By Michael Aleles, Quippi founder and CEO
Elevator Pitch: Quippi helps consumers living in the U.S. financially support their family and friends in Mexico by offering a fee-free alternative to the costly remittance services that charge high fees and hide extra charges through currency exchange rates.
How can I provide a financial service to a consumer and not charge any fee whatsoever? That was the original premise on the paper napkin that became Quippi. We offer a fee-free alternative to expensive remittances via the Quippi International Gift Card Center.
Consumers in the U.S. can buy a gift card to share with their families back home (initially in Mexico), and they pay absolutely no fee whatsoever. Who pays the fee? The retailer covers the cost to help drive consumer traffic to their stores. It’s similar to when you walk into your local drug store to buy a gift card for your favorite department store. You don’t pay a fee for that either. Why should immigrant consumers be any different?
Gift cards from the Quippi International Gift Card Center are offered in denominations of $25, $50, and $100, and can be purchased at www.quippi.com with a credit card, debit card, or cash. Cash purchases can be completed in participating 7-Eleven, ACE Cash Express, and Family Dollar stores via PayNearMe, the electronic cash-transaction network.
Family and friends in Mexico can redeem gift cards at more than 3,400 locations, including Chedraui, Coppel, Office Depot Mexico, Farmacias Benavides, FarmaTodo, and Opticas Devlyn retail and pharmacy stores.
My experience of living and working in Latin America for almost ten years gave me first-hand experience to see how consumers, in particular those at the bottom of the pyramid, get the short-end of the stick and pay the highest fees. I was inspired to start Quippi to help these consumers, and disrupt an industry that is in need of disruption. In my case, Quippi is the perfect combination for me, as it blends Silicon Valley know-how from my years investing in startups with Intel Capital and emerging market experience from my time spent in Latin America. I am fortunate to have been able to build a great team around me to execute and grow Quippi into a great company.
Why is this an opportunity? And why now? Consumers send over $500 billion dollars across borders every year. Over $23 billion of that goes to Mexico from the U.S. Remittances are, in fact, the second largest source of income for the GDP of Mexico, only exceeded by the oil industry.
Right now, we’re focusing on the U.S.-to-Mexico corridor, the largest single demographic group among the U.S. Hispanic market (the fastest-growing segment of the American population).
We have taken the existing domestic gift card business model and applied it internationally. We make money when we charge our retail issuers a fee. Quippi is not unlike a media business, in that media companies charge for impressions. Gift cards are basically another form of an impression, disguised as a financial product. We simply apply the best practices from gift cards and apply that to cross-border finance.
Consider the use of the cash that is sent home by immigrants. How are those funds used? Granted, some of that is spent on things like taxes and rent, and we do not pretend to address those needs, but the bulk of funds are spent at retail, and that is the need that Quippi addresses.
How We Differentiate From the Competition
There are two factors that make Quippi unique and different from any other similar service. First, gift cards from Quippi can be only redeemed abroad; and second, we don’t have any hidden fees for the sender or receiver.
Who sends money to Mexico? It’s the people who came to this country to build a better life for themselves and their families. We reach our customers where they shop, work, spend their free time, and congregate with friends and family. This ‘underbanked’ consumer is somewhat elusive and not always reachable by traditional means, even in their native language of Spanish. Rather, consumers are much more likely to gravitate to services which connect on a personal level, which is why grassroots marketing is so important for this market segment.
We are fortunate to count on a great group of investors and advisors who have helped us launch and grow our service. Our Series A was led by Avalon Ventures and also included Accion Venture Lab and several other individuals. We also have as part of our investor group several high net worth individuals from the retail and technology sectors in both Mexico and the U.S.
We’re looking to expand our partnerships with retailers in both the U.S. and Mexico. In the U.S., that would include strategic partnerships with supermarket chains, national retailers, gas stations, and venues where gift cards are typically sold. In addition, we’re looking to grow the Quippi team and hire more staff on the business and customer service side.
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Headquarters: San Diego, California
Founder: Michael Aleles
Investors: Avalon Ventures, Accion Venture Lab, private investors
Year Founded: 2012