BlueKite is taking on the difficult task of changing the way payments are made by the unbanked or under-banked across the world

By Editor January 29, 2013

BlueKite logoA Q&A with BlueKite co-founder and CEO Bobby Aitkenhead. The Miami–based company was founded in 2012 and closed a $1.5 million Seed funding round in early-January led by the founders and PeopleFund.

SUB: Please describe BlueKite and your value proposition.   

Aitkenhead: BlueKite is a technology company that develops solutions and applications that improve the way people around the world pay for services and utilities. We currently market a proprietary cross- border payment platform that allows people to safely and accurately pay utility bills—electricity, gas, water, Internet, cable, and phone—from abroad. For example, our technology allows a person in the U.S., to pay, in real-time and with up to the minute balance information, bills for other countries. BlueKite is the ideal complement to traditional cash remittances. By facilitating bill directed cross-border payments, BlueKite allows immigrants to better care for the family members they left behind.

BlueKite offers affiliated money service stores a unique, state of the art, web-based platform that allows them to make real-time cross-border bill payments for services around the world. Payments are safe, accurate, reliable and guaranteed. By using BlueKite’s free platform, money service stores can now provide immigrants a new and innovative service that lets them pay their loved ones’ utility bills, instantly, from the money store directly to the utility company in the foreign country.

BlueKite enhances the entire post-pay service value chain. First, by allowing immigrants visibility and control over the money they send. Second, by reducing the hassle and problems incurred by families paying their bills locally. Third, by helping utilities significantly increase collections. And fourth, by providing a new service that cash stores can use to increase their product offering and increase their revenue base.

SUB: Who are your target markets and users?

Aitkenhead: In terms of users, we’re currently targeting immigrants to developed nations who are unbanked or under-banked—those who traditionally send money to their families abroad, and do so through cash stores and money service businesses. We want to offer our product everywhere quality cash remittances are offered so that immigrants to developed nations can pay bills in developed nations worldwide.

Because we’re serving the unbanked and under-banked population, BlueKite isn’t currently available as a consumer-facing product, although we’re considering releasing a web front end or mobile interface to our service in the future. We already have the API built for that, but for now we’ve chosen to focus only on cash stores and money service businesses as our distribution platforms.

SUB: Who do you consider to be your competition?

Aitkenhead: Many people see traditional remittance providers like Western Union and MoneyGram as our competition, but we don’t. BlueKite isn’t in the business of sending cash remittances, nor will we be. Therefore, we really see ourselves as entering a new space that will complement current remittance services. Put simply, we don’t think someone else has to fail for us to succeed.

There are many immigrants who will still need to send cash remittances, and they can do so with traditional remittance providers. And when it comes to sending money for a defined purpose such as utility payments, they can take advantage of BlueKite’s service and conveniently pay these bills directly.

SUB: What differentiates BlueKite from the competition?

Aitkenhead: Our product is different from anything out there. In terms of cash remitters, we think our value proposition and product offering are significant differentiators. In terms of other possible competitors in the bill pay space, we think we have a product that in essence has taken bill pay to the next level. We are the only ones that offer balance information in real time and allow for bills to be paid instantly. We also have a very simple and clean product that should be easy for cash stores and final consumers to adopt. Finally, our technology, revenue sharing model, 100 percent guarantee, and contact center make a greater difference.

SUB: When was the company founded and what were the first steps you took in establishing it?

Aitkenhead: The company was officially founded in April, 2012, although we had been working on the idea since late 2011. Our first step was to put together the right team with the skills to execute our idea. I believe we now have both experienced managers and advisors who will help ensure that BlueKite stays focused on correctly executing our strategic priorities.

SUB: What was the inspiration behind the idea for BlueKite? Was there an ‘aha’ moment, or was the idea more gradual in developing?

Aitkenhead: BlueKite came from the desire to apply technology to improve financial services in emerging markets. I have a background in finance, and my two co-founders, Jose Vargas and Matias de Tezanos, are very successful entrepreneurs in the technology space. We talked about the need to improve many financial services in Latin America, especially among those who are unbanked and under-banked and developed the concept gradually.

SUB: How did you come up with the name? What is the story behind it?

Aitkenhead: Blue comes from ‘Blue Ocean Strategy,’ participating in ‘Blue’ markets where the opportunities are ample. The Kite is for ‘flying,’ for building something that can scale. Also, we really like the name because we can do fun and innovative things to build a brand around the Kite.

SUB: What have the most significant obstacles been so far to building the company?

Aitkenhead: The most significant challenge has been building the technology. The project is very technology intensive because we built, and continuously enhance, a core API that is capable of ‘hooking up’ to billers accounting systems on a large and very efficient scale, while also processing, in real time, balance and payment requests. In addition, that same API has to be able to communicate with a variety of platforms, which brings forth several technical challenges. There is a great deal of first class technology that goes into doing that efficiently, accurately, and safely.

The second biggest challenge is regulation. Here in the U.S., and in most developed nations where we look to provide our service, there is a great deal of regulation for AML around cross-border payments and anything that is cash receipts and cash transfers abroad. In order to operate in most states in the U.S., we have to get a special permit or a money transmitter license. Both of these are issued per state with applications and requirements varying significantly from state-to-state.  Money transmitter licenses are not easy to come by. That has been a challenge. We are currently licensed in Florida, and have received permission to provide our service in Texas, South Carolina, New Mexico, and Montana, and we are working on more states as we speak. The third challenge has been getting a hold of the right people at the payment gateways or utility companies in Latin America, getting a foot in the door and getting down to signing contracts and getting our technology team in there to hook up billers and increase our portfolio.

SUB: You just raised $1.5 million in Seed funding. What are your plans for the new funds?

Aitkenhead: We’re very excited about our recent funding. This will allow us to make significant investments in technology, portfolio growth, marketing and distribution. In addition, we’ll have some room available for a few potential acquisitions that we have in mind. We expect the funds will be enough to take us at least through the next six to nine months when we expect to turn cash flow positive. We have already gone to market and expect to really validate the concept and model here in Florida during Q1.

SUB: Why was this a particularly good time to raise more outside capital?

Aitkenhead: Because of the positive response we have seen while validating on the streets and while continuing to find partners. We now feel that we’re ready to expand a bit faster, increasing our portfolio to many more countries, including the Dominican Republic, Ecuador, Colombia, and increasing our distribution potential in Spain and in many more states in the U.S.

SUB: How does the company generate revenue or plan to generate revenue?

Aitkenhead: We generate revenue by charging a flat fee of $4.95 per transaction.

SUB: What are your goals for BlueKite over the next year or so?

Aitkenhead: We’re currently in 40 stores in Florida, and we’re aiming to be present in 400 stores in Florida by the end of the first quarter. In addition, we’ve been pre-approved in five additional states, and we want to be present in all of them by the end of the first quarter.

Our first non-U.S. stop will be Spain, where we plan to launch at the beginning of the second quarter. Here, however, we’re still trying to determine the right price point in a market where clients are less used to transaction fees, and more used to paying extra for currency exchange or getting unfavorable rates.

Our focus will be on adding more billers in Latin America, Southeast Asia, and Africa as well as expanding distribution to all of the United States and Spain. We will also be working on direct-to-consumer efforts through mobile platforms.

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