Applicant name: Paysend Libre
Applicant type: Private Company
Website: paysend.com
Headquarter City: Miami
Headquarter Country: United States
Innovation Name: Paysend Libre
Innovation Type: Product
Category: Innovation Remittance Solution
Status of Innovation: Pilot
Innovation Active Since: 04/01/2023
Demonstrate what technology your product has that is different from the market: Traditionally, remittances are slow and expensive – it takes days to receive the remittance and requires recipients to make long lines at a bank or exchange agent to receive funds sent by their relatives. Recipients need to provide extensive information about themselves and their financial details, and pay a high percentage in fees. With Paysend Libre, unbanked recipients in Guatemala and soon other countries in LATAM can receive money instantly, onto a Paysend Mastercard digital card, which is ready to use immediately and only requires the recipient’s phone number. This completely revolutionizes traditional remittance technology, which is slow, expensive, giving remittance recipients a true alternative to receive money in a way that is safe, fast and convenient.
Explain the functionality. Paysend Libre is a new way to send money across borders, instantly, safely, and reliably. With Paysend Libre, recipients can receive their payment instantly onto their mobile phone, to a virtual digital card. This means even if they are underbanked or not in the financial system, they are still able to receive the remittance. Furthermore, to increase consumer adoption, the sender does not need to know the recipient’s personal information besides a phone number and the recipient does not need their own financial account to receive the payment. No lengthy checks are required before the payment is received and there is a reduction in payment failures, particularly relevant in countries where the financial infrastructure is nascent.
Explain who followed your example and deployed the same technology and timeframes. Paysend Libre is completely distinct from what has been done historically within financial institutions – its product features and benefits that it provides are truly unique. Though other financial institutions offer remittance solutions, only Paysend offers a fast, inexpensive, and low-barrier remittance solution that is inclusive of unbanked users. Paysend is not alone in considering digital payments in Latin America (one example being PIX in Brazil) but it is unique in the international remittance space. Fundamentally, Libre has transformed industry players’ capacity to innovate in a faster, more agile way. Libre has challenged the financial institution industry to think outside the box, and they are now working towards making payments and financial services more accessible from both an economic and inclusion perspective. Financial institutions are directly thinking about what the user actually needs, and how they can work with partners and fintechs collaboratively to achieve these mutual goals.
Do you know if this innovation is specific to only one market and which one? Paysend Libre is applicable for all markets, however, it is especially pertinent for markets where there is a high population of people dependent on remittances and a high population of people that are unbanked or underbanked. This is because the product features will provide the most positive financial impact to the senders and their receivers (their families in the local economy) – which will also result in broader economic impacts to the local economy. While the intention is to first launch the Libre MVP in Guatemala, Paysend is leveraging this as an opportunity to test and learn in a single region first. Paysend can better understand the target market so that there can be changes to the strategy or product if required, before launching Libre in other geographical consumer markets like Asia and Africa.
Innovation Description. Paysend Libre works by connecting Paysend technology with a Mastercard virtual card that can then be sent to a recipient via mobile phone number. This card is part of the existing Paysend mobile app and comes loaded with the funds and exists digitally on the recipient’s phone. Then the recipient can immediately use the funds by using the card at local POS terminals. With the Libre MVP, Paysend has also connected with the ATM network in Guatemala so that recipients can take out cash using the virtual cards, in addition to making purchases digitally at POS systems.
Do you know if this innovation is specific to only one market and which one? Paysend Libre is applicable for all markets, however, it is especially pertinent for markets where there is a high population of people dependent on remittances and a high population of people that are unbanked or underbanked. This is because the product features will provide the most positive financial impact to the senders and their receivers (their families in the local economy) – which will also result in broader economic impacts to the local economy. While the intention is to first launch the Libre MVP in Guatemala, Paysend is leveraging this as an opportunity to test and learn in a single region first. Paysend can better understand the target market so that there can be changes to the strategy or product if required, before launching Libre in other geographical consumer markets like Asia and Africa.
What was the inspiration for this innovation? International remittances to many Latin American countries serve as a safety net for millions of people in these countries. Latino immigrants are a lifeline for their loved ones back home, who are frequently unbanked or underbanked and rely on the cash economy. This means that they pay higher fees for transactions (a recent Visa report indicated that the average cash-funded remittance costs 6.52% vs. digital at 4.8% vs. Paysend at 2%), and have almost impossible access to other financial products such as credit. Libre represents Paysend’s mission to free unbanked individuals from the challenges that come with traditional solutions, the lack of financial options for international money transfers, and the security risk of receiving money in cash. It is intrinsic to Paysend’s mission to allow consumers to pay and send instantly, anywhere, anyhow and in any currency.
Who can benefit from your innovation most? Paysend Libre benefits the senders and recipients the most, as the technology decreases the costs and barriers involved in sending and receiving money, and improves the speed at which recipients will be able to receive and use the money. Remittances are a significant source of income for families in South and Central America (remittances make up over 25% of GDP in Honduras, Jamaica, El Salvador) and enable economic development in these regions. Libre was also designed to ensure consumer adoption from recipients and senders – no personal information is required outside of a mobile phone number. It is extremely easy and instant to directly receive a virtual digital Libre card and Libre will allow users the ability to withdraw from ATMs in Guatemala. This feature will remove barriers for users to readily access and use the cards.
What are you most proud of about your innovation? Paysend has been working on this innovation for the past year, and what’s truly unique about it is that it is targeted towards unbanked and underbanked people, which are often neglected by the traditional financial system. A key challenge that Paysend faces is educating the recipients – thus, we have secured local partners and built a presence in Latin America. Paysend has also built collaborative relationships with Visa and Mastercard to launch marketing campaigns in Guatemala and Honduras to better understand the target market of remittance recipients. As well as collaborating closely with the BBC to film a short documentary which will highlight the innovation of Libre in Guatemala and be released in April as part of the BBC and Innovate Finance financial inclusion series.
Why do you think you should win this category? Paysend Libre is an opportunity to bring inclusive economic opportunity to unbanked customers, by bringing them into the financial system through access to a virtual digital card and a simple, convenient, and safe way to facilitate money transfers to those who need it the most. This will make a fundamental impact on many people’s daily lives, their families, as well as the broader economic landscape of Latin America. Paysend has a goal of bringing 5 million people and 1 million small businesses into the digital economy in Guatemala, Honduras, and El Salvador, and then leverage the learnings to other regions globally including Africa and Asia. Besides Paysend’s six years of experience and leadership within the digital remittance space, Libre is enabled by a strong partnership ecosystem including BBC and Mastercard. Investment from these partners and close collaboration supports Paysend in its goals and ambitions for Libre.

TEAM MEMBERS

Full Name: Jairo Riveros
Role: Managing Director
Full Name: Beatriz Bravo
Role: Operations Manager, Americas
Full Name: Lenis Guzman
Role: Senior Marketing Manager, Americas
Full Name: Morgan Liu
Role: Founder Associate

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