Ewala is a Brussels Belgium based financial services company founded by Stéphane Ugeux and Sinouhe Ferreira Monteiro Nunes that helps diasporas send airtime overseas. Launched with an investment of 500,000 EUR, the company is now at a turning point as, in addition to its online platform, it has added cards as a tool for using its services. The start-up has featured in the national press and various international fintech events. Due to the small amounts involved in airtime transfers, Stéphane and Sinouhe, who have Burundian, Belgian, Angolan, and Portuguese origins, are preparing for the next jump: money transfer.
But money transfer is a sector that sees a raging competition between historic global players, telecoms operators and a handful of new entrants. Consequently, fees are going down and new products are flooding. What the future holds for Ewala?
Patrick Gaincko: Can you update us on Ewala’s progress?
Sinouhe Ferreira Monteiro Nunes: We are growing at a monthly rate of 20 percent in terms of volume of transactions. We are now trading in 148 countries. That means 500 operators and 4.5 billion handsets.
PG: Can you walk me through how Ewala works? Let’s say I’m a farmer in Guatemala who needs financial support from a cousin living overseas: how can I use Ewala?
SFMN: Very simple. Your cousin goes on our website, picks Guatemala as the country he wants to send the airtime to – in your case, Guatemala, then he determines the amount he wants to send. He can see immediately the equivalent sum in the local currency, then a recap shows up. He pays with his credit card or debit card, and gets a confirmation of the transaction on his phone. You receive the airtime on your phone. You can now call your cousin and move forward.
You can use airtime for calls, you can also convert airtime into data for internet access, facebook, whatsapp, etc. You can use it to do a swap whereby in exchange of a bus ticket for instance, you can transfer your airtime to the reseller. In certain countries, you can convert airtime into cash. We have seen that in certain circumstances, like high inflation, airtime was fully and legally used as a currency.
PG: How important is it for you to eye at money transfer as your next destination. Airtel, MTN, Safaricom, Vodacom and other telecom operators are heavily investing in the development of mobile money. The average Kenyan or Ivorian now enjoys an ever-growing range of services and capabilities. In some countries, you can now save and take short-term loans using your phone.
SFMN: Money transfer is really what we want to do. On the technical side, we need a licence from the National Bank of Belgium. To get this licence, we need to send a technical application. However, as we speak, our top priority is to improve the user experience on our platform whereby the customer receives a step-by-step assistance during the transaction.
A challenge with airtime is that there is not a huge awareness to begin with. Many people don’t know they can send airtime from Europe. We are dealing with mature consumers in the diasporas who used to send cash through a physical process. We want them to become familiar with digital.
In parallel, we are readying our technical application because what diasporas really want is money transfers. We also need to go through another funding round. We’ve sent a few applications to investors. It can take between up to six months before the money lands in our account.
PG: What type of investors are you working with?
SFMN: We work with Belgian investors like Meusinvest. Belgian investors are our priority because if they invest in us, they’ll have interest in pushing for our success nationwide. We also work with funds that want sustainable businesses, those that are aligned with the UN SDG’s. We are positioned on the tenth SDG: reducing inequalities. We are in this game for lower fees. Let’s empower communities by enabling them to send money without being ripped off by expensive intermediaries.
PG: How much money are you looking for and what will it be used for?
SFMN: Between 500K and one million. It will serve to finance the second version of our platform which will integrate all major operators like M-Pesa. We want to do mobile money and cash pickup. Even though mobile continues to grow in Africa, the reality is that we still have to educate consumers, here and overseas.
PG: Diaspora consumers in Europe have a key role to play in your pursuit as they are the ones who will educate beneficiaries and potential customers. What’s your approach for winning their buy-in?
SFMN: It’s B-to-B-to-C. We’ll give our platform to local business owners for them to proceed with the airtime transfer on behalf of the customer. What we found is that several communities – particularly older generations of migrants – live among themselves, they brought in families, they created a local economy or they work in the same industries. Therefore, if we can partner with the local businesses that cater to these communities – the neighbourhood butcher shops for instance, then we can win the trust of the customer. As these businesses act as meeting points and key opinion leaders in the migrant communities, they can play a role in consumer education.
PG: You have deployed a whole campaign to introduce yourself to consumers, going where they congregate to do demonstrations or to pitch the product. You have also chosen to involve them in the testing phase of the product and have asked them to weigh in for the design of the card. What feedback did you receive?
SFMN: I would say that one challenge is the novelty of the service. Their first objection was “is it real?”, then “does it really work”, then “is it secure?”. Then they wanted to know if it really works and if it’s secure. Nevertheless, aside all the questions, we had our share of few aha moments.
The first aha moment occurs when the customer receives the confirmation of the transaction on their phone. The second aha moment occurs when they call the beneficiary and the latter confirms they have received the airtime. You can see the joy, the big banana smile.
PG: Your work environment has dramatically changed in a sense that you now have a physical product, offices, teams and a concrete validation in the form of press articles and a clientele. What are the capabilities that you want to acquire at this stage?
SFMN: Manpower and funds are what we crucially need to expand the network of resellers. Right now, we work with interns. But this is far from ideal because we, the founders, have to train them. And it is extraordinarily time consuming. What we truly need is seasoned sale people.
Confirmed business developers will know how to win over certain resellers who appear to be a tough audience: they’re only interested in selling, they aren’t championing a product or educating customers. Perhaps they have long-held habits, perhaps they aren’t good at communicating with customers… So it can be difficult to convince them to broaden their role.
Personally, I love the challenge of taking people from offline to online. It demands a lot of energy and a lot of time as I have to explain, explain, and explain. I’ve just finished a session with our marketers where we’ve been focusing on the value of Ewala, beyond the features.
PG: Entrepreneurship is a rollercoaster ride. It’s constant pressure, difficult choices. It’s not glamorous. However, there are always lessons to learn about many things particularly at the beginning of the journey.
SFMN: I’ve learned a lot of things about myself. I’ve learned how to work with people. I’ve learned a lot about different cultures. I’ve always wanted to help people, so here I have the opportunity to grow in terms of understanding the real needs of people who are in front of me.
I’ve learned to say no. I’ve always struggled with the notion of saying “no”, thinking that it would make the other person feel bad. It can sound naïve, but I’ve learned that sometimes you have to say no and stop. It’s not good to be in a comfort zone, it’s very dangerous actually.
In our industry, I’ve learned that you have to be on the ground a lot, you have to have patience. The most important thing is that every day I wake up with a lot of motivation. Even though I don’t make tons of money, I wouldn’t change a thing. I’m very happy to be doing what I do. Every day I learn something new, I love that. I feel that the more we learn, the deeper we change, the better we manage the business, the further the business goes. I had no idea that that was possible. The more we change, the more Ewala changes and grows.
PG: Talking about change, what’s next for Ewala?
SFMN: One milestone we’ve talked about earlier is the new funding round. Another one is figuring out the value we can gain from resellers. We’ll explore all avenues that lead to bigger and better partnerships with them.
In dealing with them and also going back to your previous question, one thing that I’ve learned in this adventure: kill the ego! I had such a f-!-ing ego in the past. I’ve learned to look at it in a mirror and kill it. It wasn’t good in this business.
PG: The competition is heating up in the money transfer sector with some big players reducing fees and expanding the range of platforms – mobile, online, offline. Also, they are taking money transfer to mass consumers, far beyond the obvious, initially targeted consumers. They apply money transfers to birthday gifts, student support, etc. How do you make a difference?
SFMN: We are creating a sustainable product for communities. We are transparent. Our product was created by two people who have lived in countries that rely on remittances, in families who used to receive that money for vital needs, families who had to flee their country, families affected by what other remittance-depending families go through in life.
Therefore, when people put their money in Ewala’s hands, they contribute to a social impact.
We want to help people who are conscious about fees, looking for quality and willing to have an impact. We are not upping fees like other players do. This being said, we are not focusing on fees, but rather on quality.
We are organizing initiatives for financial education in the diaspora communities.
PG: Diasporas want to be more than mere consumers in Europe and mere money senders for their home countries. Increasingly they want to have an impact, they want to be a part of social change and economic growth overseas. They are ideally positioned to be game changers as they can leverage their financial and digital resources.
SFMN: I couldn’t agree more. These ambitions give birth to a serious hunger for entrepreneurship and leadership from the diaspora youth and professionals. We want to be part of this dynamic. It’s not just “give us your money” like others do.
PG: You go in the arena to face different diasporas from North Africans to Latinos to sub Sahara Africans with a couple of traits that they may associate with risks and that they see as question marks: your youthfulness, your start-up, your ethnicity. How hard was it to earn credibility?
SFMN: At the beginning we had nothing, no network, no capital…but that wasn’t that demotivating. What was really hurtful was the huge amount of pessimism that we came across. The very people you’re trying to serve, to partner with, telling you that it’s impossible. It was a huge amount of negative feedback constantly. Luckily, we found a couple of people who offered guidance.
One day a friend came to visit. He organizes the Start Up Weekend in Europe. He said “I think you should go to the Fintech Weekends and talk about your idea”.
Stéphane had stopped the university, I had stopped working, we had no money… We got two free tickets to the Fintech Weekends and worked hard on the pitch. We ended up being shortlisted among the nine best ideas. Specifically, our idea caught the attention of two important decision makers at the event.
We went from being an idea nobody wanted to believe in to being a proof that something was happening in emerging markets. That’s what the two decision makers saw in us: Africa is progressing. They didn’t look at us like an NGO, but rather as something that made commercial sense. You can do business from Europe to Africa by using an intelligent tech process.
Unfortunately, we didn’t win the biggest prize. And we kept on hearing “it’s a waste of time”, we kept on getting negative feedbacks, like “it’s either Paypal or credit card”. Then, we met our current incubator who made clear that they knew nothing about mobile money. They loved our energy and said: “Here are the conditions for working at our place, there’s a small table if you want”. We showed up there the next day, we snatched that table!
I think they appreciated our hunger. “Impress me, show me” they said to us. How to tell you how great we felt!? It was a much needed, stark, revealing departure from all the barriers and stereotypes that people had been throwing at us.
PG: Ultimately, what would you say is the contribution you’re doing through Ewala?
SFMN: It’s educate people on the power, the potentials of digital. With Ewala, people can send small amounts of money and give so much and give to other people what Stéphane and I painstakingly received: empowerment.