“There are endless opportunities to develop financial solutions which would solve real problems.” – Mathieu Coquillon, co-founder, Mama Money.
The remittance market is changing rapidly. Thanks to technology, innovations are springing up daily to transform the payment systems as digitized financial services create new opportunities. One such innovation is Mama Money, a cross-border money transfer service allowing migrants to send money from South Africa to their home country with ease and at an affordable rate.
The South-African based mobile platform offers remittance services at a more convenient and lower cost. “We pay out through mobile money networks across Africa, which solves the last-mile challenge of getting money to rural communities,” Mathieu Coquillon, co-founder and director of the platform told online media, How We Made It In Africa.
In 2017, African migrants sent home over US$70 billion in remittances constituting an increase of over 10 percent from 2016 and more than 36 percent in the past decade. And sub-Saharan Africa remains the most expensive region in the world to send money home with an average cost of 9.3 percent of the amount sent as at last year. Hence the need for more FinTech remittance solutions like Mama Money.
The startup which has been operating for about four years spent the first two years applying for a licence from the South African Reserve Bank and building its technology. And though it has been running on a small budget, Coquillon and fellow co-founder, Raphael Grojnowski, have learnt how to make every cent count. However, an investment raise late last year helped immensely during its hyper-growth phase.
Like most businesses that started out with a strategy but have needed to acclimatize to their environment in time, Coquillon did reveal that he and Grojnowski initially made a mistake of trying to reinvent the wheel too early by disabling cash payments for remittances. “We quickly realised that the majority of our customers didn’t have bank accounts and that we need to find a way to accept cash at retail stores,” he said.
“The biggest lesson was: don’t try and force the market to make too big of a step away from what they’re used to. Do it slowly and you’ll get there in the end.”
So far, a major challenge for the duo is knowing the next project to take on since there are so many opportunities in the financial solution space, but focusing on their customers pressing needs have proved the most important. Another challenge is finding talent for product development and marketing, something to be ticked off the top of their list if they had a million dollars to invest in the business.
Though there’s more to be done in terms of marketing, Mama Money already operates an effective form of marketing by reaching their customers through their network of over 700 entrepreneurs in South Africa. “Going to our customers, instead of them having to come to us, has proven very successful,” said Coquillon. In December 2017, business doubled in the course of a month validating four years of hard work for both founders, “It is that moment when you realise you’re really onto something.”
In addition to helping people send and receive money in a more convenient way, startups like Mama Money contribute to financial inclusion, economic growth and the development of FinTech innovations across Africa. Through the use of technology, they help to solve the day-to-day challenges encountered by Africans in diaspora when it comes to remittance and cross-border bill payments, both at personal and business levels.