Changing the Way Cash Is Sent HomeIssue 05-15-17 |
Refugee, economist, whistleblower, entrepreneur—Ismail Ahmed has played many roles in a life that's taken him from war-torn Somalia to London's financial-technology frontier.
Growing up in Somaliland, Ahmed worked in the petro states as a laborer and learned firsthand the obstacles involved in the process of money transfers. Ultimately, Ahmed made his way to the U.K., where he studied economics at the University of London, earning a Ph.D. In 2005, Ahmed got a job with the UN in Nairobi helping money-transfer companies comply with counterterrorism rules. When he discovered a conflict of interest in awarding contracts, he blew the whistle. As a possible victim of retaliation, the UN ethics committee granted Ahmed a settlement of $200,000, which he used in 2010 to start his own online money-transfer company. It's since raised more than $145 million in funding from investors, and today sends cash to 142 countries and has 2.4 million customers.
Remittances sent to developing economies total $444 billion a year. The alternative to the outdated process of transferring money through Western Union, pay hefty bank fees to have banks do it, or trust black-market networks, is mobile money—digital cash linked to their mobile phones rather than banks. It's especially popular in the developing world, with more than 500 million accounts in almost 100 nations. Companies and venture capitalists have plowed more than $1.8 billion into online money-transfer companies since 2013.
Still, WorldRemit and similar businesses face big challenges. Western Union is mounting a digital counteroffensive. And, running afoul of anti-money laundering rules or keeping its system free of illicit transfers by criminals and terrorists are WorldRemit's biggest worries. Undaunted, WorldRemit is expanding into Pakistan and El Salvador this year, and it has secured money-transfer licenses in 47 U.S. states. Ahmed is counting on a surge of remittances from there and Western Europe even as anti-immigration populism is rising.