Félix Pago: WhatsApp, crypto and remittances
To power digital remittances, Félix Pago is taking a page out of WeChat's playbook.
Biography
Bernardo Garcia is the co-founder of Félix Pago, a fintech startup helping Latinos in the US send money back home via WhatsApp. From the US, users can send money to Mexico, Guatemala, El Salvador, Honduras and the Dominican Republic.
In 2024, Félix raised a $15.5M Series A. Since inception, more than 300,000 people have sent money through Félix, representing a total of over $1B.
Prior to Félix, Bernardo worked at McKinsey and Uber.
There are tons of remittance companies. What problem is Félix solving?
When we launched Félix, most VCs had the same reaction: the remittance market is saturated. Not only are legacy players such as Western Union well-implanted, but a flurry of digital solutions (Remitly, Wise, Pangea) have also sprouted.
We realized that actually, the existing remittance companies (especially digital ones) covered only a fraction of the market. People fail to comprehend how large the remittance market is. Remittances literally hold some countries’ economies together. Mexico received around $66B in remittances in 2023 alone! In 2024, remittances in Honduras was estimated to represent around 25% of the country’s GDP.
During our preliminary research, we found that digital solutions collectively only captured 15% of the total remittance flows (ED: that number has since grown, representing a little over 50% according to Visa). The rest was done traditionally, through brick and mortar stores. I myself (a Mexican living in the US) had tried many of these apps and had never been enamored by any of them.
While the market seemed crowded because of the large number of players, the digital remittance problem clearly hadn’t been properly solved yet.
Source: World Bank
What did your MVP look like?
First, we wanted to understand why digital solutions captured such a small amount of remittance flows. After all, sending remittances from one’s phone instead of queuing at a physical store should be a no-brainer, right?
We took to the streets in Philadelphia, New York, Los Angeles and Houston to talk to Mexican diaspora communities and figure it out. We asked why they went to the store instead of sending their remittances via an app. They told us going to a store was “easier”. That made little sense: weren’t the commute to the store and higher fees enough to push them over to apps?
Turns out it boils down to a simple concept: human reassurance. When you go to the store, you tell Mister Nacho how much you want to send and to whom, and Mister Nacho does just that. If you have a question, you ask Mister Nacho. If something goes wrong, Mister Nacho informs you.
On an app, who’s your single point of contact? The small chatbox at the bottom-right? What human being are you calling if something goes wrong? That lack of personal contact (plus the language barrier) was enough to make senders bear the brunt of a physical commute and higher fees.
We observed an interesting, adjacent behavior. Once someone sent money via a store, they’d walk out and send the receipt to the person they transferred money to on WhatsApp. That was Félix’s genesis.
RO insights: tech startups doing non-tech things
Tech startups’ ideal world often clashes with the real one. People have entrenched habits and valid reasons to shy away from tech products. Tech startups are often forced to interact with the “physical” world, handholding people into their digital one.
Here’s how Ammar Naveed, co-founder of Pakistani social commerce startup DealCart, explains:
“For around 60% of our customers, DealCart is their first e-commerce experience. These customers see our ads but don’t have any “physical” space to refer to, which is contrary to the way they habitually shop. For new e-commerce customers, it’s scary to order online from a company you’ve never physically encountered. It feels phony.
We thus set up some DealCart kiosks at certain strategic locations to consolidate our legitimacy for that set of customers. The result of that experiment is that while it helps, changing customer behaviors takes time and effort. The transition to online shopping will happen but it won’t be instantaneous.
We’re also tackling this trust issue in the online world. We have a DealCart Facebook group where users can leave product reviews, ask questions… The goal is to build social proof that we are a legit company selling legit products. Both physical presence and social proof help customers change their habits from offline to online shopping.”
Excerpt from DealCart: social commerce in Pakistan, originally published in The Realistic Optimist
Talk me through the Félix product today.
The sender sends a message to Félix on WhatsApp, just as they would text anyone else. An AI bot then takes them through a Q&A process, asking them how much they want to send, to whom and collects the relevant banking information. Once all of the information is collected, the bot sends them a payment link the sender uses to complete the transaction.
Alternatively, advanced users can text Félix directly how much they want to send and to whom (they can even do it via voicenote) and we send them the payment link right away.
This is conversational but it isn’t exactly “human”. Does it solve the initial problem you encountered?