Mobile money-transfer apps are now bigger in developing countries than just about anywhere else. In Kenya, for example, mobile transactions last year were up by about 20 percent over 2020, according to Capacity.
For a fee, people send money to friends and family, pay bills, and buy groceries using a mobile wallet app. The transactions are made through cellular service providers, although the funds held in a mobile money account are protected by local financial regulations.
That’s important, because most of the apps’ users don’t have a bank account.
Although mobile money is fast and easy to use, it has a few drawbacks: The transfer service doesn’t provide a separate account for savings, and there’s no way to send money to an entity that lacks a cellphone number, such as a charitable organization.
IEEE Fellow Sandra K. Johnson is working to change those shortcomings with her fintech startup, Global Mobile Finance, which is based in Morrisville, N.C. She developed the geeRemit app to let people in the United States send money to people in sub-Saharan Africa. A small portion of the fee can be donated to a charitable organization or deposited into a financial account. GeeRemit is currently in the pilot stage.
Johnson says the app’s features allow users to lend a helping hand to their friends and family living abroad.
“GeeRemit provides a social benefit by transforming lives,” she says. “The more money you send, the more you can save over time. The recipient can use that money to pay for a life-changing event such as a wedding, schooling, or starting a business. This social component is attractive for many people who send money, because they already have the mindset to help others.”
For her development of geeRemit, Inc. magazine included her on its 2020 Top 100 Female Founders list.
Johnson held a number of technical leadership positions in IBM offices around the world during her more than 25 years with the company. She left IBM in 2014. In 2018 she launched the fintech company and is currently its only employee.
She also has a consulting company, SKJ Visioneering, in Research Triangle Park, N.C. In addition, she is a visiting scholar at North Carolina Agricultural and Technical State University, in Greensboro.
After a 2007 visit to the Elmina Slave Castle, a former slave-trading depot in Ghana, Johnson had what she calls a “eureka moment.” She vowed to use her technical skills to improve the living conditions of sub-Saharan Africans.
She got an opportunity to do so in 2012, when she took the job of CTO in IBM’s Central, East, and West Africa regional office, in Nairobi, Kenya. Part of Johnson’s job required her to travel as the company’s technical leader in the region. She noticed that people were using mobile money to pay for just about everything.
“GeeRemit provides a social benefit by transforming lives.”
“Even though this is a cash-based society, no one uses cash,” Johnson says. “They all pay through mobile money. Kenya was where mobile money became a success.”
During her trips back to the United States she sometimes transmitted money to Nairobi to pay bills, but the process wasn’t easy.
“I experienced the challenges of slow transfer times and very high fees,” she says. “I coupled the two experiences together and decided to create this money transfer app.”
DATA IS GOLD
Johnson is looking for ways to analyze the data she’s collecting so she can discover new ways to allow customers to send more money or provide some other benefit.
“The issue with a money-transfer protocol is that it needs to be fast and low-cost. But it also needs to require as little data as possible,” she says.
One benefit might be to send the app’s users reminders of upcoming birthdays to prompt them to send a cash gift to friends and relatives. She also would like to use analytics to determine whether a user needs to save money for college, say, or for starting a business. The app would then suggest the person set aside money.
“There’s a certain segment of the market that’s attracted to the additional functions and features,” she says. “We’ve done some market research, and potential customers are willing to pay up to 2 percent more for this service.”
Johnson says her main challenge is finding funding. She has spent the past few years raising money, mostly from friends and family but also through crowdfunding websites such as ifundwomen.com, which helps female founders. Johnson also received money through angel investors and a government-regulated fundraising program. She applied for several grants, including a special American Express program for businesses owned by Black women.
Johnson says she’s stuck in a Catch-22 situation. To sell investors on her app, she says, “we need market traction, and to get market traction, we need funds to get to the market.”
Another hurdle is that the business of transmitting money is heavily regulated in the United States. Each state requires a money-transmitter license, and fees for the license can range from a few thousand to a few hundred thousand dollars. Because Georgia’s fee is the least expensive, she’s running the pilot program for the app in the Atlanta area.
The early adopters who are using the app are so far only transmitting money to Ghana and Kenya. She doesn’t need to obtain licenses in those countries, she says, because she has partnered with a global payments network that already has licenses there. GeeRemit has been integrated on the network’s front end, and the delivery of funds is handled on the back end.
“Right now, we have a license and a focus,” Johnson says. “As we generate revenue from those using the service in Georgia, we have a plan in place to obtain licenses in other states.”
Kathy Pretz is editor in chief for The Institute, which covers all aspects of IEEE, its members, and the technology they're involved in. She has a bachelor's degree in applied communication from Rider University, in Lawrenceville, N.J., and holds a master's degree in corporate and public communication from Monmouth University, in West Long Branch, N.J.