myZoi needs to make remittances more cost effective for migrant staff

Cash despatched residence by migrant staff not solely helps their households, but in addition enables entire economies to develop. However transferring cash comes at a excessive price to staff, with remittance charges averaging about 6.5%. MyZoi needs to chop charges by greater than half, beginning with the five million low-income migrant workers in the United Arab Emirates.

MyZoi (which suggests “my life” in Greek) introduced at the moment it has raised $14 million from SC Ventures, a unit of Normal Chartered, and Japanese monetary companies group SBI Holdings. It holds two regulatory licenses from the Central Financial institution of the UAE and is a wholly-owned subsidiary of Normal Chartered Financial institution.

The startup has two core choices. The primary is a digital remittance service that can cut back transaction prices to lower than 3%, according to item 10c of the United Nation’s Sustainable Development Goals 2030. The second is a payroll system created particularly for firms that make use of migrant staff.

MyZoi co-founder and chief product officer Christian Buchholz first got here up with the thought for the platform and incubated it below SC Ventures. Earlier than beginning myZoi, Buchholz spent 5 years main SC Ventures’ design and innovation initiatives throughout a number of areas. Throughout that point, he mentioned he talked to many low-migrant staff and located that they typically remit as much as 80% of their earnings to family members again residence, and have little or no cash left for private use or financial savings.

Buchholz was launched to his co-founder, CEO Syed Muhammed Ali, by SC Ventures, to show the idea right into a business enterprise with UAE as its pilot market. The 2 continued to do analysis concerning the issues migrant staff and their employers face.

“Low-income migrant staff are basically locked out of the formal monetary system,” Ali instructed Information World. “Companies presently supplied to them are neither joined up nor developed with their wants and capabilities in thoughts.”

Consequently, many migrant staff flip to cash-based or casual strategies of sending money residence. For instance, the myZoi workforce spoke with one girl who labored as a home helper and repeatedly despatched cash residence to her household. Since she didn’t have a checking account, she relied on her uncle as an middleman to distribute the cash. However she discovered that her uncle hadn’t shared these funds together with her family members.

Ali mentioned that many employers needs “compliant and easy options which are price efficient with a robust social influence,” whereas their staff want a “actually inclusive, complete and fit-for-purpose monetary service that might allow them to fulfill their fundamental transactional in addition to long run monetary wants.” MyZoi plans to cowl all of that by working on a B2B2C mannequin, with payroll options for employers, remittance companies for his or her migrant workforce and monetary literacy supplies.

Ali mentioned one problem myZoi needs to unravel is the mistrust many migrant staff have of monetary companies, particularly digital ones. The app is designed for folks with low ranges of monetary literacy and “based mostly on intensive analysis and human-centered design ideas.” Customers obtain their salaries straight into their myZoi digital wallets and may ship cash from there with the contact of a button.

MyZoi will be capable of maintain remittance prices down due to its digital-only mannequin, which suggests it is ready to run comparatively lean operations and decrease overheads, Ali mentioned. It’s also constructing its personal rails to restrict transaction prices in key corridors.

For employers, myZoi needs to unravel the friction of techniques that require paper-based onboarding of every worker and have hidden costs. Ali mentioned many employers “would additionally wish to see somewhat extra empathy in the direction of the challenges their staff face in utilizing monetary companies.”

The shoppers myZoi will serve vary in dimension from a couple of hundred staff to greater than 10,000 throughout completely different industries like oil and gasoline, medical, hospitality, building and retail.

Ali mentioned that myZoi will differentiate from different payroll options as a result of it was created for low-income staff. A bonus for employers is that myZoi requires no technical integration or intensive paperwork to begin utilizing. As an alternative, its consumer onboarding course of is solely digital. MyZoi will primarily serve staff from Pakistan, India, Bangladesh, the Philippines and Nepal.

In a press release concerning the funding, SC Ventures member Gautam Jain mentioned, “There are over 1.4 billion unbanked people globally. At SC Ventures, we spend money on progressive enterprise fashions like myZoi so we are able to higher serve the communities we function in. We imagine that fintech improvements equivalent to myZoi are rising because the catalyst for change. They’re constructing an ecosystem that delivers easy but significant options to low-income migrant staff, whereas providing a commercially viable and socially impactful proposition.”