Millions of Latinos in the US rely on sending money home to support loved ones in Latin America.
Enter Felix Pago, a financial service platform designed to make this process easier than ever.
What is Felix Pago?
Unlike traditional money transfer services that require app downloads, Felix Pago is integrated with WhatsApp, a popular messaging app used by almost everyone in Latin America. Users initiate and complete most of the transaction via a user-friendly WhatsApp chatbot, eliminating the need for additional apps or complex registration processes.
Why is this process so complicated?
Manuel J. Godoy's journey with Felix Pago is deeply rooted in his personal experiences and the challenges he faced as an immigrant. His inspiration stemmed from the difficulties he encountered while trying to send money back to his family in Venezuela.
When I moved to the US, I realized how complicated it was to send money back home. It was expensive and time-consuming. I knew there had to be a better way. - CEO Manuel Godoy
Felix Pago’s Iteration Process: From e-commerce to remittances
Today, Felix Pago is a financial service platform designed to simplify the process of sending money from the US to Latin America, however initially, Godoy and his co-founder tested various hypotheses, including cross-border e-commerce.
However, they quickly realized that users primarily wanted to send money, not goods. This insight led to the development of a WhatsApp-based service that mimics the trusted in-store experience. "We started with the idea of cross-border shopping, but quickly realized the primary need was sending money. That's when Felix Pago was born."
Felix Pago leverages WhatsApp, an essential communication tool in Latin America, to provide a user-friendly remittance service. This approach addresses the trust issue by emulating the familiar process of sending money through local stores while offering the convenience of digital payments. "Using WhatsApp was a game-changer. It’s already a part of daily life for our users, so integrating our service there made it easy and trustworthy."
WhatsApp is the operating system of the region, so it makes sense that we build something on WhatsApp to make it super easy. - CEO Manuel Godoy
How does Felix Pago work?
It’s simple. Follow these three steps to send money with Felix Pago:
- Text Félix via WhatsApp: Initiate the money transfer by sending a message to Félix on WhatsApp. No need for any apps or complicated registration processes.
- Send money now: With Felix Pago, users can send money instantly from the comfort of their home. No need to visit a store, handle cash, or wait in line.
- Receive immediately: The money arrives instantly! It can be deposited directly into a bank account.
Felix Pago offers competitive rates starting at $2.99, ensuring budget-friendly transfers. This is achieved through their use of Circle's USDC stablecoin, which reduces foreign exchange costs and allows them to offer the first transaction free, similar to competitors like Remitly and Western Union.
For subsequent transactions, Felix Pago keeps things affordable with rates as low as $2.99 to Guatemala and Mexico, and a tiered pricing structure for Honduras. Overall, these fees are substantially lower than those associated with traditional SWIFT transactions.
Early Challenges
One of the significant challenges Godoy faced was the regulatory landscape of the remittance industry. Regulations often create friction in providing seamless financial services to immigrants.
For instance, immigrants without a social security number face difficulties in sending higher amounts of money, despite having an ITIN number. Moreover, many companies avoid targeting Latin American immigrants due to perceived risks associated with money laundering, which Godoy believes is an oversight. "People think it's risky to serve Latin American immigrants because of money laundering fears, but the real issue is the lack of understanding and tailored services."
Another challenge was gaining users' trust. As Godoy explained, many immigrants prefer sending money through familiar local stores, forming a habitual trust relationship.
"Trust was deeply embedded in the whole process," he noted. Overcoming these trust barriers required innovative solutions and persistent user engagement. "Building trust was our biggest challenge. Immigrants rely on known faces and places. We had to become that trusted entity."
Founders
Manuel J Godoy & Bernardo Garcia
What's ahead for Felix Pago?
Godoy envisions Felix becoming the financial companion for Latinos, expanding the services that they offer to their current users. In the short term, he (Godoy) sees expanding Felix Pago's reach and improving the user experience on both the sender and receiver sides. The company is working on enhancing the beneficiary experience by partnering with local stores and financial institutions in recipient countries. This includes making cash pickups more reliable and convenient.
"Our goal is to make the entire process seamless, from sending money to picking it up. We're partnering with local businesses to ensure this."
The company also aims to tackle regulatory challenges by building robust KYC and risk prevention systems tailored to the needs of their user base.
Additionally, Felix Pago plans to leverage partnerships with major players like Mercado Libre and Nubank to scale its operations and offer more comprehensive financial services. "We’re not just stopping at remittances. We want to provide a full suite of financial services, and partnerships with major players are key to this vision."
Funding
2024, $15M (Series A) Castle Island Ventures, Switch Ventures, MELI Capital, H20 Capital, Contour
2023, $7M (Seed) from Switch Ventures, Meli Capital, and others
2021, $2.2M (Pre Seed) H20 Capital, Wollef, GFC, Contour, and others
Market Opportunity
The remittance market in Latin America and the Caribbean presents a significant opportunity for Felix Pago. According to the World Bank, in 2022, remittance flows into the region increased by 11.3% to reach $145 billion, following a record increase of 26.5% in 2021. This growth was driven by the strong labor market in the United States, highlighting the increasing demand for efficient and reliable money transfer services.
With approximately 1.4 million Europeans and 1.3 million Northern Americans residing in Latin America and the Caribbean, and around 11 million migrants from other countries within the region, there is a substantial market for remittances (International Organization for Migration).
The need for efficient, affordable, and convenient money transfer services is underscored by the substantial migrant population. Felix Pago can continue to tap into this market by offering a simplified, cost-effective solution for sending money across borders.
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