My name is Robert Jones, a Research and Innovation Consultant at FinMark Trust. This week I was afforded the opportunity to sit down with Mr. Ahmed Cassim, Managing Director at Hello Group, to discuss their highly successful cross-border remittances service ‘hellopaisa’. “hellopaisa international money transfer service allows you to send cash to countries across the world, in a manner that is fast, affordable, safe and easy to use. With hellopaisa, you can send cash instantly from South Africa to your loved ones back home.”
Below is an extract of our conversation, offering unique insight into a product impacting the lives of hundreds of thousands of migrants across South Africa:
Robert: Let’s start right at the beginning, tell me about the Hello Group, when did your operations begin?
Ahmed: The Hello Group was founded back in 2005 as a mobile telecoms player. We decided to target international calling because it was exceptionally expensive to make international calls. The experience was bad. Customers needed to have a calling card, stand at a payphone in rain or shine with very little privacy. We thought that there must be a better way of doing it. Through several iterations we launched our MVNO (mobile virtual network operator) in March 2010 in partnership with CellC. We are still the biggest carriers of international traffic out of South Africa, still have hundreds of thousands of customers who are captive to the Hello brand and use the Hello Mobile sim-card. We have customers who reside in metro areas and in the smallest of informal areas and cover the length and breadth of the country.
Robert: So, this formed the foundation on which you based the hellopaisa product offering?
Ahmed: We had a captive customer base of many hundreds of thousands of customers, of which migrants comprised a large portion. Remember these are the most entrepreneurial and sacrificial individuals, they leave their families and travel tens of thousands of kilometres so that they can support their families. By profiling these migrant customers, it was simple to see that they had three basic needs; they call home, they go home, and they send money home.
we were recognised as the first Independent Money Transfer Operator and in March 2015 launched with our usual Hello principles, which are; low cost, leveraging off of technology and providing access.
Robert: By leveraging all those years of insight through data, you were able to develop a problem statement and begin to address this market need?
Ahmed: Back in 2012, the world was a different place. For migrants to send money home they had to rely on informal and often illegal methods. They had to deal with lack of pricing transparency, had no security or safety, and experienced delays in delivery. The poorest people paid the highest prices because they sent the least amount. We quickly realized that this is a problem worth solving and we backed ourselves to deliver. We approached the Regulator in January 2013, told them that we had identified a problem worth solving and wanted to understand how we could legalise this service and obtain regulatory approval. In July 2013 the Regulators released regulation which would allow a category of licencee being an ‘Independent Money Transfer Operator’, which allowed companies like ours to go it alone. This meant we were not forced to partner with any money transfer operators or banks, and could offer remittance services through direct relationships with banks, mobile network operators, retailers, post offices etc whoever could facilitate the last mile pay-out. Fifteen months later we were recognised as the first Independent Money Transfer Operator and in March 2015 launched with our usual Hello principles, which are; low cost, leveraging off of technology and providing access.
Robert: Clearly data was central to the design of the product. Talk me through how data was used to provide useful insights?
Ahmed: We had a significant advantage compared to the other industry players. Why? Because we had a captive customer base that we could market to. We had lots of information; from our customer profiles we could see which countries they were calling, the people they were making phone calls to in which countries. It’s safe to say that if they’re calling that country then they’re going to send money to that country. So that guided our global pay-out network strategy.
It all boils down to the problem you’re trying to solve, the functionality you bring to customers, the price at which you’re offering this service, and how it changes lives. Customers are clever. If they identify with the best solution, they will use it.
Robert: Since its release, how would you describe the impact the hellopaisa service has made?
Ahmed: We’ve been in the market for more than four years now, we remit funds to more than forty countries and have brought down prices drastically. Based on information released by the World Bank, South Africa is the most expensive of the G20 countries to remit from at around 16-17%. We brought that down to 5% on average and our customers’ lives have been changed. The impact? Absolutely life changing! We’ve saved customers hundreds of millions of Rands. We have given our customers the ability to transact in a safe, confidential and cheaper manner which gives them confidence in the service. We’ve provided a fully transparent solution. The price you see is the price you get and there are no hidden fees.
Robert: The impact of the product is plain for everyone to see, why do you think it has been so successfully adopted?
Ahmed: It all boils down to the problem you’re trying to solve, the functionality you bring to customers, the price at which you’re offering this service, and how it changes lives. Customers are clever. If they identify with the best solution, they will use it. Most companies sit and wait for customers to come to them, we go the opposite way. Today in our financial services business we have a team of more than 200 employees recruited from within the communities they reside. They are not only the salespeople who can on-board customers, they are ambassadors. Our model is we go to our customers and the product education is undertaken by salespeople who speak their languages, that live in the areas, and whom our customers can ask questions without fear of feeling intimidated or ill-informed. Since launch we have on-boarded more than half a million customers.
Robert: The success of hellopaisa is testament to the clear benefits of adopting a client-centric approach to product development.
Ahmed: You see this word in our mission statement? Co-create. It is something that we live by. Co-create for us means in collaboration, in partnership, in consultation with our customers. We do not design products in a fancy air-conditioned office. We get our shoes dirty, go down to the streets where our customers reside and we design with them, not for them. Customer-centricity cannot be taken for granted. Robert: What was the biggest challenge you faced in designing and releasing a product like this to market? Ahmed: Building trust, without a shadow of doubt. We went out asking customers to give us 80% of their earnings and trust that we will deliver it safely to their family at home. Execution in these markets is not easy, building a trusted brand is not easy. When we chose partners, it was based on trust, their ability to service customers and our customers recognising these brands. You need to partner with people who can add value to the ecosystem, and someone you are confident will serve customers with dignity. The Hello Group is a company with a proven track record and proven execution skills, a trusted brand that understands its customers.
For more information, please visit: www.hellopaisa.co.za The achievements of hellopaisa have been recognised by being awarded:
- MasterCard Foundation ‘Clients at the Centre’ Award 2016
- SWIFT Innotribe African Startup Challenge 2016
- EY Entrepreneurs of the Year 2015
For more information contact
Nikki Kettles Head of the SADC Financial Inclusion Programme Email: nikkik@finmark.org.za Tel: +27 (0) 11 315 9197