, Trriple’s chief executive says that the introduction of mobile wallets such as his “will be a turning moment in history.”
“To financially include these people, to make their lives easier or happier, in as cheap and safe a way as possible” was the driving force behind the M Wallet,” said Paolo Gagliardi, CEO of Trriple, the Dubai-based financial technology company who developed the mobile wallet. These people are not targets for the financial institutions, which only target the top 25 to 30 per cent of the population in terms of income, Gagliardi added.
One of the first of its kind in the UAE, the M Wallet, which goes live in July, will try to address two of the most pressing issues for low-income workers: International remittances, and purchasing air time, or credit, remotely for family members’ mobile phones back home.
The UAE is the third largest remitter in the world, behind the US and Saudi Arabia.
Through 3,000 kiosks dotted around the country, individuals will be able to use cash to directly top up their mobile wallet, from which they will then be able to either purchase air time for “any mobile phone network on the planet,” or remit that money back to their home country, for around half the cost of a traditional exchange house.
“Today this isn’t possible. Low income workers today would love to top up the phones of their families back home, but they can’t, because they need a credit card. But now they can,” Gagliardi said.
To facilitate international remittances, Trriple has partnered with the Wall Street Exchange, owned by Emirates Post, to allow users of the M Wallet to transfer money internationally via their mobile phones.
This, according to Gagliardi, will save labourers and other workers from spending all day queuing at a currency exchange to send money to loved ones.
Many of these issues stem from the UAE’s reliance on cash; according to recent research, nearly 70 to 75 per cent of all transactions in the country are still made with hard currency.
Gagliardi says he understands this, and has set M Wallet up accordingly: “It’s completely disconnected from the traditional banking circuit. You don’t need a credit card, or debit card, or bank account, to top up your wallet. You just need cash.”
And yet simultaneously, Gagliardi acknowledges the shortcomings of cash, and the high probability that the tide has irreversibly turned against the form of currency due to its propensity to be used for illegal purposes.
“Cash doesn’t give the government and the central bank any idea about how the economy is going, because there is little control on that 70 per cent of money that goes back and forth between parties,” he said.
Dubai has previously stated its goal of becoming a cashless society by 2020. The introduction of a value added tax last January year will only sharpen the government’s desire to understand exactly how much money is in the market, experts say.
Trriple says it will continue to add features to the wallet towards the end of the year, although it will focus on remittances and mobile phone top ups initially, estimating that they will provide the company with 80 to 90 per cent of its revenue.
Funding
The start-up has to date raised between $5 million and $10 million in funding (Gagliardi won’t say exactly how much) from a handful of strategic investors, who the chief executive says are passionate about financial technology. “We’re very picky about who we let invest,” he says.
Hoping to be the first to market with such a mobile wallet, and with smartphone penetration rates in the UAE some of the highest in the world, Gagliardi says he is confident the M Wallet will be a success, and estimates that the company will break even by the summer of 2020. He hopes that the company’s success in the UAE will allow it to tap countries around the Gulf with even more favourable demographics: Saudi Arabia, for example, has a population three times the size of the UAE, the majority of whom, according to payment services firm MasterCard, are unbanked. “We’ve created a franchising programme, where you can take a mobile wallet live in your country within eight weeks,” Gagliardi says.
This business model, he says, is intended to mitigate the risks of trying to expand single-handedly through the region, whilst expanding the network, and thereby the usability, of the M Wallet. After that, the CEO says he will focus on having the best customer service possible.
“We understand nowadays, when people do things from their smartphones, they expect everything to be done easily, conveniently, and they need to be happy when they use our wallet,” Gagliardi said.