Inside Felix's Stablecoin Remittance Playbook w/ Manuel Godoy

Speaker A: Felix started with really the goal to be the financial companion for Latinos in the US but enabling the easiest way to send money back home. Folks who come out of the store with a receipt, they would snap a picture of the receipt and send it over to WhatsApp. WhatsApp was part of the habit, right? So we started building, uh, from day zero, uh, leveraging stablecoins on WhatsApp. With stablecoins, uh, you essentially accomplish economies of scale. Even, uh, a small startup. To win in this market, you have to be the best on WhatsApp, period. We always knew that we weren't going to be just a remittance company, right? We wanted to be a financial companion. Send us a voice note, text us, and we'll be smart enough to understand your needs.

Speaker B: Views are personal, not investment advice.

Speaker C: This is moneycode. It's a show about stablecoins and agentic finance. I'm Chuck Okpalougo.

Speaker B: And I'm Raj Parikh. And today we have Manuel Godoy, co founder and CEO, uh, of Felix. Uh, Felix is, as some of you may know, one of the leading women's payment platforms, uh, moving billions of dollars to Latinos and immigrants all over Latam. Uh, Manuel, thanks, thanks again for coming on. Uh, maybe Manuel, just as we, as we start this conversation, maybe if you can orient folks, you know, the origin story of Felix, how it started and you know, what is it becoming today.

Speaker A: Of course. And thank you, thank you guys for the invitation. Excited to be here. Felix started with um, really the goal to be the financial companion for Latinos in the U.S. uh, but enabling the easiest way to send money back home. Interestingly, um, when my co founder and I met in uh, business school, uh, we didn't know we were going to be co founders. Uh, but it was very easy for us to realize that we were compatible and were extremely passionate to build something. And in those conversations we started to realize that as ah, immigrants, Latino immigrants in the U.S. i'm from Venezuela, he's from Mexico. We were close to the problem of accessing the best financial services possible here in the US Um, particularly for me, I've been fortunate enough to, I went to school in California, I lived for a long time in Texas. Always being close to the, to, to Hispanic community to an extent in which, you know, learning how and admiring how they come to this country to work hard to send money back home. So uh, it was something so like back, back of my mind. But I always remember also one occasion, uh, I was in Houston. I was 27 at the time. My mom calls me and she says like, hey Manuel, I, I, I need to send money to your grandma, uh, for an emergency, but I can't find a way. And interestingly, uh, you know, in m my mind I thought, you know, my mom, probably your setting on your phone is gone bad and I gotta go to your house and maybe put the phone back in Spanish. But, uh, it was something much more complicated than that. Um, some of the listeners here may know about some of the, obviously the bad situation of that's been going on in my home country, Venezuela for the last, uh, you know, 20 or so years. And so, so really sending money to Venezuela has been problematic and we had to hack our way into doing that. We had to m, you know, send a zell to somebody here in the US A person would take the cash out and drive the cash to my grandma, who used to live in a rural town back in Venezuela. Um, at the time I thought it was something very specific to Venezuela, but it was, it was, it was obvious that was a problem that was growing, um, then going back to where we were in business school thinking about ideas. Um, funny enough, we're sitting at a class and a professor shows a graph illustrating how remittances have been growing exponential rates for the last 50 years. And a professor, and the punchline of the graph was that remittances tulatam at the time, $90 billion, uh, 80% of those were still originated in cash in stores. So imagine that people will commute to a store, standing in line, paying the fees. And I connected it to my personal story. And to me it's like I understand why it's painful to send to Venezuela. Why is it painful to send money anywhere? Why painful in my mind is you going and walking to a store or sitting in a car for 20 minutes to park the car to then stand in a line to pay outrageous fees. So that to me didn't make sense. So that inspired us to go and talk to users. Uh, we were in Philadelphia at the time and we would go to South Philly, which is a, um, location, uh, with high density of Hispanics. We would stand outside Western unions, um, playing our student card, uh, so that they would uh, talk to us. And the, uh, pandemic was ongoing by the way. So obviously it was not a great time to be talking to people. Uh, but we started to learn a lot from remittance senders. And after a lot of conversations we realized two main things. One, folks deeply trust the store. It's a choice that they make in going to the store because they know that the money is going to get there. It's the same store that they've been using for years. For years or if not decades. And that gives them peace of mind. And peace of mind is important. Trust is super important. And uh, these are folks again, they have probably all of the folks that we talked to, they had a smartphone, they had a bank account, they have all the tools to send the money digitally. They just decided not to. But the second thing we realized, the second, uh, aspect, uh, of the behavior was that folks would come out of the store with a receipt, they would snap a picture of the receipt and send it over WhatsApp to their family member in Mexico or Central America, because on that receipt you have the unique ID number that the person there needs to collect the cash. So WhatsApp was part of the habit. By then we had already tried and failed with many different ideas of solving the problem. Uh, at this time we said, why not emulate experience on WhatsApp, that human experience, but enabling the convenience of digital payment. And ah, that's when we finally start to see some actual pro market fit. And we knew back then, by the way, that stablecoin or crypto in general really back then, had to play a part because it was obvious to us that that was the best way to reduce the cost. Then we started actually doing it with, um, measuring it, uh, with data, uh, versus other providers in the traditional world in Tradfi, it was clear stablecoin was clearly more valuable. So we started building, uh, from day zero, uh, leveraging stablecoins on WhatsApp.

Speaker C: That was an interesting detail that you mentioned there. So, you know, you had it in your mind, you knew the problem, you were determined to tackle it. And it sounds like you tried a few things first before actually getting in front of users, talking to them and finding out that this trust thing was really critical. And then the WhatsApp part was also in the flow. What were the other things that you tried?

Speaker A: Yes, no, great question. And uh, you know, funny enough, uh, being when we saw that first problem that I, that I told you, um, we were like, we're thinking that we're the smartest people in the world. We're like, okay, we know how to solve this. Right? And we started like being like very um, book nerds and trying to understand how do people use the money. And so we started realizing that people would uh, actually use it mostly for like buying groceries or for, for like the, the, your normal daily or weekly, uh, shopping groceries, um, utility bills. Right. So we said to us, we said, or, or medicine actually as well. Um, so we said, why don't we enable users to pay for those things directly from the US and we would eliminate the fee and we would monetize, uh, with the business partners, right, with it, with it, with the retail stores back in Mexico. We were clear that we wanted to start in Mexico first, right? Because biggest market we can go to a smaller, uh, community and go deep there. Um, and we're like, wow, we're so brilliant. This is a beautiful business model. So we went out to folks and we would put um, ah, like a demo type of thing. It was really like a, it was a WIX page by the way, back then that had a few buttons that would allow people to buy. And they were like, oh, this is cool, amazing, but you know, I don't care. Like, people would say like the first thing, it's like this amazing, but really, they wouldn't really care. Uh, and there's this whole thing around. There's um, a book called the Mom Test. Where is it like, how do you ask the right questions to users? Because users are nice to you. You gotta like, really understand the behavior. You gotta really go deep in doing research. Um, so very quickly we realized this is not going anywhere, um, and started learning that users really wanted to send money. And this was more anecdotal, but then we put a button in that flow. We said, okay, you can pay for services, you can uh, buy groceries, you can pay for medical bills, or you can send money. And people will be like, wow, amazing, all these options. And they will click send money, right? So they actually want to send money. And by then, actually it's interesting, I was talking to a friend from the mba and I introduced me to this concept of the dead weight of gifting. Are you guys familiar with that concept? So when you give a gift to somebody, like let's say you give a gift to your significant other, you give them a book, that book is worth $20. Say it's a nice gift, but for them the value of that may not be $20. Like if you give them $20, they're gonna actually maximize the, what they want to get, right? Maybe they go to the, to the movie theater, right? Uh, maybe they buy coffee, whatever. Maybe $20 is a cheap gift for your significant other in December, in Christmas. But uh, I think you get my point. Um, so the point being that the user really trusts the beneficiary to maximize the use of the money. That's what we started realizing that they, they want to send $300 and they really trust that, you know, their son or their mom or their brother or their friend are going to maximize the use of those funds. They can go to the grocery store, they can pay the water bill, and if they want to have a beer over that, that's fine, right? That's okay. Um, so, so then we pivoted to like, okay, let's focus on, on just sending money. And again, we built this cool kind of like app, uh, type of experience. And people say, okay, but very tropicalized. We're saying, like, we're going to be very hyper focused on this user. We're making Spanish. We're like, okay, we now nailed it, right? And again, like, people would be like, oh, yeah, cool. But like, whatever we want to see. Like that that's so like, uh, pro market fit, if you will. So that's when again, we realized that, um, the story that I told you, after talking to a lot of folks, actually it's interesting because I, I learned this guy, I learned something about a person that would, um, he had moved to Philly ten years prior. Uh, but then a couple years before that, before I talked to him, he had moved to Jersey. So he had been going to the same store for two years from Jersey to Philly, one hour commute to go, some money from the same store. So it's crazy, right? Because of trust that he has on the store. Like, no, no app, uh, is gonna make him change, uh, that behavior. So. But when we actually started building this on WhatsApp, ah, by then we already have a lot of users, or not a lot of users, a lot of folks that we had met that we be potentially users. And um, you know, we would start, go again to South Philly. You know, people, by that time, they were already tired of us talking to them. And I started telling them, hey, write to these bots. It's gonna, you know, it's gonna help you through the transaction. And there was still this kind of trust barrier, right? And I, uh, had this person, Leticia, who was our customer number one, who I had met. I, um, known, I known her for years. She, um, she works for my brother in California. My brother was super nice to her. Ah, she helped her bring their children to the U.S. um, she knew my family, there was some trust. And I was like, hey, Leticia, you know, why don't you try this product that we're building on WhatsApp and you can send money. And again, she knows me and she's like, uh, no, I'm okay. Like, I don't want to do that. I mean, wow. But like, just test it. And she's like, ah, uh, okay, fine. So that tells you a lot about the trust barrier, right? And, but it's interesting because I saw her going through the flow of WhatsApp, uh, sending money, and then she got the receipt and once she confirmed that the money was actually deposited on the other side, her mind was blown. For her, it's like, how the heck, like, the only way to send money is going through a Western union? Like, how, how can this be magic, right? And, and then I saw her telling her husband, her sister in law, uh, her husband's name is, is Ramon. Sister in law Guadalupe. Guadalupe's husband, Gregorio. They're all customers of Felix today. So she became, she went from hesitant to, to a trusting user to an ambassador. And that's been the reality for Felix all this time, that people get marveled by the experience on WhatsApp, uh, how easy it is, how fast it is, and then they become ambassadors of the product.

Speaker B: That's, that's an awesome story. And like, I think the cool part about the entire story is that you're talking so specifically about the user, the problem, the pain point. Um, like, you know, I think sometimes in the, in the fintech stablecoin world, we get so caught up in like, can you, what's the layer below that? Can you talk about the plumbing and all that sort of stuff? But what you've described is like, hey, that's actually not the point. You can always figure out the solution and reverse engineer to liquidity and whatever, settlement times, all that sort of stuff. But a lot of what you're talking about is real empathy for the user, which I think is, I think a really important point to take away from that entire story. And I guess from Leticia Ramon using, using Felix Pago at the time, like, how, like, how did it change and evolve? Like, the story of like, what the app and product became after, like, how did you guys take it from like that small cohort of users to say, we need to scale trust to a lot of folks because they happen to know you and there's still like this friction in trust. But then now you have to scale it to like, many, you know, tens and hundreds of thousands of users. Like, how did you scale that even further from there?

Speaker A: Yes, 100. And, um, by the way, and the point that you made, I cannot agree more. It's all about the user. And Steve Jobs says it in a elegant way. Naturally. He, Steve Jobs, he says, you Gotta focus on the solution and then walk backwards on the technology, right? So then you know what to solve and then you figure out how to solve it, right? And before Felix, I was, ah, um, I learned the hard way, right? I fell many times because I would fall in love so much with the product, with the technology, with just writing code, uh, without really talking to users. Um, so it's very, very important, um, getting the trust of user being an evolution. And it's still a thing for FedEx, right? It's the thing. Um, today we're lucky to say that 70%, roughly 2/3, 70% of our users come in some organic form or word of mouth. So that's either actually True Organic on WhatsApp or via referrals or organically through, um, Google or to our website. And when we survey those users, they say, yeah, a friend told me about it. Uh, uh, but, um, you got to reach critical mass so that word of mouth kicks in. So at the beginning it was really painful. It was really, really hard because it was. My co founder and I were the best salespeople in the world for this. Uh, we would convince folks in the streets of Philly. We then went to, uh, other places in Pennsylvania. Then we went to Jersey, New, uh, York, we went to the Bronx, we traveled to la, talking to users all the time. We then said like, okay, this is working. Let's build a brand ambassador team, right, folks, that would go out and convince users extremely hard to do, extremely hard to scale because you gotta hire people to sell their product. There's nobody better than founders to sell a product, right? So it's really, really, really hard to do. And kudos to those that have actually nailed that one. Um, so we would still be like, um, okay, let's um, test paid advertising, right? Facebook and Instagram and TikTok. We didn't test back then, but Facebook and Instagram mostly. We knew that our users were on Facebook and it was still really, really hard, right? Because they get bombarded by so many remittance providers. Why would they trust a new one? And um, it took a lot of iteration. We would still kind of try out, uh, referrals in the beginning, but again without critical mass, it was really, really hard. Um, what happened was, um, in, in December 22nd, uh, after a lot of like, experiments on paid media and whatnot that we're kind of giving us, getting us customers we would like maybe overspending on, on, on free, uh, free fees or a better effects on uh, December 23rd, 2022, we tested with an Influencer on Tick Tock. It was the, the ugliest video you could imagine, right? So it was this guy that had like dollars like behind him, like, like this animation dollars falling behind him, like kind of random. But, um, but this guy, he's, he has a few, he had hundreds of thousands of followers back then. Now he has like uh, more than 2 million. Uh, he, but he, he said he was, he's a, he's a newsman, right? He, he would provide news to folks. So he was trustworthy. He's a serious person. Right in Tick Tock. And he posted on December 23. Felix went crazy December 23, December 24, December 25. So Christmas, it was the whole company, which back then was like 14 people chatting. We didn't, we hadn't everything, we hadn't had everything automized, uh, automated. Back then we had to kind of actually chat with people, uh, especially when they were asking questions. We were like everybody 24, seven connected, chatting with people. Uh, and again, LLMs weren't there back then. So back then it was our natural language processing algorithms trying to automate as much as possible. Um, that one was really the catalyst for Felix. But it tells you something about trust because trust was the driver. Folks, influencers, what they have that is powerful is that they uh, they have a follower base that trusts them. And influencer marketing was really our first sort of like uh, catalyst for growth. Um, and again in parallel we'll continue saying like, okay, you referred your friend, right? And these folks will also will refer friends organically as well. Right? So we've started having these word of mouth effect, um, so uh, that drove away from users. That's still the case for us today. Like we still leverage influencers. Um, then we started leveraging partnerships, um, partnerships again, they drive trust partnerships on the other side where we partner with Mercado Libre and kudos to them because we're very scrappy startup, uh, still 2023, very early. And they placed a bet on us, uh, on doing a partnership in which they would allow their users in Mexico to request a remittance, ah, via Felix on WhatsApp.

Speaker B: Right.

Speaker A: So it was extremely easy to do. So that was also another catalyst of growth. And then we started signing all the partnerships like Nubank. Um, now we have in Mexico, we have stories spin in other places. We have YAP in Peru, Bancorp, uh, the main, the main fintechs or banks in Latin America are partnering with us. Uh, and then again, like I said, like a lot of word of mouth effect, uh, referrals we started maturing referrals, understanding how to do referrals. Right. Optimizing the funnel. Um, which has been a lot of. I, uh, wouldn't say it's been. It was like a one unlock. It's being a constant experimentation process to unlock referrals. Um, but it's being incredibly important for FedEx as well.

Speaker C: That's awesome. And it's really important to continue to develop all the different channels and they kind of rely on each other. And so it's a bit of experimentation and then going back and then unlocking um, them and then doubling down again on the ones that are working. But just to give us some context, as you've talked across all the different years, how has the kind of the volume of the users and payment volume, um, uh, evolved? I think I saw something recently to say that you, you've reached lifetime 5 billion of volume. But that's a couple of week months ago. So maybe you've got some more updated uh, numbers to share.

Speaker A: Yeah, we're now north of 6 billion, approaching 7 billion very soon. Uh, we might be even north of 7 billion by now. But uh, but yeah, we're growing really, really fast. Um, we've been 3x in the company year over year every month for the last few months. Um, so even at the scale in which we are, um, which is now for Mexico alone, we have around 7% of the market share.

Speaker C: Right.

Speaker A: And we have a strong market sharing in other quarters. And us to Mexico is the largest quarter in the world. Um, so, um, even at the scale in which we are, we continue growing at a tremendous speed.

Speaker C: And which are the other corridors that you're currently in?

Speaker A: Yeah. So as of now we have Mexico, Guatemala, Honduras, Nicaragua, El Salvador, Dominican Republic, uh, Ecuador, Peru, working extremely hard to enable Venezuela especially uh, because of the sad news recently about the earthquake. We're doing a tremendous effort there. The team has been working day and night to not only enable a donor flow, but also a Venezuela flow. Naturally, a lot of uh, regulatory, uh, uh, constraints, but working really hard to open. Venezuela and then, And Brazil is also uh, uh, uh, another sought after quarter that we want to open.

Speaker B: I think you know, two themes that I'm hearing a lot from you is like one in the beginning, like scaling trust, um, and then personal responsibilities like some of the principles that you know, that, that I'm hearing from Felix and we can kind of, there's a lot of, you know, like I said before, you can go deep into the weeds and the tech. But at the end of the Day, like what you embody as a company, as a team, is trust and responsibility. And I guess maybe two questions for you. I've grown up last many years just learning about Felix Pago as a brand. And now I'm starting to see Felix and you're talking about this expansion of products. Maybe we can dive deeper into that. And then maybe the other question I have for you is, um, one thing that I've seen just interacting with other folks on your team is that they all kind of share that same personal responsibility. Also maybe just describe. We've talked about scaling users, but maybe if you can describe like scaling team and then how that relates to like scaling, you know, scaling from Felix Pago to now Felix, uh, as a, as a new entity and new business and new. New.

Speaker A: Yes. No. Excited. I appreciate the question. Um, it's interesting because the name Felix came from in those early days. We actually didn't have a name until like, uh, for the longest time. Uh, but we, we knew we had to be like, like, we, like, it sounded. You're talking to somebody like it's a person. Right? So the great thing about, about Felix is that, uh, you can say Felix because Felix, it sounds. Well in Spanish. It sounds okay in English. It's, it's very multilingual, multicultural. Uh, it sounds like happiness, like Felicia in Spanish. And, and, and it has a very nice touch to it. Curiously enough, when I went to buy the domain, felix.com wasn't available. So I had to buy felixpago.com. right. Um, so Felix Pago started to really take off and we're like, okay, Felix Pago makes sense. If our user, uh, are saying Felix Pago, let's just call it Felix Pago. Uh, but we always knew that we weren't going to be just a remittance company. Right. We wanted to be a financial companion. So now it's great because now it's a time for us to be much more strategic and say, okay, we have Felix Pago. It's remittance and payments, or not just remittances, but payments. But Felix can actually be that trusted financial companion. And so we're now strategically, you know, putting Felix more, um, as a primary sort of company name and to start kind of like building sub, uh, entities below Felix, um, for the products that we're launching. Um, and to your second question, man, it's interesting because I started to realize that and I learned this from a coach, you know, the, the what the job of CEO is as a company skills. And it's really three Things, um, at least that's where my mind is today. It could change, but that's what I realized, at least so far is that responsibility number one is, you know, money has to be in the account, you have to pay, you have to um, allow for, to bring the best talent possible and pay them appropriately. No. Um, and that means also, uh, fundraising, but also making sure that there's a business model that makes sense.

Speaker B: Right.

Speaker A: Um, 2 is hiring the best talent possible. Right. So my co founder and I have always been very close to recruiting. Even now where we are, uh, north of 400 people, we are very, very close. Uh, and I've interviewed probably half of that. At some point we were blockers of the recruiting process because they couldn't find time on our calendars. So we started splitting um, between microphone and I. Um, but we're very close to the process. So hiring talent and then three is maintaining culture. So maintaining culture at scale, it starts to become really almost like full time job. Um, and you start obviously to doing things that work artifacts like company values. We have the Felix way of work, how we work together. Um, the people that we bring has to have certain characteristics. But it starts to become like, okay, it's not only what we say, we have to embody it. Every single interaction that we have with the company. If we're making a change, a cultural change, we added one value, uh, not too long ago which was, um, we have to aim for insanely great. So far we've been always like a scrappy startup where we get stuff done and it's very live, but sometimes we move too fast and it's like the Facebook thing where move fast and break things. At some point you cannot break things because at scale you cannot break things. And I think Facebook was famously known for changing, adjusting the value where move fast, don't break everything. Um, so aiming for insanely great means what you're launching is great from different perspectives, is scalable, is reliable. Um, but just putting a new value out there, it means nothing. You have to actually repeat it and leave it and making sure you reward for it. Uh, so I think I would say that the combination of job 2 and job 3 for CEO allows to the culture to scale recruiting. The people that you know is, are going to be cultural ambassadors, are passionate about what we're, what we want to accomplish and you start realizing that people are passionate, are going to figure out on the way, no matter their skill set, they're going to learn, they're going to just found solutions or find solutions and then and then making sure that the culture is, is life. It's, it's a, it's a day to day job. It's in the nuances. It's how you talk to employees, how you handle meetings, uh, how you reward people, how uh, you praise people. Um, um, it's fun, uh, but it's a nice challenge.

Speaker C: Yeah. And it's a challenge that I'm sure has changed throughout the evolution of the company. And as you grow and you scale from single product to multi product, multi products across multiple jurisdictions, then those things compound and so it's an ever evolving journey, I'm sure. Um, but you know, thinking about the technical side of things and I guess specifically, you know, this you know, facilitation layer that we call stablecoins or blockchain or stablecoin infrastructure. From your journey, from the beginning of you know, being scrappy and trying to make it work and then making it work in Mexico and then making it work across other corridors, what lessons have you learned about where stablecoins are actually helpful or where blockchain technology is actually helpful? What did it actually unlock versus not um, how has that compared versus across the different corridors?

Speaker A: Yeah, great, great point here. And let's go back to the origin story, um, in which again we started learning that our users needed something that was extremely easy, uh, trustworthy to use on WhatsApp. Uh, but we uh, haven't mentioned price. So obviously price is important. And uh, when you don't have economies of scale, obviously as a scrappy startup, I mean it's a, some money losing proposition that you want to compete with Western Union. So how do, how you know, how do you figure that one out? And it was almost obvious to us that crypto had to play a part. And from my perspective, uh, as a Venezuelan, when you grow up in Venezuela, when the country's currency gets destroyed by central control, um, you appreciate what crypto, uh, does and uh, what Bitcoin has done for humanity really. Uh, and, but, but we're like, okay, let's, let's really kind of like understand this. So I actually built a script that would scrape um, all the data for, for, for like crypto trading here in the US and crypto trading back, back in Mexico. We're thinking okay, what, what if we allow our users to buy Bitcoin and then we send the Bitcoin and then, and then convert it to fiat. So it would be like a Bitcoin sandwich. Right. Uh, we, we started thinking into this, but we also in parallel started realizing this folk this person. These people don't really care about crypto. They care that their family gets taken care for. So it's like we have to figure out a way that they don't, they don't see that and so, or they don't see the crypto. So we started realizing that Bitcoin wasn't, wasn't feasible because you, we would bring volatility to the flow and either we show that volatility when pricing for the user or we would eat that volatility which would be kind of complex. So we're like, okay, stable coins make sense. So let's look at stable coins. And then um, you know, back then there was the myriad of, of algorithmic still the coins which you know, were um, gray. Maybe one way to describe them back then. Uh, so it was clear to us that we had to work with a stablecoin that was, that just give us the, that just had green flags if you will, like we could trust it. So it was clear that to us that USDC could be a great candidate. Um, because it's auditable, it's backed by us Treasuries, all the positive things about USDC that we know. Uh, so we started actually looking at USDC data. Okay, what if we on ramp in the U.S. what if we off ramp in Mexico with Bitso at the time? And we started realizing, okay, USDC could make sense. Um, and interestingly um, we started doing the stablecoin sandwich back then that concept didn't exist. I actually first heard that term maybe last year where uh, our head of fintech partnerships back then, he was like, you know, they mentioned this, they said that we do stablecoin sandwich, uh, and like, oh yeah, I guess that's a nice way to call it. But we were doing that for years, um, and we started to see in the data that we could actually have a very good cost. Because essentially what happens is with stablecoins, uh, you essentially accomplish economies of scale, even a small startup, because you're literally trading USDC or off ramping into fiat in an open market. Right in the books at the time there was the books of Bitso. And I think uh, we all have a libertarian man here where you're offering that stablecoin in open books, you're going to find the best cost and that cost is going to be close to the market. So the cost for us was close to interbank rate. Uh, naturally when you're small you still have the trading fees that you have to pay to the, to the changes. That's fine. But Even with those fees, it was still much cheaper than going to, going to effects providers that has, um, that have a myriad of intermediaries that have to deal with Swift, they have to deal with working capital and they have to deal with the intermediaries that take commissions along the way. And then if you go directly to the books of crypto, then you sell directly. So the cost was obviously better and allowed us to accomplish economies at scale, um, a small startup. Um, and that's also what led us to go and talk to Circle first. So uh, Circle was really our first partner, which I'm always going to be appreciative of being great partners so far. But that allowed us to mint in the US and then we went to Bitso, allowed us to off ramp, um, and then now we're replicating that model all throughout Latin America. Like the challenge is that you have countries like Mexico where you have a mature crypto market, but then you have countries like uh, Nicaragua that is more tricky. Like there's no otc, there's no exchanges. Um, so in some countries Central America go directly with some otc, some countries will have to go the traditional route, which is more expensive and cumbersome. But again, what matters to the user is that the money gets there. I always say that it could be a donkey going through the border.

Speaker C: Right?

Speaker A: It doesn't matter. What they care is that the money gets there fast. Um, they naturally care about price. So it's our job at FELIX to build the best infrastructure to reduce those costs and pass those savings back to the user.

Speaker C: So what happens in those markets where there isn't this deep trading infrastructure? Do you have to build it out yourself? Does it end up being cheaper than if they went through, um, Western Union? And how does that work out when all that infrastructure isn't already there?

Speaker A: Yeah, it's a challenge. I'm uh, not gonna lie. But again, going back to we're user first, so we give the best price to the user that we can give and we work when there's no liquidity or providers. We work with traditional providers and that's more expensive. So in those quarters the margins are worst or worse than let's say Mexico where we have a very, very mature crypto rail. So that's what happens really. Uh, but we go obsessively. We have a tremendous business development team that their sole job is to optimize Rails and that means going and find those local liquidity providers to optimize that. Um, so, um, yeah, it's a real challenge. Um, we Solved by using traditional Rails offering remittances to users. Um, those quarters have a bad margin and then we go and optimize and

Speaker C: does it mean that in the future as you provide a service to the user that ends up being a good price for them even though it may not be good margins for you within a volume you can either negotiate better or attract more kind of cryptocentric liquidity to say hey guys, we have volume in country X, we need more kind of crypto native liquidity and then help that hopefully helps everybody. Or does that not really? Is that too much of an investment? Because once you have scale then actually the traditional financial firms work just fine.

Speaker A: You're 100% right. Economies of scale are very important. Um, it gives companies uh, power to, to grow their business and, and the tear competitors if you will. Um, but um, not only, not only the volume those countries by the way, but the fact that we have volume in Mexico helps us with new quarters too because they, they were moving a lot of money and they know, they know the potential amount of money that we can move to new quarters. So yeah, that's, that, that allows us to, to negotiate better deals but also to, to we discussed with folks that are maybe operating in, in Mexico we're like okay, let's do, let's look at sales in Guatemala, right. Honduras and, and a lot of them are doing that. So, so it's a thing that's going, that is definitely happening. Uh but you know there's, there's regulatory challenges. You know they have to go through those hoops. We have to go through those hoops too. So we try to go together in uh, fintech, as you may imagine, everything is about partnerships. Right? Um, so even when you say that we had to build that somebody has to build them on uh, their own, uh, that's not true. You have to rely on fintech partners, on payment processors, on off ramping providers, liquidity providers, effects providers. Again on the traditional world, um, retailers for cash payouts you have to rely on a myriad of partners. Um, and that's what we try to do when we optimize uh, or we want to find liquidity in those corridors.

Speaker B: Yeah, that makes total sense. I mean you know as we're coming to close to the end here, I mean one area that uh, that I'm actually curious about is like the WhatsApp form factor because you know WhatsApp historically has not invested into their APIs and their, you know it wasn't really, they, they started the semblance of a Developer platform. But it wasn't like um, the cash cow for the business as you know. Um, I'm curious just like the journey and maybe the roller coaster of like working with, with Meta and the WhatsApp platform because I think only in the last year or so have to like improve those APIs. But you were probably an early mover of like their API business in general.

Speaker A: 100% that. You're exactly right. Um, at the beginning was really, really challenging to say the least. Um, because yeah, we were the, we were. I'm going to venture and say that we're probably the only ones in the US really using WhatsApp, uh, as a product, not as a notification, like OTP notification, uh, type of product. Which uh, I think Brex did that a while ago where you get the OTP on WhatsApp. Ah, but it really is a product platform and we would tell this to Meta obsessively, um, for the longest time and interestingly back then, uh, Meta already, ah, they had the Novi Wallet project going on with part of the Libra project where their vision in their website back then was to actually have a flow in a stablecoin on WhatsApp. So that was kind of scary back then we were like, we were charging on um, with our idea, uh, and then that got dismantled for different reasons. Um, but it was clear actually Soccer Break made an announcement last year, big announcement, how he intended to make WhatsApp more of a platform that the results of that we're seeing now. Like you're saying last year. I would say that even more like this week, uh, as we're talking, they're launching, which you may have seen, they're launching the username, a feature that's going to be very powerful for businesses because it'll allow folks to find businesses like you would find them on Instagram or Facebook via uh, usernames. Uh, the API platform has been improving tremendously for sure as well. Um, um. And so I would say that now it's much more clear, um, that they want to make WhatsApp a platform. It's gonna, I mean I don't, I don't see their, I don't see their P L but, but if you ask me, it's gonna allow them to monetize WhatsApp much better because then business can build an experience on WhatsApp that is much more human. Um, has. You can see they've shown us these metrics that folks see. More open rates versus email, more retention on WhatsApp, uh, versus other channels. So all the Good things that actually make sense to have on WhatsApp. And they're going to monetize on that, um, um, via the API calls. Right. And so yes, it's been a, ah, strategic shift from meta from maybe a year or two years ago from now. Um, we were the early adopters of that until somebody proved me wrong. I would say we were the first in the US on leveraging WhatsApp as a platform, as a product platform and we'll uh, continue doubling down on that. Uh, our users like to win in this market. You have to be the best on WhatsApp, period. Even if you have an app, if you have other things, you have to be the best of WhatsApp. But even beyond that there's a meta point, pun intended, maybe that our uh, users appreciate that we're conversational and again we're ahead on the game there. Um, because our users, what we're finding out is our user, early adopters of conversational, they're going from the store through conversational, they're skipping apps and we are becoming uh, again the best of that. And there's a point where we say that we're financial companion because companionship means you can talk to us, we'll be here with you, send us a voice note, text us, and we'll be smart enough to understand your needs. And we're very excited about that.

Speaker C: The idea of a financial companion, there's just so much potential for it from you know, helping you do remittance to purchases, payments, sending money, savings, investment, uh, planning beyond right risk, uh, management, insurance and so on. So I uh, think you know, when I think about where AI takes us, not even just for latam, but globally as well. Uh, there is this kind of long awaited for ideal product of like the personal financial companion, a personal assistant, personal professional who can guide you along with your decisions, many of which you know are financial in our life. And we just don't really get. You don't get trained about personal, personal finance in school or university to be honest. Uh, we, everyone kind of figures this out through the friends, uh, their colleagues and various different websites. So I think it's a very big opportunity and AI is right there. And if you already have people's trust, you're in like a prime position to become that companion. So very excited to see uh, how you guys are building on WhatsApp. And I think honestly it's a big opportunity for other folks. The WhatsApp as a surface is untapped. It really is untapped. Um, so looking forward to seeing more people build there. Manuel, this has been great. Thank you for coming on the show. Where can people go to find out more about you and Felix?

Speaker A: Yes, I mean definitely I invite people. If you have to send money to your loved ones in Latin America, use Felix. You can go to Felix Pago. Com. Uh, hopefully, uh, on WhatsApp, it's enabled, our username is enabled. So maybe you can find us there on Felix on WhatsApp. And uh, you, uh, can actually download an app. Uh, you can search Felix on the app store where interesting enough, the app will take you to WhatsApp. Um, so yeah, you can find us there. And um, you can find us on Twitter Felix Pago as well. You can find me there. Manuel Goloi M. Um, so thank you Chuck and Raj. It's been uh, a pleasant conversation. I appreciate the curiosity on our business. Hopefully it's useful to your listeners.

Speaker C: Awesome. And ah, Raj, where I can folks go to find you?

Speaker B: Yeah, you can find me on X at Artbaric and then Mon X, it's

Speaker C: Chuck, XYZ and LinkedIn. Chuck Okliga. Manuel, thanks for joining us.

Speaker A: Thank you.

Speaker B: Really appreciate it.

Speaker C: Thanks so much for listening to Money Code. There was so much to take away from today's conversation. I learned a lot and I hope you did too.

Speaker B: If you enjoyed this episode, do us a favor. Share it with someone you know or give us a five star rating on Apple, Spotify or wherever you get your podcast from. Uh, until next time.