April 20, 2024

Wind.app: Can you facilitate international payments?

Within months of its launch, big-name investors such as Global Founders Capital and Spartan Group have placed their bets on Wind.app, raising $3.8 million in pre-seed funding. The financial start-up wants to make borderless payments a reality for everyone

When we heard about Hussain M Elius, the man behind Pathao and ‘Is Tomorrow Hartal?’ has launched a decentralized finance startup called Wind.app, which promises to make borderless payments a reality for everyone, we had to know more.

Wind.app, at its core, is a “self-custody” and “smart contract” digital wallet that runs on blockchain technology and provides a number of services to streamline cross-border payments.

Self-custody means that only you have possession of your digital money or other digital assets because you control the private key. The smart contract is a program stored on the blockchain.

A really novel idea, but where did it come from?

“Before Pathao, I was also freelancing. I was always creating websites and I know how difficult it is to bring money into the country. There is always the problem of exchange rate fluctuations. Even if someone sends you money, you have to pay very high fees. high to access it.”

“Quick transactions are quite expensive, especially when you don’t make a lot of money. There’s a flat fee of $20 to $40. And if you only make $300 to $400 from a customer, that’s a lot,” Elius said. . while he tries to explain how difficult it is to bring money into the country.

But in recent times some solutions such as Pioneer or Wise (formerly TransferWise) have appeared. So why not use them? “They also charge high fees. Additionally, they have a habit of blocking users’ accounts due to KYC,” Elius said.

The Know Your Customer (KYC) process is carried out to verify the identity of new customers and prevent illegal activities such as money laundering or fraud. KYC is carried out as part of anti-money laundering (AML) requirements.

According to Elius, Bangladesh does not rank very high on the KYC list. Many people, including him, have had their accounts blocked through no fault of their own more than a few times while trying to earn money from abroad. That was a big problem.

“So, I thought, there’s probably a better way to do this, like having a self-custodial wallet. We can solve all these challenges of high fees, locking your account, etc.,” Elius explained.

This is how the idea of ​​the Wind application was conceptualized and Elius decided that it was an interesting problem to solve. The problem was fascinating enough to move away from Pathao, which by that time had become a local startup giant.

“Pathao continues to take new steps, but I always wanted to do something on a more international scale. Pathao is a Bangladeshi technology champion, but there is not much room for international expansion. So I left Pathao and almost immediately started working on this,” Elius said.

Leaving the company he co-founded and guided to massive success was not easy for him. “It was definitely difficult. I obviously had a lot of emotional attachment to the company and the people who built it. But sometimes you have to let things go in order to grow. I felt like my growth would come from doing something new. “

“I always wanted to be a serial entrepreneur, and the goal of being a serial entrepreneur is to do more things and start more than one business,” he added.

Wind.app wants to make money as free as possible, in two steps.

First of all, according to the team behind Wind.App right now, most people have a lot of money. There is cash. They have accounts in different banks; They have accounts with MFS like Nagad and bKash. Some investors have brokerage accounts and others have treasury bond accounts. Others have savings certificates. The list goes on.

“So the assets we have are really very fragmented and we wanted to bring all the features together, whether it’s a bank, an investment or a savings, all under one roof,” Elius said.

Additionally, “we want to make sure that even when you travel, you can use the same Wind account in multiple currencies and in multiple locations. That’s why we chose the name Wind: we want it to be as free as the wind.”

In terms of functions, Wind.app offers its users the possibility of opening a kind of virtual bank account through which they can receive money from anywhere.

They also allow users to withdraw money in their local currencies. So, the number one basic feature is: cash deposit and withdrawal, but internationally.

Second, Wind users earn interest on their savings of up to 7-8% of their US dollar balance. This facility is attracting a lot of attention and that has been the marketing strategy of the app.

There is a third feature they want to introduce later: a debit card through which one can also use their Wind balance to make payments in the real world.

Wind currently has a small team of 25 people spread around the world. They have employees in the Philippines, Singapore, Dubai and the United States, with offices in Singapore and the United Arab Emirates.

“We have a very diverse team. Wind.app wants to be a global company and that is why we need a global workforce,” explained Elius.

Wind is based in Singapore and is not yet available in Bangladesh, although they have assured that they plan to launch their operations here very, very soon.

The decision to establish its headquarters in Singapore was made after considering aspects such as regulation and financing. “If I ask a Singaporean investor to invest in a Bangladeshi company, it becomes quite a complicated proposition for them as they are not familiar with Bangladeshi laws. And some of our laws are not easy to deal with. So Therefore, it is easier to have a holding company outside of Bangladesh.”

Bureaucratic red tape emerged as another reason why we don’t see more tech startups in Bangladesh during our discussion.

“If you work in field technology, you need to have a license. And to get a license, there is no fast track in Bangladesh. At Pathao, it took us many years to get our PSP license, while Wind.app is licensed in Europe. and in Dubai and that only took us a couple of months,” Elius said.

“So it’s easier to start over from both a time and cost perspective,” he added.

Within months of its launch, Wind.app has facilitated over $3 million in annualized gross transaction volume (GTV). Big-name investors such as Global Founders Capital and Spartan Group have placed their bets on Wind.app, which has raised $3.8 million in pre-seed funding.

But they have had to face some challenges to get here. Setting up the infrastructure was complicated as they work with multiple different currencies; Establishing separate compliance guidelines for different countries is also a big challenge.

“Because when you work in finance, you really have to worry about KYC, AML, sanctioned countries and sanctioned individuals,” Elius explained, adding: “Another big challenge is liquidity. How do you send money as cheaply as possible? The partnerships made with banks or payment aggregators are time-consuming.

One way they have addressed these challenges is by harnessing the power of decentralized finance (often stylized as DeFi). Decentralized finance offers financial instruments without depending on intermediaries such as brokerage houses, exchanges or banks through the use of smart contracts on a blockchain, mainly Ethereum.

Elius believes that decentralized finance allows more people to be given the option to participate in the financial system.

“It has its own pros and cons. But I like the fact that we can offer our users 7 to 8% interest on their US dollar balance. We can offer this to any user, anywhere in the world. That’s not possible. in a traditional financial model where it is necessary to be regulated country by country,” said the founder and CEO of Wind.app.

So where will the wind take him? Perhaps towards new frontiers and new market segments.

Elius believes that, ultimately, internal payments are sort of a solved problem in many ways. “It’s a solved problem and it’s very low cost, whereas international payments are not; it’s extremely fragmented. There are many different currencies, many different banks. There are many different payment methods. Our exchange rate fluctuates by the hour” , he explained.

There are indeed problems that need to be solved, and Elius believes that those who can solve them will add a lot of value, especially for people who make money abroad.

Its main focus at the moment is the freelancer market segment, which is a major recipient market. But there are many more types of potential users.

“In Bangladesh, the migrant worker population sends more money into the country than the self-employed receive. They lead by a factor of 10. Therefore, there are other segments of the market that we can target after we have discovered infrastructure and how to send and receive money as cheaply as possible,” Elius said.

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