Marco Montes, founder of Saldo.mx, an app that lets anyone in the U.S. pay utility bills in Mexico
Sending money across borders is expensive—but a new mobile app built on the Ripple protocol by Marco Montes eases the burden of U.S. immigrants looking to help their families back home in Mexico.
Marco has been a regular at the Ripple Labs offices in downtown San Francisco as he built out Saldo.mx, an app that allows people in the U.S. to pay utility bills back in Mexico instantly and without the need of a Mexican bank account. It also drastically reduces the cost.
While the cost for international transfers through wire services like Western Union has come down since the 1990s—when it cost $12 to wire $100—today’s fees are still substantial at around $5, according to a 2013 report by the New York Times. But with Marco’s app, this number effectively drops to zero.
His novel approach to solving a big, big problem—migrant remittances to Mexico totalled $22 billion in 2013 with fees averaging 7 percent—is beginning to attract mainstream attention such as from El Financiero (considered the Wall Street Journal of Mexico) and most recently from CNN.
We sat down with Marco to find out more about Saldo.mx and its impact in the community.
So Marco, tell us about Saldo.mx?
Marco: This has always been a very intimate problem for me. Part of it is basic economics. Better, faster, more efficient payments drives economic growth. In the context of my own background, addressing the issue of value transfer has always been a passion of mine. I came to Silicon Valley because I wanted to learn more and work with the people who are heading the financial revolution.
Sadly, I quickly realized how Mexican immigrants share this space but face a very different reality. The truth is, there are two classes of economic citizens. One has access to proper financial services at reasonable costs. The other is faced with shady, predatory alternatives. As a result, I decided to build a transparent, efficient, and simple service, one accompanied with financial education, to tackle this problem at the core, to disintermediate the bad guys, and empower those who need the most help.
With Saldo.mx, anyone in the U.S. can pay for their family’s utility bills in Mexico instantly with no Mexican bank account required. We’re also providing some extra information about personal finance and even microfinance. These communities now have a simple way to track their expenses.
Also, the way things currently work, it’s often difficult or even impossible to see where the money is going or exactly how much the costs will be. Now all of this information has clear visibility and is readily accessible.
Overall, the process is just much more convenient. Today, if you send money, you need someone else on the other side to pick that money up. That might involve traveling to a store, which in many cases could take hours in more remote areas. This a major reason we chose the current approach, why we aren’t technically a money transfer service. Direct payments is much more efficient.
Marco Montes, founder of Saldo.mx, hanging out at the Ripple Labs offices in downtown San Francisco
How has the app been received?
There are already at least 500 people using Saldo.mx for cross-border utility payments. What’s truly exciting to me though is that many of our customers are using the platform for small transactions, such as 10 or 20 pesos. So they’re sending the equivalent about $1 USD. With the current system, those kinds of transactions simply aren’t feasible.
Suddenly, someone is able to support their family in a way they couldn’t before. In other words, Saldo.mx is already enabling something brand new and unprecedented while addressing a real, unserved economic need.
That’s really amazing and a testament to the inherent innovation the app brings to the table. But that also speaks to its creator. Did you have experience in the space previously?
Prior to committing to Saldo.mx fully, I was working on mobile payments for a Telecom company in Mexico. The goal was financial inclusion, to provide mobile payment platforms for underserved communities in Mexico.
That experience certainly helped pave the way for what I’m working on today, but in truth, serving Mexican immigrant communities in the U.S. is arguably a more challenging endeavor. Many issues surround identity, such as legal status or whether or not they have documentation.
I was also involved in the Bitcoin community where I had been working on building a wallet. At the time, the idea was to use the wallet to give financial support to immigrants. I quickly realized that Bitcoin was going to be tough for people to understand. People would ask me, “Why should I buy a different currency?” It became clear that this wasn’t the approach I was looking for.
What attracted you to Ripple?
Ripple is a competitive advantage for us. Without Ripple, we would have much higher operation costs. There’s an incredible amount of important functionality we can leverage from the technology, such as the liquidity pool on the exchange. Anyone can plug into Ripple and in the future, you’ll be able to create very complex payment contracts. You have cross-currency transactions that happen in real-time. That’s a big deal.
Any final thoughts?
This is a 24/7 job. Everyone at Saldo.mx share a vision. We work hard with a lot of passion. The team has been doing experiments and proof of concepts since its inception in 2009. We’ve learned a lot in that time, about ourselves, about the technologies we use and will use, about the problems our customers face. And the more we’ve learned, the more bullish we’ve been about Ripple.