Australia’s financial regulators got suspicious of some of international money transfer company WorldRemit’s customers with surnames like “Goodnews” and “Kissmore”, suspecting they were fake names used for fraudulent transfers.
But CEO Ismail Ahmed told Business Insider at Money2020 Europe in Copenhagen this week that the names were genuine — the customers were from Zimbabwe, which apparently has a lot of unusual names Ahmed says.
Other odd names include Loud, Easyway, Clever, and Sugar. WorldRemit’s country manager in Zimbabwe is called Pardon, for instance, which has caused some confusing phone conversations.
Ahmed mentioned the point about surnames as he was talking about the increasingly vital role regulation and good compliance is going to play in the success of many fintech startups as they grow.
Serendipitously, just after we spoke, the Financial Times published a piece highlighting fines and enforcement action from US regulators against TransferWise, which plays in the same space as WorldRemit.
Unlike TransferWise, which uses the licence of banking partners in the US, WorldRemit is fully licensed there, receiving its Californian seal of approval in January — the final piece of the puzzle.
Taking this path, rather than TransferWise’s approach, has been difficult. WorldRemit was forced to make layoffs in the US last year in part because the process of getting regulated was taking longer than expected.
Ahmed says he had to scan his finger prints on an FBI-approved scanner as part of the process but it was rejected for not being clear enough — just one example of the hoops the company had to jump through and the delays faced.
But, Ahmed says, that difficulty is a necessary part of the business. He says fintech startups should stop viewing regulation as a cost that can be shaved and cut down on and realise it’s an integral part of the business. Best in class compliance and regulation can be a big selling point in financial services if you know how to sell it.
Somali-born Ahmed was formerly anti-money laundering advisor to the UN and in fact blew the whistle on fraud and corruption at the UN Development Programme in Nairobi. It resulted in his dismissal and threats from within the organisation but he ultimately won his case at the UN Ethics Committee.
WorldRemit processes over 400,000 transactions a month, focusing on the remittance market — migrants sending money back to family in their home country — and mobile wallets.
WorldRemit says it had revenue of £27 million last year, up from £15 million in 2014. The company made a loss of £10 million in 2014, the most recent period accounts are available for.
6-year-old WorldRemit was valued at $500 million (£349.8 million) in a $100 million (£69.9 million) funding round last year. The company secured a $45 million (£31 million) line of credit from US growth fund TriplePoint Venture Growth and Silicon Valley Bank in February.-Business Insider