mHITs Limited is a Canberra-based FinTech mobile remittance pioneer that has developed a simple way to tackle the problem of global wealth inequality.
For migrants, sending money home to families overseas can be problematic if the recipient does not have a bank account. According to Harold Dimpel, the founder and CEO of mHITs, there are about 2.5 billion people in the world who do not have a bank account (the unbanked) and there are about 4 billion people in the world who do not use a bank account regularly (the underbanked). This might be because they do not have a job, a regular income or they are not formally engaged in the economy.
Harold founded mHITs in 2004 and the company has found a niche in providing a low cost SMS payment service aimed at individuals wanting to make small regular payments overseas (remittance) of typically around $250. Now sending money to over 35 emerging countries in Africa and the Asia-Pacific, the mHITs Rocket Remit service allows anyone with an Australian mobile phone to make instant payments to their family and friends overseas.
According to the World Bank, in 2014, over US$640 billion was sent in remittance globally. By comparison, global foreign development aid was less than a quarter of this amount at approximately US$135 billion. What makes remittance different from foreign aid is that funds are sent directly to the individual people who most need it. In many emerging markets, a substantial percentage of GDP is from inbound remittances which generally flow from wealthier countries to poorer countries. In many instances whole communities are supported by one family member working overseas and sending money home.
Traditionally, banks and money transfer operators have provided international remittance but the introduction of mobile phone technology and mobile money systems has disrupted this sector. Now funds can be sent directly to a recipient via a mobile money system using their mobile number as the account number. mHITs pioneered this technology and was the first in the world to demonstrate a cross-border transfer via mobile money.
Today mHITs is Australia’s fastest growing, independent mobile money remittance service. The company has won numerous business and innovation awards. Driven largely by organic growth and private investment, mHITs has received support from the ACT Government through an Innovation Connect Grant and has been a winner of the 2014 ACT Chief Minister’s Export Awards. With around 10% growth per month, mHITs has played an important role in helping Australia’s multicultural community support families overseas.
Harold describes the company as a 16-year old startup and shares some of his lessons along the way as well as the impact of the COVID-19 pandemic.
Lesson #1: Position your business to take advantage of changes in your environment
Harold says that initially they were concerned that demand for money transfers would decrease as the sending base in Australia is largely diaspora-based. Many migrant workers have suffered reduced hours or lost their jobs due to the economic impact of COVID-19 and have little or no money to send home. However, COVID-19 has actually increased demand for Rocket Remit, mHITs’ mobile remittance service. Many people have been reluctant to visit a retail outlet to send money and some have felt that they couldn’t travel even though they were technically allowed to visit a post office. COVID-19 has seen customers move to digital remittance services like Rocket Remit.
“We are counting our blessings, but we know that while there was an impetus in the form of COVID, we were well positioned to pick it up,” says Harold.
“We were well positioned because we were already very visible online. We’ve done a lot of work to be search engine visible. So, if people search for anything related to us, we come up, and then we have an opportunity to convert that customer. We were growing, but we weren’t growing at this rate. What changed was people were suddenly searching for things like us because they couldn’t use their normal method of transferring money. It was an external factor that caused them to need to search and then we were well positioned to capitalise on it”.
Harold also emphasises the importance of building strong relationships with suppliers and other third parties that help to strengthen your position.
“We have to connect into mobile phone networks and other payment aggregation networks – similar to a swift type system used by banks. There are similar things for the mobile money sector. We’ve built a network where we are literally plugged into nearly everything we can connect to now. This work has been going on for many years, just behind the scenes. We now have relationships with the telcos in our region in the Pacific and we want to totally dominate this area because there is no one else doing what we do”.
Lesson #2: Have a robust business model
Harold stresses the importance of having a strong business model.
“There is a strong market need for what we do. However, there are some businesses that have a very fickle value proposition and while this might work well in some circumstances, if the circumstances change beyond your control this can spell disaster”.
Harold says mHITs has been through 16 definable changes in service offering over the years to achieve a good product market fit.
“You listen to different points of view in the industry and startup ecosystems, a lot of them have a one-shot execution model. There are plenty of people that have told me to stop and give up. And you know, they were probably right at the time, based on what I presented to them. However, we kept going and I kept funding it until we are where we are today”.
“We’ve ended up 16 pivots later where we are solving a real problem and we’re doing good things for the world. We’re in a niche. We’re not a PayPal, but we know what our segment is. It’s about getting narrow and focusing on one thing and being the absolute best at it and then from there growing and scaling”.
Lesson #3: Be ‘coachable’
Harold raises some valuable points about the importance of being coachable as a startup founder. Being coachable means you are open to change, experimenting and trying new things, which is what makes you more resilient.
“We did learn something – we changed our attitude. We kept repeating the same sort of pattern, getting some traction and then dying again. Then we listened to some advice and I changed my viewpoint about a few things. We decided to take onboard some of the ideas and apply them and they worked. Instead of doing the same things we did the previous time and making the same mistakes, we decided to listen and adapt.
“I finally understood that as an entrepreneur if you can’t accept new ideas, you will be really tunnel visioned. I thought, that’s what I’ve been doing. You can have determination and that’s fine, but if it’s pointing in the wrong direction, it’s a waste.
“I’m just annoyed it took so long to learn some of these lessons. I wish I’d paid attention earlier and done a bit more reading or looking around or not being so arrogant about some things.
“For us it was just really understanding that it is about the customer at the end of the day and not the technology”.
Lesson 4: Define the need
Harold stresses that if you lose sight of the problem you’re solving for the customer you will get stuck in a loop of just inventing stuff for the sake of it.
“We all struggle with this mindset. You need to make a conscious shift to focus on the customer and actually really take this onboard and be willing to confront what’s not working, identify where you are making mistakes and make changes.
“It’s not about the technology. That will sort itself out. We’ve never had technology problems and we have always had good people working on it. The issues arise when you lose sight of the problem you’re solving for the customer”.
“If you are solving a problem that people need a solution to, that people will pay for, and you can make money out of, you will succeed if you can execute on it”.
Lesson #5: Be accessible to your customers
The importance of being accessible to the customer and finding better performing customer communication channels is another important lesson. Harold describes the problems that many customers experience when communicating with tech companies.
“Many tech companies keep the customers at arm’s length and prefer to talk to them online. If you want information, they force you through a knowledge process. I don’t think that works. I think the more engaged you are with people, even if it’s on a phone call, the more locked in that customer is. And I think that’s our point of difference. We actually advertise the phone number so people can ring us and we ring them. We also have online chat and we opened every channel even though it was costing us time and money, but we made it work.
“Our competitors, who are bigger, can’t resource that level of engagement and they have to automate. In our case the pie isn’t growing massively, but we are stealing customers from our competitors. We compete on a few value propositions. Speed has always been a big thing because it’s instant and we’ve set the benchmark now so that no one can beat that. Personal contact is the other key factor”.
Where to next?
Harold says that at the moment most transfers are to places like Fiji, Africa, Asia, Indonesia, but the plan is to finish building their network, which is nearly done, and then begin to send from other countries in the region such as New Zealand. From there they may expand to other traditional high sending countries like the UK, Canada and possibly the US.
“We want to dominate our niche and we want to grow it. We know we can grow a lot bigger and replicate what we’re doing in other countries”.
An initiative of the ACT Chief Minister’s Export Awards
The ACT Chief Minister’s Export Awards aims to showcase and celebrate the achievements of Canberra region exporting businesses. These Canberra and region businesses transact significant parts of their business activities (legal, accounting, production, research etc.) through the ACT as they develop international markets. The ACT Chief Minister’s Export Awards aims to build the pathway for new and emerging Canberra region businesses seeking to internationalise their business.
If you are a new or existing exporting businesses in the Canberra region, you can access a range of support as well as network with other exporting businesses, including:
The ACT TradeStart Program helps ACT exporters to achieve long term success in international markets. The TradeStart program allows the ACT Government to work closely with Austrade and access key Austrade resources such as their export database, trade mission activities, their off-shore offices, intelligence and international connections for the trade and investment activities to support ACT exporters.
The International Business Engagement Program is being delivered by Canberra Business Chamber on behalf of the ACT Government. Its main objective is to maintain, rebuild and find new opportunities for Canberra and region businesses to engage internationally. The program focuses on building the Territory’s exporting community; providing training and support by facilitating seminars and workshops; creating links between local industry and other government support programs; assisting the ACT Government in co-ordination of business trade delegations (outbound and inbound).