Now Money was founded in 2016 in Dubai to provide smartphone-based remittance and banking services to hitherto unbanked expatriate workers with lower incomes in the Arabian Gulf. Partnering with local banks, the company provides a digital payroll and accounts solution for companies and their low-income employees. In addition to the smartphone app, account holders receive a Visa debit card and round-the-clock phone support in nine languages.
Co-founder Ian Dillon discusses the challenges of reaching the unbanked, the impact of Covid 19 on remittance flows and his ambitions for the service.
Q: What was the founding rationale behind Now Money?
A: We set out in 2016 to introduce a low-cost, high-quality remittance and banking solution for the masses to the Middle East, starting out in the United Arab Emirates (UAE). One of the main issues is that most people who send remittances abroad every month in the UAE are unbanked, in part because their salaries are so low. So we had to come up with a solution to bank these workers and then, from that account, provide a cheap and convenient remittance solution over a smartphone.
We launched the service in 2018 and really saw a ramp up in terms of take-up towards the end of 2020. At the end of January 2021, we had around 20,000 users from around 50 corporations in the UAE, with our customer base doubling every month or so.
Q: How has Covid-19 impacted your business and remittances in general in the past year?
A: The impact for us has actually been net positive. Our main focus has been digitising the remittance experience and persuading people to send money via an app, rather than going cash-in-hand to a physical exchange house, which people haven’t been able to do during lockdown. So the pandemic has definitely changed the way they think about how they remit money and made them embrace digital services like ours.
Q: The pandemic has accelerated regional established banks’ digitisation programmes. Is there a danger that, as their costs get lower, they will begin targeting your key customer segments?
A: Not really. We’ve seen banks try to get into this segment and they haven’t had much success so far.
The reality is that to serve this customer segment you need a very specific digital experience that is very different from the mainstream digital banking experience, and getting that right is very difficult for a mainstream bank to replicate. Our app is in nine different languages and uses both text and audio, geared towards people with lower literacy skills.
Our main focus has been digitising the remittance experience and persuading people to send money via an app
There’s also a lot of work that needs to be done with all of our customers to make sure that they understand how the app works and that they’re comfortable using it. In the UAE, there’s still no getting around having to do ‘know your customer’ checks face to face, for both us and regular banks.
But it’s part of our business model working with corporates that we enrol customers at their employers’ premises, 100 or 200 at a time, rather than having to run around and enrol them individually. It’s an approach that’s worked to our advantage in that when we sign up customers we’re able to train them how to use the app and get the best out of it.
Q: You have talked in the past about expanding your services throughout the Middle East. Which market do you plan to enter next?
A: Yes, we definitely want to become a pan-Gulf Co-operation Council player. We’ve already signed an agreement with a partner bank in Saudi Arabia that we hope to announce shortly. Once we’ve established ourselves throughout the region, we’d definitely look at North Africa and potentially other areas as well.
We’ve raised $3.5m so far during three funding rounds, and we’re currently closing series A funding of $5m.
Q: Is competing against mobile wallet providers, such as STC Pay in Saudi Arabia, likely to be more of a challenge for you?
A: They’re probably more natural competitors for us than traditional banks. But do they keep us awake at night? No. Unless you have a single-minded approach to this market segment, and really understand the complexities involved, it’s a very tough nut to crack.
