Ghana Financial Services: Zeepay, A Fast growing Fintech Connecting Digital Assets

Interview with Andrew Takyi-Appiah, CEO of Zeepay

What is your assessment of the sector in Ghana? What are the latest trends? Is the market competitive?

We are in the fintech sector. We are looking forward to using innovations such as artificial intelligence and being able to use AI to manage the agent network to control fraud in the system. We are also excited about the fact that we have the new Payment Systems and Services bill which will bring a lot more clarity and direction to the market which has been long overdue. Congratulations are due to the Central Bank for the wonderful job they have done. We operate in the remittance subsector, which we call “IMT to wallet”. Remittance is basically into the mobile money wallet, bank accounts, and CAD rails. We leverage digital assets to serve the last mile. It is an exciting space today. We have made a lot of social impact. A lot of women, older people, disabled persons, and children are able to access their international remittance directly from their loved ones abroad. Before, there was one person in a single household who would receive funds on behalf of five or ten people. This made the system vulnerable to fraud and many other challenges. Today, senders are able to send money directly into their loved ones’ mobile wallets. The old women do not have to walk 100 km to pick up their cash. More often than not, if you walk out your door there is a mobile money agent to come pick up your cash. These disruptions to the banking system have been very positive because it means that for the first time, you can receive your remittance outside of the banking system. In the past, you could only get your remittance through a bank and you had to visit between the hours of 8-5 p.m. when they were open to get your money. If there was a fund emergency you had to wait until the next day or use Harambee, the illegal black market, to move money around. One of the innovations in this space is the ability to be able to do compliance on a real time basis, screening sanctions, creating last mile opportunities. Here, we have not only created opportunities for last mile to receive money, but now they can do borrowing as well. We have built a remittance purse for our repeat customers. Many of our clients have traffic coming through on an annual basis. One good thing about mobile remittance is that once a customer gets keen on it, it can only grow because it is a continuous experience for them. There are a few challenges across the ecosystem on the continent. For example, the African regulators often do not understand the digital space so it is a bit of a struggle compared to FC in the UK which is building a thriving ecosystem because they have come to understand that this is the future. In Africa, it is still a journey. You see isolated countries like Ghana and Rwanda who want to get this right, but the others are struggling along. Still, we are very optimistic. Every breakthrough in every country is a breakthrough for Africa.

How is your company different from the others? What do you bring to the market as a competitive advantage?

We are going to raise about $20 million and the eventual objective is to be able to acquire domestic players to build a strong domestic platform and at the same time expand to be able to continue to do our international business.

Our competitive advantages are many fold. Firstly, from a national perspective, in the past 10 years we have gone into mobile money and there is a lot of electronic money floating in the system. A lot of banks who have the trust accounts are sitting on an excess of $400 million in electronic value. What is the instrinsic value? We come into the market with cash to purchase the electronic value to enable us to terminate. So, all of a sudden, we are recycling the market. We have bought a multiuse conveyor belt not a single conveyor belt. Before our entrance into the market, it was only domestic activity. But mobile money and remittance alone to Ghana is $3.8 billion. Imagine all those 3.8 billion dollars coming in and buying electronic value. By recycling it we are creating a trading ability of digital cash against physical cash. That is the first problem we solved in the market through innovation. Being able to create last mile access is a powerful thing. We are taking the market to where it needs to go. Today, we are building distribution. In this business, we have the large MTOs, money transfer operators, and the corridor specialists. The corridor specialist is your traditional Ghanaian who lived in Germany for 50 years, had a license to transfer money when there was no one doing it 50 years ago, and has been able to do it and keep a certain clientele base for 50 plus years. He needs the scale factor which we bring in by being able to get him to distribute across Africa. Suddenly, we make it possible for them to terminate into 50 countries and give them access to 150 million mobile wallets. Otherwise, they would have to do this by coming in country by country for four or five years before they finally get approval. These are some of the things we value add.

What is your international reach?

Our international reach is basically everywhere in the world. The world is moving from cash per cap. Remittance, in the old sense, money is sent to a location with a certain code and you then pick it up in cash. It is exposed to a lot of fraud issues that are becoming a big problem. Of course, the faceless transactions such as terrorism financing, etc. are also involved. These are faceless transactions and you cannot tell who they are. We bring a lot of value by terminating into digital wallets or “over the top”, OTT. This experience gives the whole world at your reach. Currently, we cover Africa directly and through third party relationships. Our next plan is to cover the Caribbean, South America, Asia Minor, and Middle Asia. I do not see Europe having wallets, but I see a relationship with Google or PayPal on how we terminate OTT into wallets into Europe. Today, we cover about 50 African countries. We have a market presence in UK, Ghana, Sierra Leone, Rwanda, and Uganda.

You recently signed a partnership with MoneyGram. What do you bring to them as a company?

MoneyGram’s original engineering presupposes a cash pickup. What we bring to the table is enabling MoneyGram to be able to leverage digital assets so that they expand distribution and reach quickly. For the first time, MoneyGram has access to over 21 million wallets in Ghana alone. Through the partnership, they will have access to 150 million wallets across the continent. It is remarkable what happens to MoneyGram immediately. They have market access, they have a first market advantage, and they are moving quickly. Of course, we have other clients as well. For every key player we have in our corridor we have other sub clients as well. Imagine a Walmart customer going into a store and being able to send money directly into Ghana through MoneyGram. That is a powerful thing. We made the world smaller. We are really making a global village in that respect. That is what we bring to the table. We have multiple partners in Europe alone. Our biggest corridor is the US and it will always be that way. We also have corridors like Qatar, Spain, South Africa, and the UK which are big for us. Put together, we have about 30 partners. We are probably the world’s largest remittance company that does termination and does not have a single agent. We collect and we terminate.

Do you have many competitors that do the same thing?

In terms of bias entry, they are very high. You have regulatory, compliance, capital, human capital, standards. It is a rather difficult industry to crack. It took us two years to convince the first regulator that this is safe. After that, the rest is history. In terms of players, we have two core global competitors, but we all work with each other. We compete significantly on the global scale.

You recently merged with eTranzact. Are you looking for more partnerships?

As a company, we are looking for growth. Growth has become a significant play of the game for us. We are looking for market dominance. We built a playbook in Africa, particularly Ghana, and we are ready to throw that playbook across the world. We want a strong partner that can help us do that. We are going to raise about $20 million and the eventual objective is to be able to acquire domestic players to build a strong domestic platform and at the same time expand to be able to continue to do our international business. International business dominates our business at about 90% of our transactions today. Domestic business dominates only about 10%. If we can acquire local players or merge the local players, it gives you that throughput. Of course, the regulations are changing in Ghana as well. It is always good to look at partners and see if you can have an alliance with them.

What kind of partners are you looking for?

We want strategic partners. These are people that are in related ecosystem businesses. We particularly have an appetite for domestic platform players who have a good throughput of domestic transactions and relationships.

What is your policy on CSR and being environmentally friendly?

It is a very necessary thing. I call it “ecosystem development”, the reverse of the ecosystem instead of CSR, and we give our support to developing a local ecosystem that is good. We have various programs that support schools and charities. On a monthly basis, we support various ecosystem partners in the form of childcare, child development like library books, and many other things. I personally have a vision to help expand services across Africa and among society related to my business. My vision and my dream is to be able to carry a local ecosystem into the world. PayPal did a wonderful job and they are going to carry TransferWise and a few other fintechs to the global community and we should be able to do the same. Today, we have set up a fintech and payment association and that will be our flagship to drive that agenda to help move the Ghana Africa Relevance Agenda. It is our Africa and we must dominate it. There is a huge interest for Africa right now and it is only fair that the African youth can participate in the scramble. It is the fourth revolution and nobody understands the fourth revolution better than the African youth.

What is your vision for yourself and the company in three years’ time? What do you want to achieve?

Today, remittance is contributing significantly to the GDP of Ghana, $3.8 billion and the GDP is about $42 billion. In three years, we want to be contributing 80% of that. Africa has $70 billion and we want to be contributing a good 10% to 15% of that over the next three years. We will accomplish this by doing things the same way we started. My first year of operations we only did 385 transactions. Today we average about 300,000 transactions per year. Our growth rate is over 1,000% per month. It is phenomenal. In New York today, we control the market in termination business. New York is a large immigrant hub. We will do the same in England and Europe. It keeps me up at night. The biggest market I am thinking of is Pakistan and India. India alone is Africa’s total termination size. I want 80% of India.

Do you have a final message?

The journey map to growth is beyond remittance. Remittance is just a layer. There is so much that can be done on the back of that channel, including airtime, which we have just entered, bill payment across the continent, etc. Imagine flattening the world so much that your average immigrant who got into Europe through the hassle does not have to worry anymore about their children. Every month, every week, they can send home $20 or 50 pounds for their family individually. They can pay school fees, they can buy groceries, they can pay hospital bills. They can take care of their families. They can literally build ecosystems outside of their ecosystem. That is the biggest and most powerful conversation. It is more powerful than foreign direct investment because it is a story that has been built by Africans for Africans. For once, let’s just make it happen. This is a single opportunity to do that and we will do it and we have started well.

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