It was during his time working for Virgin Mobile Middle East and Africa that Antti Arponen realised the region’s underbanked people needed a more secure, faster way to carry out daily financial transactions on their smartphones, rather than relying on mobile money services offered by telecoms operators.
And that is when he came up with the idea for Pyypl (pronounced people), a blockchain-based platform that provides digital payments, remittances and a range of other financial services for smartphone users in the MEA region who do not have bank accounts or credit or debit cards.
“[There are] 800 million people in the region who just need simple, day-to-day affordable, safe financial services from their smartphone app screen,” says Mr Arponen, co-founder and chief executive of the UAE-based Pyypl.
“So, when we started seeing this with our telecoms hat on, we also realised that telecom operators are not the companies who can build this to fulfil this gap due to many reasons, including regulatory and technical skill sets — it is just not for telcos.”
In 2021, the mobile money industry processed more than $1 trillion of transactions worldwide, according to the Mobile Economy 2022 report by the GSM Association, the industry body that represents mobile network operators.
In the Mena region, mobile money transactions in 2021 surged 49 per cent to $13.7 billion, while in Sub-Saharan Africa they jumped 40 per cent to $697.7bn, the GSMA report said.
“Mobile money has expanded from a niche offering in a handful of markets to a mainstream financial service, moving millions of households in low- and middle-income countries [LMICs] from the informal cash economy into a more inclusive digital economy,” it said.
“Across LMICs, people are living increasingly digital lives thanks to mobile money, transacting more often and for more reasons than before. The Covid-19 pandemic accelerated this shift as people turned to digital, no-contact ways to purchase everyday items, pay bills, receive government support payments and send money home to family.”
Meanwhile, about 22 per cent of the GCC's population is unbanked, compared with 60 per cent in North Africa, according to a report by consultancy Strategy&.
Seventy-nine per cent of young adults in the Mena region are unbanked and 72 per cent of the poorest citizens can benefit from financial inclusion, according to the Arab Monetary Fund.
It is this demographic that Mr Arponen aims to tap into with Pyypl, which he started working on in 2017 with co-founder Phil Reynolds, whom he met at Virgin Mobile.
Launched in the summer of last year, Pyyple is built on a blockchain platform that uses advanced artificial intelligence and machine learning for regulatory compliance, anti-money laundering and counter-terrorism financing, according to its website.
“It's a very safe and cost-efficient way of building things. But what really matters is that the end user has a good set of services that they feel they can trust,” Mr Arponen says.
“Our product adjusts itself, depending where you are in the world so that it always complies with all the local regulations.”
In February, Pyypl, which is licensed by the Abu Dhabi Global Market’s Financial Services Regulatory Authority, raised $11 million in a series A financing round that will be used to fund its expansion in core GCC markets as well as in Africa, particularly Kenya and Mozambique.
So far, the company has raised $18.5m from a diverse group of investors from Europe, the US, Asia and the Middle East, including UAE-based venture capital company Global Ventures.
Pyypl is working on closing its series B funding round, Mr Arponen says, without disclosing the amount.
The funding has helped the company grow from 30 employees, while it is in different stages of operations in five countries, including Nigeria, Kuwait, South Africa and the UAE. The Pyypl app has been downloaded 2 million times since its launch in 2021, Mr Arponen says.
“We now have 150 employees, we’ve built a global fiat and blockchain-based infrastructure from scratch [and] you actually start realising that we’ve had to be very clever and creative in how to use those funds,” he says.
“We're extremely purpose driven and the actual reason why we even exist is that we want to be the friendly problem-solver.”
Last October, the company teamed up with US blockchain technology company Ripple to introduce an on-demand liquidity solution for cross-border transfers between the Middle East and the Philippines.
The ODL solution enables RippleNet, a network of banks and money services businesses that employ solutions developed by Ripple, to use the XRP digital currency as a bridge between two fiat currencies, allowing them to transfer funds economically and instantly across jurisdictions, the two companies said at the time.
Pyypl also offers its own cross-border remittance service to about 60 countries.
“Depending on the jurisdiction, you can remit globally … you can send money to bank accounts, as cash, to pickup locations, mobile wallets, you name it,” Mr Arponen says.
“Our fastest-growing service in certain jurisdictions where the regulators really support it is the crypto services. So the world between traditional finance and crypto tokens is just merging now — there are people who just use it as [part of] their daily lives.”
Over the next few years, Mr Arponen aims to have Pyppl operating in more than 20 regulated markets in the MEA region, as well as increasing the platform’s user base and adding new product features.
“Realistically, our plan is to grow quickly to millions of users out of the 800 million, whether it's 10 million or 100 million — the demand certainly is there and it's growing every day,” he says.
“Our purpose is really to solve problems for millions, tens of millions, hundreds of millions of people by use of technology. We always say here that our ultimate job is just to create millions of smiles. And that's why we exist.”
Q&A with Antti Arponen, co-founder and chief executive of Pyypl
What other successful start-up do you wish you had started?
Outside Pyypl, which I think is No 1, the second one would have probably been the MetaMask crypto wallet. It's this application that connects mass normal users and their traditional finances into the whole Web3 world. It's the first attempt to try to build that bridge in a mass format. It's a super cool app, although it is still in its early days and clumsy to use. But structurally, it is dramatic.
Who is your role model?
I've always had the same answer to this question. It's all the people who have a crystal-clear sense of right and wrong and who stand behind that and defend it; even if it hurts a little bit more. It's probably a billion people in this world.
What new skills have you learnt since launching your business?
One thing that has happened in parallel with Pyypl is that we've been so fortunate to be in the middle of the whole Web3, blockchain and crypto world. I've even learnt to code my own Ethereum smart contract using selected solidity programming language. So we're quite deep in that and we love it.
Where do you want to be in five years?
It's probably in some small African country where there is still a handful of people who are not active Pyypl users, and I'm converting them into one.
If you could do it all differently, what would you change?
I always look back and try to analyse things in order to learn. But honestly, if I look back now and try to learn, I wouldn't change anything. We had plans, we've always delivered whatever we promised, and exceeded that. So, I think there's nothing in the rear-view mirror that needs major adjustment, which is pretty cool because then I can comfortably focus on the future and do new things.