In this interview with CHIMA AKWAJA, Mr. Michael Femi Simeon, Chief Executive Officer, VoguePay Limited, the emerging markets leading user-friendly online payment platform, speaks on how the Fintech company is bringing succour to Small and Medium Enterprises (SMEs) and the financial services industry.
We started off in 2012, with the same experience all Nigerians go through…
At the time, there were few companies providing it but they were charging a lot. For ordinary startup, the cost was heavy on them. We came to the market, we made things free. The free integration that everyone has today we were the first people who started that in Nigeria.
If you recall, people were charged between N75,000 and N300,000 plus to even have payment connectivity in those days. That’s what few companies who had the capabilities were charging and a lot of startups didn’t bear that cost considering the exchange rate of a dollar. When we came into market we made it free and took off from there.
Fast forward to today, we process over one million dollars a day and all these wasn’t by my own strength alone, it was by our shared teamwork with our partners, supporters and people who have been following our journey over the years. That was how we managed to get to where we are especially with no external investment from anyone. Today, we have over 100,000 SMEs on our platform. Apart from the banks, in fintech we have the biggest customers.
In Nigeria fintechs, there are too many noises and not enough substance…
I think in 2019 as people are learning more, we would start seeing companies that have substance rather than companies that make noises. But I wish everyone luck in the weeks and months ahead because it would be a very interesting one. I think there is convergence happening in the market and in that convergence we would really be on an upward trend this 2019. I also think that the weakest link in the market also would be treading away.
You would see fintech companies enrolling into bank services or providing banking type or banking-like services. From our own perspective at VoguePay, we have already developed all the banking suits even more now. But the way we deployed, we would be working with various banks and various microfinance banks, retail banking and investment banking to provide efficiency and to increase in customer capabilities, analytics and increased transaction levels.
The digital bank capabilities we create would be given to a lot of banks…
Some banks have already started taking advantage of it and would be deploying those capabilities this year. The difference between what we do is the unique experience and the service they provide. We are turning banking into a borderless banking, centralised around harmonising KYC (Know Your Customer) and creating a borderless banking experience.
For instance, if you have a mobile phone and you happen to be in another country like Ghana or UK, your mobile phone will still work without you getting in touch with the network operator in those locality. It would be the same thing the way your bank account would work. I do not want to give too much away but just see it as being able to roam with your bank account.
Also, we are merging together the wallet, what you know as wallet system and banking account; we’re creating hybrid solution. We have learnt over the years that some customers only need the wallet, based on their level of transaction, the kind of service they require, and they don’t necessarily need bank account.
But for those ones that need bank account, you can now upgrade seamlessly and these are the solutions that a lot of banks are very excited that VoguePay can create some of these things. We have been working on this solution for about 14 months and this year it will be launched. I am very glad that we would be starting it out from Nigeria, although some people in the Gulf or in the Bahrain alike want to quickly take advantage of it to be the first mover in the market.
But we are proud Nigerians and we want to give it to certain banks and let Nigeria experience and enjoy the benefits. It would change how we Nigerians save today and by that I mean, it would change how you invest today. It would change how you travel in terms of how you source your money to travel, how you move; your relationship with your transaction will change. We just can’t wait to really go live with some of these things.
In the next two to three years, we would be among the top three most valuable companies to come out of Africa…
In the next five years we would be in the top ten fintech companies in the world. Today, we have offices in Bahrain, Estonia, UK, Nigeria, and we provide service support to our clients/partners in Ghana, Uganda and other countries. By the end of next month to beginning of March we would be in Hong Kong.
Our customers cuts across all continents. We are an international company and our focus is to provide solution that will link this continent to the rest of the world. Yes, there might be Initial Public Offering (IPO) coming up. It might happen next year because by the time we go live we would suddenly have almost six to seven million customers.
The local pricing ratio in Nigeria at the moment is not sustainable for the payment industry…
Within the industry itself people know that the local pricing mechanism is not sustainable for the local transactions. So, how do you now make a viable business out of it, it is by creating additional value proposition. We’ve noticed that if you only rely on payment you will soon die. Consumer behaviour has changed. They want a one holistic solution where the payment become part of them.
The thing we are very good at, at VoguePay is that we are always looking at challenges before people start raising it and start creating solutions around that. For business customers, they want to be able to have refund. As a business if I want to refund you, I don’t want to wait till after contacting VoguePay to help refund the dollar. They want the API themselves, so we create the app for them so they refund on their own.
The pattern we’re seeing is people want to have a control and that control they want it to come from their own side. So rather than us building a platform that is for everyone, we’re now looking at individual unique experience. We rise up to that, we are happy that a lot of customers are satisfied with that.
Another challenge we had, we started getting a lot of French customers, that is, French speaking customers; initially we had to rely on Google to interpret what they’re saying but we noticed that with the level of French speaking customers we were getting, we couldn’t just rely on Google translator, so we had to set up a team to address that. Now, VoguePay in French is in development, we have French speaking customer service. These are the small tedious things that really matters to our business but overall, 2018 has been our best year.
Getting funding is not a badge of success. It is a term that someone believes in you and wants you to progress but at what cost?…
We have taken a totally different route and used the Nigerian edge. I can categorically say that in fintech space today, we are the only fintech company that have never raised money. We are not only operational, we are also profitable with our transactions in millions of dollars. I don’t know any other fintech company that can lay claim to that.
And you want to ask, how do we do it? Are we not in the same space? We are in the same space. People spend time on how they’re going to raise the next amount and we spend time on how we are going to raise the next customers and partnerships which eventually generate more revenue for us.
Therefore, we are not easy prey to a lot of venture capitalists. Someone can’t come to us and say let me take 50 or 30 per cent. They know that the math doesn’t add up, we are not desperate. Of course, at some point when the right partner comes we would recognize that. If you look at the WhatsApp, they didn’t raise money to develop their stuff. Even before Instagram was bought they didn’t raise money. Raising money is good if you can do a lot of good things with money and it will also give you a lot of noise.
We need policies on technology advancement which is key not only because it poses a threat to Nigeria as a country…
Let me elucidate on that. Nigeria is facing two threats from two angles, one is technology threat, that is, people are spending billions trying to develop lithium battery and what that does is that it will affect the price of oil. The price of oil is what Nigeria is dependent for foreign exchange. When you now have technology coming to take over what people usually use petrol for. You don’t have to be a scientist to know what kind of situation it will have on the country.
Electric cars are coming. Factories will start using battery to power their daily operations. It will affect purchase of crude oil. Then the second threat we have is environmental issue. The world will shy away from dirty oil. The technology is coming into place. The Saudis were not mad when they started investing into batteries. They have more oil than us and even produce more than us but they’re also investing their money in technology.
The same thing with Dubai that Nigerians keep going to for tourism. Dubai knows that the sell-buy date for oil is written on the wall and you don’t have to wait until things collapse before you start moving your things. You can see why it must be in the interest of the government to invest in technology to ensure that we don’t lag behind.
If an aspiring entrepreneur has customers in front of him and he is devoting energy saying if you can’t raise funds he can’t progress, it means he is not actually an entrepreneur…
We did an article on how we made it in Africa and I was explaining the same thing to them. Entrepreneurs will make it despite the struggle and lack of money. I mean, if you look at some local family businesses that you have in Nigeria, whether it is Fan Ice Cream, those companies have been going on for a long time. And if we look at it locally, go to Balogun market for example, there are some shops there that have been there for a long time and that energy of building relationship, building customer is highly valuable than money.
What I would say is, entrepreneurs should always look at strategy that will take them to the top and not to the bottom. And they should never think that because someone gave you money that means that you are successful. What I will always say to people is, identify your market and master the market. Know that your market is never a stationary post, it would be moving but once you understand the pattern of the psychographic of what your market is, who you’re serving, and master the market you are trying to capture. Secondly, never underestimate the local know-how of doing things, you cannot underestimate that in anywhere you are.
Thirdly, always know regulators are also there to prevent you from excesses. I mean, how do you define innovation? Most people who innovate today are people who ordinarily felt the regulator will first of all fight it because they are not used to it. A classic example looking at crowdfunding, in the UK it was fought against but when the regulator saw that people want to crowdfund, it had to set rules for it.