515 Fintech Visionaries Reimagining The Future of Finance Part 2 Latam then Payments in Kazakhstan

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Welcome to Breaking Banks. This part of the show is sponsored by our friends at Mastercard. It’s part of a series we’re doing with Mastercard on how they help fintechs and it’s a great opportunity to really look at how fintechs can work in the ecosystem in terms of reimagining the future of finance.

The role that Mastercard plays here is helping these fintechs drive smarter decisions, better outcomes as they go through that phase of building, launching, growing their business. And we’re going to get into some of that innovation work, the insights, analytics, loyalty, personalization, consulting, and marketing services that Mastercard uses as part of the tool set. We’re joined by Solana Cortso, Head of Mastercard Advisors Business Development for Latin America.

LAC, what is this? Latin American Caribbean. Okay, Latin American Caribbean. Okay, cool.

And Mariana Franca, she’s the COO at Walla, the startup, which is spelt differently to the French way, right? UAFA. It’s a derivative, yes. Yeah, absolutely.

No, I get it. It’s a localized version. So it’s cool, actually.

So you guys are a fintech that offer the, you’re primarily focused on the unbanked population. You’re looking at innovating and integrating the digital experience with lower cost services. And other alternatives.

Where are you based, Mariana? Our offices, we have offices in Argentina, Mexico, and Colombia. And I travel all over. Yeah.

Yeah. Well, it’s my pleasure to welcome you both to this. We’re going to get into that.

I know you’re obviously a Mastercard user and you’ve worked with them. I want to get into that. But first of all, we love to dive into fintechs around the world.

We like to learn the founder’s story. We like to learn sort of the ideation of how the startup came about. So maybe, why don’t you start with giving us some background on that? When did you come up with the idea for this? What was the driver and how did you start on this journey? Well, I wish I could say it was my idea, but it wasn’t.

I know you’re the CEO. But yeah. When I talk about you, it’s like the royal you, it’s the team.

Very well. I love it. Our founder and CEO, Piero Paolo Barbieri, a Harvard and Cambridge graduate, was the one who came up with the idea.

You know, his vision was to bring Latin American money management into the 21st century. His vision was and is that of financial inclusion and financial education in Latin America. He frequently tells the story, this is how the company, you know, his idea starts.

He tells the story of seeing his grandmother in line at a bank in Argentina in either the hot or cold weather, you know, whatever season it was, feeling to cash out her pension. And, you know, it wasn’t really good that someone her age or any age, for that matter, you know, had to be in line to access, you know, their hard earned money. So that’s kind of when it started.

He thought that there had to be a better way to be able to deal with financial products that it didn’t mean that, you know, somebody had to go to a branch or jump through hoops or to get a financial institution or bank to take care of your money as if they were doing you a favor, even having to pay to use your money. And so this is how it started, because he understood that the current traditional banking and financial system that we have in Latin America definitely does not incentivize people saving money or investing or lending. So that’s how the idea of creating an ecosystem began.

You know, a financial ecosystem that would allow to financially include those that were unbanked and underbanked in Latin America, which is a big population. There’s around 650 million people from Mexico South and around 50 to 70 million of those 650 million people are 50 to 70 percent, excuse me, are unbanked or underbanked. In fact, 80 percent of the transactions in Mexico are still done in cash.

So something had to be done with this, right? You know, having said that, I mean, particularly in Brazil, we’ve seen PIXPAY really take off there. And we just saw the results of Nubank just had their results. I don’t know if you guys saw that.

And they’ve had I mean, you guys are doing really well. You know, in your Series D, you raised 544 million. So, you know, I mean, I don’t want to take away from that.

But Latin America is having some really interesting digital sort of money success right now. I think that that’s the message, right? That is a message. The message is, you know, from when we started, which was 2017, that was when our first prepaid international MasterCard came out in October 2017.

That’s where the whole idea of helping the unbanked and underbanked started. Right? With this first service. How did it start? Well, you know, by allowing people, for example, that didn’t have access to a bank account to load a prepaid card with MasterCard and now have Netflix.

If you think about it, people were not able, had to use somebody else’s Netflix account user and password because they weren’t able to pay for that. So once you allow them to have a Netflix, you know, a prepaid card, they could have their own Netflix account. And that’s the way that they started being financially included.

Five and a half years later, we’ve done a lot of things, right? So we currently have 5.5 million customers. We’ve acquired around 1 million customers a year. We’re in three different countries in Argentina, Mexico, and Colombia, with regulated licensees in each one of these countries, either a bank or a financial entity license, right? We’ve raised, as you said, you know, a little bit over $550 million.

The last series was Series D, $350 million in August of 2021. And our investors, we have investors as Tencent, SoftBank, Rebekah, Goldman Sachs, among others, right? And giving us a valuation of $2.5 billion, right? But more importantly – Well, it’s not bad. You know, like in, I mean, this is six years.

So you guys are on a pearl. You know, you’re going really well. Yeah, on a roll.

Hey, I do want to ask you, you know, part of the financial inclusion issue is digital inclusion. You know, it’s accessibility to digital. Like you were talking about the digital service layer, whether it’s Netflix or whether it’s access to, you know, basic wallet service or basic services.

You know, this is increasingly – these two things are being tied together. So, you know, for Voila, you know, do you guys have to look at that issue and work in tandem with digital inclusion technologies or is it just happening organically? Well, Latin America has a high penetration of smartphones and internet, which makes our business a little bit easier. Of course, if, you know, they didn’t have smartphones and internet, it would be a little bit more difficult for us to do this because that’s basically the premise of how we actually go into these countries and make it much easier, right? So somebody doesn’t have to go to a physical branch to open an account.

You do it even if you’re a hundred miles away from the, you know, a city. So the fact that there is technology, basic technology in these countries, in addition to a large population of underbanked, is the perfect combination for our product and for our ecosystem to work in Latin America. Yeah, no, I’m just looking at that.

There’s 2018, it was 80% penetration of smartphones in Argentina, which I wouldn’t have expected that, but that’s, I mean, that also speaks to the fact that smartphones are becoming a lot more affordable and data access as well. So I want to ask you a question. You know, these guys started off with a prepaid card and, you know, that was actually something that struck me because when Moven started, and this was back in 2011 when we started, and we also started on the prepaid rails with MasterCard.

Yeah. Is that sort of like, you know, is that the fairly typical way you start with fintech neobanks? You start with a prepaid instead of a, like a full DDA debit card? I’ll tell you this. We are maniacally focused on empowering fintechs like Wallah to build the right products and launch the right strategies to get at the target segment that they want to get into.

Now, if, as we want to penetrate and collectively with Wallah, the underserved or unbanked population, in that case, perhaps, and given regulation of the market, the right starter product is prepaid. In some cases, prepaid doesn’t even exist from a regulation standpoint. And so you start with light debit accounts.

That’s the case in Mexico as an example. But at the end of the day, it’s less about the product and it’s more about the solution because what we’ve learned is we need to meet our customers where they are and how they want to engage with us. And I think a little bit of what we were talking about in terms of like, well, now it’s digital inclusion, throughout the pandemic, right? What we’ve seen is customers and consumers want to engage in those use cases that come digitally, right? And so that’s where the partnership comes with Wallah where it’s a digital wallet and prepaid card associated with a prepaid card or a debit card doesn’t really matter.

Yeah, I don’t think customers care. Customers don’t care if it’s a thin DDA or a full DDA, right? Because they’re just these basic wallet services and so forth that have been offered as Mariana was describing. It’s really very functional day-to-day stuff.

They don’t need sophisticated banking products. It’s mostly a value store and payments capability. This is exactly right.

And honestly, Brit, this is about access, right? And we talk about how committed we are in terms of giving access, but access for a purpose, for the right use cases that ultimately will drive financial prosperity. Because where we started 15 years ago when we were like, okay, we’re going to give access to people via a prepaid card or a debit card, it didn’t really matter. But the use case behind that didn’t lend itself because people needed to then, the cash that they were receiving, go and put it into a prepaid card so that they could load the card so that they could go and buy milk.

And the guy that’s selling milk actually wanted cash. It’s now with, they want Netflix, they want to load up for buying currency online through gaming. They want to send money digitally and the infrastructure exists when the product of Walla will actually get the right use case, right? That’s the magic.

Well, I think it’s interesting when you think about the ecosystem in which Walla came up in. So in terms of early neobanks in the US, maybe 10 years after that, but to your earlier point, you’re coming up in an era where broadband and mobile is widely accessible and widely adopted. And so we’re seeing acceleration now much faster, even though maybe the starting point had been a little bit delayed.

So I’m curious, Mariana, from your perspective, I’d like the flip side of the story. As you were looking at the environment and the tools that you could use, what made you look to MasterCard and what in particular were a couple of the building blocks that helped you get started so quickly? Well, definitely their technology was the main component of our decision to go to MasterCard. And everything and every feature within their processing and the services and the consulting and innovation that they gave us were important to make a decision of this is the card that we want to go to, right? And how do we want to penetrate and specifically how do we want to go into a specific segment of the population that is needed in Latin America? We saw that the way, you know, what they provided, again, from a technology perspective, from a reliability perspective, from a cost perspective, and from the way that we could expand in the future, we ended up, you know, becoming a principal member of MasterCard was the way that we wanted to go because of the way that we, Walla, wanted to grow into Latin America.

And MasterCard was the one that was giving us the platform in all its shapes and form in order to be able to us expand in the different countries in Latin America. And they have presence, of course, big presence in all of these countries and proven presence where we can be successful. Well, and speaking of expansion, can you walk through a little bit why Colombia and Mexico and what was your thinking around that as an expansion path and where do you think it goes from here? First was definitely, as we said at the beginning, it was financial inclusion, right? We saw a Mexico and Colombia have big populations.

Mexico has around 200 million people. Colombia has around 40 million people. These are countries that have a large population, a large population per se, plus a large population of a bank and, in addition, have a big penetration of smartphones and internet.

And the financial system is concentrated in a very few local players that are not incentivized to create financial inclusion. They make it very difficult for people to be financial included. They make it very expensive to be financially included.

But if you go to, you know, maybe countries like Chile, they have a large population of banks. So, you know, our service would be good, but it’s already, you know, financial inclusion is big there. When we decide to go into these countries, we’re looking at that population, smartphone penetration, internet penetration and how our services can allow for financial inclusion and not only for prepaid card.

Because we, as Sol was saying, we then migrate to a debit card and that’s where we migrated to a bank with all the services that we can use. We’ve recently launched our credit card in Mexico with MasterCard as well in our newly acquired bank in Mexico. So we’re increasing the products that we’re doing and the services that we’re doing with MasterCard as an underlying platform.

Why? Because it’s not only about a prepaid card. It’s about creating a credit history for the clients that they start by a prepaid card, but then they have a bank account. And when they have a bank account, they can have credit.

And if they’re a business owner, we can now look at their credit history to give them, you know, and allow them to invest, right, and give them investment products. That’s the ecosystem that we have. I did notice that you guys, you know, one of the objectives that you have is helping people build a credit rating, right? Mm-hmm.

Because, you know, particularly for those that have been financially excluded, you know, one of the, building that’s quite complex. So if you’ve got someone that’s sort of doing that for you by default, making it easy. So you mentioned the prepaid card.

You mentioned the credit card. What other products do you guys have as a NIO Bank platform? In our ecosystem, we have the prepaid card. We have the credit card.

We have the debit card as well in our bank in Colombia or financial entity in Colombia and our financial and our bank in Mexico. We are, we already have a bank in Argentina which is called Guido Bank which we’re integrating. So we’re migrating as well to MasterCard.

You know, they used to have Visa but we’re going to MasterCard as well. We have credit products as part of the ecosystem. We have wealth products.

So people can actually invest in money market funds. We have an e-commerce platform for our business owners. So we’re providing payment links as well as, you know, point of sale terminals so they can charge their services and then that money goes into the bank and with that money they can invest.

We have insurance. Yeah, I saw you have insurance for pets and cell phone insurance and stuff. That’s pretty cool.

Which, you know, I think it’s a no-brainer, you know, for, I mean, like to be a one-stop shop, you know, for the financial inclusion level. This is probably the first insurance products these guys have utilized as well. Do you use the QR code for merchant payments as well? Yes, Argentina is really well known for the use of QR code.

Actually, it has, you know, Argentina has a regulation of being QR codes have to be interoperable within all the wallets. So we provide a QR code but that can be used by another wallet as well as other wallets. QR code, you know, they can, the money can come directly into us.

So we provide that too and that has allowed us to, you know, go three digits in growth when it comes to payments for our Wallabees brand which is for business owners. So is that, is that an RTP, right? Real-time payment system or is it is it a QR layer on top of the existing bank-to-bank network? No, it’s a real-time system, right? So once you actually, for business owners, what we do is the moment that they have that they they charge their service, they immediately get that money in their bank account or in their prepaid card. JP, did you have a follow-up? Sorry.

Well, two things as you talk about the banks. One, your bank in Argentina, that’s a bank you acquired, right? That is correct. We acquired two banks in the past, you know, two and a half years.

We acquired first the bank in Argentina which is a long process, a regulatory process, right? You first make an offer to buy a bank and then you go through a regulatory process that you have to be approved and we got that approved in June of 2022. And then we did another offer to purchase a bank in Mexico, ABC Capital. We actually got that approved May of 2023.

Interesting. And then as we just talk about this ecosystem, one other thing about Argentina and really a lot of Latin America, you also have a lot of foreign-owned banks, right? Banks that are coming in from other countries and operating divisions there. I’m curious.

I thought you were going to say they have a lot of football. Well, that too. Brett, it’s everything I can do to stop asking a question about football because I want to come to Argentina and go to a match.

No. Or Miami. Yeah.

Or Miami, right, where we can see a pretty good Argentine play. no, I’m just curious about the landscape around competing banks. How did that come into play when you started the company and how’s that evolving now that you bought your own bank and you’re really adding so many more services, right? You’re not just disrupting from a single point of entry any longer.

The banking industry in Latin America and the countries that we’re in and the rest of Latin America as well is very concentrated. In Mexico, you probably have 40 different licenses, 40 licenses only banking licenses right, given by the regulator. In Argentina, I think you have 70, but only probably 25 to 30 that are actually active.

The same thing happens in Colombia. So they’re very, very, very concentrated. So of course, when, you know, the banking industry is concentrated in three or four players, disrupting that is very, very hard.

And there’s, again, there’s no incentive to do anything different when it’s very concentrated. What we thought is we had to lower the cost. This is why we went into bank.

We started by a prepaid and we started by what we call a payment service provider, which was not, you know, regulated as a banking or a financial entity. But we decided to graduate into banking because we know that, and we do, we lower the cost of providing these services by anywhere between 75 and 80% because of the technology that we create as well as the technology, for example, that MasterCard gives us, right? All of that together, that technology allows us to give those savings to the clients. I would, you know, dare to come up with a traditional bank that currently has, that was able to acquire 5.5 million customers in five years of free services and that they have customers all over the different countries that we have.

Yeah. Not specific cities and that they can open an account in, you know, digitally, even if you’re from like the beach or the farm or whatever it is on a Sunday. Yeah.

And not only that. Sol, do you want to jump in? No, I was going to say, I think agility is just so important in this case, right? One of the things that we’ve learned over the years is, you know, fintechs move fast, users move even faster, right? We need to meet the customers and the consumers where they want to be and we need to make sure that the UX is meeting them where they are and how they want to interact with us, right? From a banking perspective and as we take them, as Mariana was clearly saying, from accessing to financial prosperity, right? That needs to happen. It needs to happen fast.

It needs to happen in the, in the pace in which users are looking for that and that’s why we look to empower partners like the Wallace of the world that are going to help us do that, disrupt and revolutionize sort of the way that we see the world when we interact on whatever we want to do, right? Whether it’s split a bill, pay the nanny, send money to the loved ones, et cetera. This is when we can’t imagine a world without the digital way of doing what we used to do in cash. That’s when we know we’ve been successful, right? We’ve taken out the friction out of the system and we just can’t go back there.

I think, um, I, I think we’re seeing this as a pattern emerge, you know? Mariana, I, I use, you know, I use that exact same line about, but I talk about WeBank in China, they’ve got 350 million customers now and I’m, and, and that’s eight years and I’m like, how could you ever build that with a branch network? Like, it’s, it’s just like, that’s the, the extreme example. I mean, you guys have obviously done extraordinarily well as well and it’s reflected in your valuation and the growth and I’m sure that you’re about to ramp it up and, and see more growth. So let me ask you, tell me what it’s like for Wallar in five years? Oh, in five years if we have, you know, it’s going to be north of 25, 30 million, you know, customers.

We’re going to have most probably new countries. We’re going to have new products. You know, one of, can I specify exactly what? No.

And this is why our, our motto is not, is to not ruin the surprise, you know, and that’s yet to come, right? But one thing that I can tell you is that we’re actually investing, you know, $150 million in the next 18 to 24 months to expand our business in, in a whole bunch of products. One that we’ve already done and we started exactly with MasterCard is on the side of, for example, in, with Remittances in Mexico, which is a $52 billion industry, right? So we’re creating things that will expand the business that we have, that will allow, as Sol was saying, you know, for people outside of Mexico to bring money into Mexico and to loved ones with, you know, the ease of just charging a MasterCard in the US and transferring directly to a MasterCard in Mexico. All right.

Well, one thing I just want to sort of close with is a question and I’ll get both of you to comment on this. you know, one of the things we’re noticing, this is why I said five years, quite specifically, but, um, one of the things we’re noticing as a global trend is that more and more reliance is coming onto the app or the wallet versus the plastic and I know you guys have, you know, integrated, obviously you’ve got Netflix payments and other stuff integrated into the, um, into the platform so I know you get that. Um, but, um, you know, with, with technologies like Vision Pro and augmented reality and so forth in five, ten years, it seems like, and with central bank digital currencies and with things like this, it seems we’re going to be using more of these sort of digital value stores, um, you know, more than, you know, sort of traditional bank accounts in the way we think about it.

So have you guys thought about that at all? What’s the nature of like a smart bank account that lives with you that’s responsive that uses AI and stuff? You know, we, we like to think about it, you know, again, it might sound cliche but as an ecosystem, we don’t think ourselves as a bank. We think as ecosystem that uses different type of regulated licenses to provide the financial services that a person needs at a different type in their life. Yeah, yeah.

Um, and we use different technology today, you know, digital currency in Latin America with the central banks however they are in Latin America might take, might take longer than five years to be honest, right? I think we have other problems to solve before we get there, right? But yes, maybe the basic thing of actually not using cash, which is right. I mean, I think, I think not using cash but also just helping people understand when they’ve made a good purchase decision or a bad one, you know, in terms of their overall financial health that sort of is a lot easier to do today with UX and so forth, right? Well, let me tell you what we do, right? we actually, one of our, we have 30% of the population between 18 and 23 years old is a customer of Voila in Argentina, right? So, that is a, that’s a big market share. So, and this is part of the financial inclusion and education, you know, financial education that you’re saying, how do I know if I’m investing correctly or not? So, we have a big platform that teaches younger people how to invest, why to invest, what is a good purchase, you know, what are cashbacks, how to do a budget, and we do it very early on, not only from 18 to 23, but we’re able, we actually open accounts with, you know, parent supervision and parent approval from kids that are 13 and up.

In looking at the technology for this and looking at financial education and its alignment with long-term financial health, the, the trick is, is modifying behavior, it’s not budgeting. Only about 17% of the population have, you know, at least in the United States, even with the education system that the U.S. has, have the ability to effectively use a budget because a budget is not so much about budgeting per se as it is about discipline. So, if you can fix the behavioral issues, it’s actually far more effective.

But anyway, I don’t want to jump, I don’t want to go down that rabbit hole. Two comments, two comments to answer the first question and then a comment on that as well. So to answer the first question, I think to us, it is much less about the card, the plastic, the device.

It’s more about the value of the virtual soul of the account, so to speak, because the device through which we access that account is going to morph, it’s going to change, it’s going to evolve, right? It could be in the form of a phone, it could be in the form of a watch, it could be in the form of a car, anything will be able to be a payment device and God knows and if I knew, I’d probably be a millionaire right now in terms of what that device is going to be. It could be your hand, right? Glasses, whatever. The device is less relevant.

Well, yeah, we’re seeing, obviously, gesture control and stuff like this. Exactly. We are the operating system now, the humans, right? Yeah, that’s the catchphrase for the AI guys.

And going to the behaviour and the future of tomorrow, I think it’s about driving the fun way in which we establish that discipline, right? Like, one of the things that we were doing in terms of financial education for one very, very big programme that we have in the US is a little bit of a healthy competition around like, if you do the right behaviour, we’re going to then give you some promos or money back or gift back, et cetera. And that’s worked really well in terms of driving the right behaviour, which is not budgeting, but it’s that discipline that helps you save for a better tomorrow, right? Yeah, absolutely. And this is the journey of financial access through financial prosperity, which, you know, Mariana was talking about.

That’s a great way to finish off. That’s a good message, right? And to be fair, you know, and Mariana, you started the conversation talking about smartphone access and so forth. You know, since 2011, we’ve brought 1.4 billion people into the financial system through mobile technology, right? You know, financial inclusion accomplished with mobile phones globally.

That’s a stat that came to us from the Bill and Melinda Gates Foundation from Costa Perica when we had him on the show a couple of months ago. This, you know, we are making progress. Now it’s the last mile and it’s just sort of dealing with, you know, fringe access for digital and also literacy issues and things like that.

But we are tackling tackling those things. So thank you both very much for joining Breaking Banks today. Mariana, how can people find out more about Wallah? Well, they can definitely go to wallah.com.ar. That is one of the ways to go and you’ll see what our product is.

And what about social media? I know you guys are on Twitter, but are you active on TikTok? We’re on TikTok, we’re on Twitter, we’re on Facebook, we’re on LinkedIn. You can find us. That’s always a good test for me of fintechs, how plugged they are into their customer base.

If you’re not on TikTok, then yeah. And Sol, what about the Mastercard partnerships that you’re doing with fintechs? Where can we find out more about that? Same, you can find us on LinkedIn, you can find us on social media across channels and of course mastercard.com. You can always find me as well. Right, and I know you have a services URL as well, mastercardservices.com. Mastercardservices.com. Okay, so if you’re a fintech and looking at some of the capabilities that you learned about on the show today, go to go to check out mastercardservices.com dub dub dub.

Be cool, obviously. Well, thank you both for joining us on Breaking Banks. That’s it for the show today.

Thanks for joining us as listeners. We’ll be we’ll be back with more later. This show is brought to you by Alloy Labs.

As much as we love talking on the show, we believe that action is more valuable than talk. Alloy Labs is the industry leader in helping fearless bankers drive exponential growth through collaboration, exclusive partnerships and powerful network effects that give them an unfair advantage. Learn more at Alloy Labs .com. Alloy Labs banking unbound.

All right. So we are here in Almaty, Kazakhstan, and I had the opportunity to catch up with one of the local fintechs. In fact, it’s a mobile wallet play called WuPay.

And we have the chief compliance officer with us, Yulia. Yulia, welcome to Breaking Banks podcast. Thank you for this opportunity.

Tell me about WuPay for people who aren’t familiar with it. Okay. WuPay, it’s a payment organization based in Karaganda, Kazakhstan.

And it’s actually the only one organization payment organization from Karaganda. And I believe the only one in Kazakhstan with a central office, not in Almaty or Astana. So it’s kind of unique company.

And we have several products that we offer into the market. And one of them is digital wallet. As you told today, it’s the future of payments.

Yes. So it was really great to hear that. Also, we were the first company in Kazakhstan who did the mobile financial services.

Okay. Yes. Yes.

So how long have you been operating? 10 years. Oh, wow. Almost.

Okay. And so that’s quite a while. I mean, that’s about the, you know, I mean, moving the startup I started was 2011.

It’s 12 years now, but 2013 was sort of where it was all. 2013 was where it was all happening. It was 2012.

2012. Yes. Okay.

But we are counting our birthday not from the date of registering the company, but from the date of the first transaction. That’s why it’s only 11. And so what technology is the wallet based on? Are you using QR, using tokens? How does the wallet itself work? Well, it’s just a software.

I mean, there is no token, nothing like that. Right. Okay.

And can you tell me about how people use WuPay in Kazakhstan? Yes. They mostly use it to pay for products and services and to make transactions between physical entities. And we created several projects to allow people to pay for example for transport, for like for buses, for parking slots, and so on.

Oh, that’s good. So, do you do person-to-person payments as well? Yes. P2P? Yes.

Okay. And so does it work with the card system or is it separate to card rails? It can work with the card systems as well and mobile balance, so we use different mechanisms. You’re agnostic to the payment type? And so do you operate your own value store or does it link to bank accounts? It is.

But can you recharge your wallet and have some money stored on it? Yes. It’s possible, but the main point is that digital money in Kazakhstan, all of them are accumulated on the bank account of the bank who did the mission. And we are just counting the amounts that different users have.

So do you have to do KYC separately or do you link to the bank KYC to identify a customer? We have to do KYC separately and we have some limitations. We can proceed with the transactions with unidentified people, but we have limits. It’s like a prepaid card and it’s not that big in the United States because it’s about $3,000 and here it’s less than $500.

One of the things we’re noticing around the world is that particularly in places like China, Kenya, and so forth, these wallet ecosystems have set a benchmark in many ways and now the banks are trying to follow. Same with Challenger banks. So are there any innovations that WuPay has come into the market that you’ve seen banks trying to copy what you are doing or do you find yourself more as a partner of banks in the ecosystem? Well, I can’t say so.

I mean, we’re not someone who try to fight with banks. We definitely have to work with them because in Kazakhstan, payment organizations really depend on banks so you cannot exist yourself. So it’s not And what is the regulatory infrastructure for mobile wallets? Is there a FinTech license that is here or do you have to register as a standard payments company? How does it work in Kazakhstan? It’s quite interesting because we We just have the regular permission from National Bank to operate as a payment organization working with the digital money, that’s all.

And so we created this model based on that. Now as a compliance officer, what I’ve noticed with many fintech startups around the world is they tend to want to experiment and try new things and they’re always going to the regulator asking, can we try this, can we try that? Whereas a lot of banks and traditional payment companies will sort of say, well, we can’t do that because the regulator doesn’t say we can do that yet. So as a compliance officer, how would you say your relationship with the regulator is different from a traditional bank? Well, we have quite strict regulations in several spheres, but our national bank, they try to listen to the market.

So sometimes it’s possible to help them to give new options for the market. And also we have the regulatory sandboxes. We have one in national bank and also we have one in Astana International Financial Center.

So here is the possibility to make some experiments. Well, and about regulations in general. So our national bank is ready to reply and to help.

So when we have new models, new ideas, we write letters, we arrange meetings and we discuss this. And then we try. OK, that’s good.

So it’s more collaborative. And it’s my experience. Right.

I’m sorry, it’s my experience because we have 116 payment organizations operating right now and I don’t think that all of them are using the same ways. Yeah, no, I agree. That’s why I asked the question.

In terms of technology, not only around the compliance side, but on the fraud side, on the KYC identity side, obviously, as a fintech, you’ve been able to deploy all of the latest technologies and so forth. And this gives you some advantage. In respect to the industry as a whole and comparing your business with other operators in Kazakhstan, where do you think you have a technical advantage in terms of things like fraud management or compliance? Well, if we’re talking about the fintech companies, about payment organizations in Kazakhstan, I believe we’re one of the best.

And in terms of AML and KYC and anti-fraud systems, it is possible that we are the best. Yes. At least I believe in it.

And mostly we did all the software ourselves. And we implemented best practices. And so I think that our advantage is the really great team in the first place, because we invested a lot of money in education of our team and technical staff and AML officers.

So people who created our system, they were really enthusiastic. They really wanted to do this. Right, right, right.

You know? So, idealists. It creates a culture of, yeah, idealism, but wanting to push the boundaries, wanting to try new things. I see.

Yes. How long have you been with WUPEI? From the very beginning. From the beginning? Yes.

You were one of the founding team. I wasn’t, but I was employed two weeks later. Two weeks later.

Well, that’s… I would call that founding team member myself. And, yeah, I was a lawyer at the beginning, so two months ago I was chief legal officer. And so… Ah, now you’re the chief… Well, it makes sense.

But also responsible for compliance. Well, yeah. I mean, yeah, there’s a lot of crossover, right? Yeah.

There’s a lot of legal elements to that, so that’s interesting. In terms of the fintech ecosystem in Kazakhstan, can you share with us any information about what it’s like to be a fintech in Kazakhstan, to attract talent? What is the fintech space like here? Right now it’s a bit complicated question, because, you know, last several months, I think, and in future, we are facing with the problems or with the barriers right now, but we are trying to fight, and we are doing it in a group. Right.

So, all together. So, a lot of the fintechs working together… Yes. …to try and move the needle.

So, do you have a fintech association here? Yes. And, actually, Wu Pei was one of the founders. Right.

So… Right. So, what… Tell me where the name Wu Pei comes from. I don’t really know who was the author, but I believe that it was Alexander Doroshenko.

Okay. He’s the founder? Yes. He’s one of the founders.

Right. And the meaning was, you know, this whoop condition. Whoop? Whoop? Yes.

Yes. Something like very easy and, like, cheerful, and so it’s whoop condition. Right.

Whoop condition. I like it. Yeah.

Okay. So, we wanted to live in the whoop condition. Right.

And I think, you know, it’s startup thing at the very beginning when everyone is really… I don’t even know. Very emotional and… A lot of energy. Yes.

A lot of energy. A lot of commitment. So… Yeah.

It’s hard work working for a startup, right? I mean, you know, you guys are a growth company now. You’re 10 years old, but in those early days, it’s exciting, but it’s also tough, right? Yes. Yeah.

And so, now, you know, what are you hoping for Wu Pei to achieve or accomplish in the market? If you look at 5 years or 10 years, what is your hope as a company? I… I better say about my own hopes. Sure. Sure.

I do want Wu Pei to develop to a very big international company because we have our ideas. We have expertise. So, we are really able to do this.

Right now, we are operating in three countries. What are those three countries? Uzbekistan and Tajikistan. Okay.

And Kazakhstan. Kazakhstan, yes. It’s our main center, but we’re also representing Uzbekistan and Tajikistan.

Okay. So, I believe that we can do something bigger. And Asia, of course, but then maybe Europe.

And what about an exit? Is there an exit on the horizon or do you just… you want to go list on the IPO at some stage? Well, I’m not the one who shall reply to these questions. All right. No, that’s fine.

Okay. Well, thank you for joining us and telling us a bit about Wu Pei. How can people find out more about your business and what you’re doing? It’s wupei.com. It’s our website.

We have also a mobile app. And so, well, you can call, you can write. Sure.

Check it out. wupei.com. That’s W-O-O-P-P-A-Y. Yeah.

W-U-P-E-I-T. Double O, double P. It’s important. Double O, double P. All right.

Thank you, Yulia, for spending some time with us here in Kazakhstan, telling us about Wu Pei. Thank you so much. You’re welcome.

That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our U.S.-based production team, including producer Lisbeth Severins, audio engineer Kevin Hirsham, with social media support from Carlo Navarra and Sylvie Johnson. If you like this episode, don’t forget to tweet it out or post it on your favorite social media.

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