Remittance King: Why Coins is Targeting the Philippines
Banking the unbanked using blockchain
PHOTO CREDIT: Grois Enayo
In the disruption-obsessed world of start-ups, Coins co-founder Ron Hose takes a radically different stance: “We’re not [here] as a disruptor but as a connector.”
Founded in 2014 by Hose and Runar Petursson, Silicon Valley entrepreneurs who had met in Manila in 2013, Coins is a fintech start-up based in the Philippines that lets users transfer money through their mobile phones quickly, cheaply, and safely. These transactions—remittances, bills payments, peer-to-peer exchanges, or online shopping, among other applications—are processed over blockchain, the backbone of bitcoin.
The company works with banks, financial institutions, and last-mile retail outlets and has a network of over 22,000 cash disbursement and collection locations across the sprawling archipelago. It is nibbling at the lunch of traditional middlemen—remittance services like Western Union—to which overseas workers typically pay 6-8% to remit money back home.
“Our users sometimes might be an overseas family worker who works for a month or two then sends funds to pay for someone’s tuition, or for rent or electricity. And it’s important that it’s delivered safely, securely, and on time because, a lot of times, people don’t have a lot of spare cash. If something is delayed even by a couple of hours, it can be very painful,” Hose says.
The bitcoin start-up operates in the Philippines and Thailand, and has started doing remittances in Indonesia.
“[Coins] represents the future of money,” says Minette Navarette, president of Kickstart Ventures, the investment arm of Philippine telco Globe Telecom and a Coins investor. According to a KPMG report, as of 2016, 73% of Southeast Asia’s population of some 600 million don’t have bank accounts. And that’s the opportunity.
In the Philippines, “way more Filipinos have Facebook accounts than bank accounts, and it’s still moving in favor of Facebook... Banking penetration [is still] under 30%, and credit card penetration is at under 5%,” says Hose.
Many are betting that the solution lies in the region’s high mobile penetration rate, including Paul Veradittakit, Partner at Pantera Capital, another investor in Coins, who thinks the region is “primed for fintech disruption because of mobile penetration, a good base of developer talent, and the lack of digital banking services.”
Hose studied engineering and computer science at Cornell, launched his own company soon after graduation in 2007, and was a founding partner at Innovation Endeavors, the investment vehicle of Google’s Eric Schmidt.
Traveling in Southeast Asia, he noticed that, even in remote rural areas, people would be on Facebook through their mobile phones. “That kind of made me realize that we’re at an inflection point,” he says.
Coins is backed by some of the biggest names in the VC world: Quona Capital, Pantera, Digital Currency Group, Wavemaker Partners, Innovation Endeavors, Amasia, Global Brain, Rebright Partners, BeeNext, and Kickstart and Ideaspace from the Philippines. In November 2016, they secured $5 million in a Series A funding round led by the Accion Frontier Inclusion Fund, which is managed by Quona.
Pantera’s Veradittakit thinks Coins could be the most dominant wallet in the region.
“We believe in the team behind Coins. Ron Hose is an accomplished entrepreneur who has run businesses before and is very methodical in his strategic decisions. He has a large vision for Coins and built up a team that can succeed,” Veradittakit says.
To be sure, Coins can’t control all the cogs in the huge and elaborate global remittance machine—service providers may experience technical difficulties, an SMS might not come through, to cite two potential problems—which is why Hose and his team work hard to ensure that the technology is as sturdy as possible.
“At night sometimes you can’t sleep so well, but when I come in in the morning and I open up my e-mail and see the stuff people are writing—we have customers writing day in and day out telling us how they no longer have to ride the jeepney to pay for bills—I say to myself, okay, this is why I’m doing this. There’s purpose. There’s motivation.”