Revolutionising person to person cross-border payments

Diaspora remittances have continued to remain an important contributor to the country’s growth and development. Remittance inflows to Kenya have increased tenfold in the last 15 years .This phenomenal growth points to the importance of remittances as a source of foreign exchange to the country, equivalent to more than three per cent of Kenya's GDP.We spoke to Zepz Group CEO Mark Lenhard and Chief Product Officer Will Fogel on the remittance market and the company’s role in driving growth in the sector. Zepz, formerly WorldRemit Group, is a digital cross-border payments platform operating two market-leading brands (WorldRemit and Sendwave, acquired in 2021), with over 11 million users across 150 countries.

Tell us about Zepz Group

Zepz is the holding company operating WorldRemit and Sendwave. The company was founded about a decade ago with the flagship brand WorldRemit to bring an offline industry to an online future. We enable people to send money across the world, an estimated $1 trillion market opportunity which continues to be predominantly offline and is characterised by high prices and poor customer experience. The group reaches over 5,000 money transfer corridors, including emerging markets with high barriers to entry, establishing digital connectivity into geographies that had previously been underserved. WorldRemit and Sendwave brands offer a faster and more flexible user experience at fairer prices.

What are the main uses of remittances in Kenya? 

Mostly from our surveys we see remittances going towards education, healthcare and basic needs in households.

Transaction costs have remained high in some cases more than double the Sustainable Development Goal target of three per cent. As a company, what are you doing to bring down costs?

We agree that the cost of sending money particularly to Africa is high. We have been keen on driving that cost down and that is why for example our Sendwave platform does not charge fees. At WorldRemit, we are sensitive on pricing and we ensure that we give our clients affordable terms.

How does WorldRemit operate in Kenya, do you have physical presence in the market?

We work with a large number of partners to enable recipients pick up the money sent to them. This is through mobile platforms such as Mpesa. We also have agents and partners such as banks that we work with. In Kenya, mobile money remains the most used. We also have about 200 employees in Kenya.

How would you describe the Kenyan market?

It is one of our best especially the talent that we see in this country. It is a tech hub that has the capacity to power the world. Mobile money for instance is big in Kenya among other innovations.

Zepz just released its results the other day. How would you describe the performance noting the tough times companies have been going through since the onset of the Covid-19 pandemic?

We continue to maintain strong growth. Both our brands have maintained a great reputation in the market. The remittance market has also been strong despite the global factors that tend to slow down economies such as recessions, war and the Covid pandemic.

The Kenyan market has recently recorded a drop in remittances. What could be the reason?

Generally, year-on-year performance has remained strong save for a few months where trends have changed. This is mainly as a result of tough economic times but people continue to send money back home to support families and friends. We are likely to see an increase going forward as inflation in many countries starts top ease. Meanwhile we have seen people adjust lifestyles to be able to save and send money back home. This is according to a survey we did recently. Expect this to continue.

What is the biggest mode of receiving money in Kenya?

I would say mobile money is the biggest channel of receiving cash in Kenya particularly Mpesa. There is also a huge traffic on bank accounts. The shift towards digital platforms will continue shaping the industry, as the customer of today equally demands faster and convenient ways of sending and receiving money.

What will be the growth driver at Zepz going forward? 

Innovation and of course the customer. We aim to continue improving our products, making them easier to use and convenient to our customers. We also plan to expand our presence across the markets. There is a huge opportunity to expand as markets recover.

Any partnerships in Kenya? 

Yes, we work closely with the likes of Mpesa to connect senders and receivers. We also work with banks. 

What does the future look like?

I think we are going to see more movement towards digital as markets evolve. This is likely to help lower the cost of sending money across markets, improve security and ensure convenience and formal ways of doing business. This means governments will also get the right taxes. 

Talking of formal, we still have informal ways being used to send money such as the Hawala. What would you tell the public? 

Use our service! …..it is always good to use the formal and transparent channels where you can be sure your money is safe. Always use regulated platforms where there is a guarantee of safe transactions.

Anything that ZEPz is doing to give back to the community?

We feel like our core business model is like giving back to the community. We also create jobs and on top of that we give to non-profits and invest in environment related projects. We are also keen on setting up a platform where individuals can be able to donate towards particular courses.