Wind.app: Can it make international payments a breeze?

When we learned Hussain M Elius, the man behind Pathao and  'Is Tomorrow Hartal?' has launched a decentralised finance startup called Wind.app – which promises to make borderless payments a reality for everyone – we had to know more.

Wind.app, at its core, is a 'self-custody', 'smart contract' digital wallet that runs on blockchain technology and provides a host of services to streamline cross-border payments. 

Self-custody signifies that only you have possession of your digital money or other digital assets because you control the private key. Smart contract is a program stored on blockchain. 

A novel idea indeed, but where did it come from?

"Before Pathao, I was a freelancer myself. I was always making websites and I know how difficult it is to bring money into the country. There is always a problem of exchange rate fluctuations. Even if someone sends you money, you have to pay very high fees to access it."

"Swift transactions are pretty expensive, especially when you're not making a lot of money. There is a flat fee of $20-$40. And if you're making just $300-$400 from a client, that's a lot," said Elius while trying to explain how difficult it is to get money into the country.

But in recent times, some solutions like Payoneer or Wise (formerly TransferWise) have come along. So, why not use them? "They also have high fees. Moreover, they have a habit of locking out user accounts because of KYC," said Elius.

The Know Your Customer (KYC) process is performed to verify the identity of new customers and prevent illegal activities such as money laundering or fraud. KYC is undertaken as part of anti-money laundering (AML) requirements.

According to Elius, Bangladesh doesn't fall very high on the KYC list. A lot of people, including him, have had their accounts blocked for no fault of their own more than a few times when trying to earn from overseas. That was a big problem.

"So, I thought to myself, there is probably a better way of doing this, like having a wallet that is self-custodied. We can solve all of these challenges of high fees, your account getting blocked, etc," explained Elius.

That is how the idea for the Wind app was conceptualised and Elius decided that this was interesting problem to solve. The problem was fascinating enough for him to move away from Pathao, which had by that time become a local startup giant.

"Pathao continues to make new strides. But I always wanted to do something more international in scale. Pathao is a Bangladesh tech champion but there is not a lot of scope for international expansion. So, I left Pathao and almost immediately started to work on this," said Elius.

Leaving the company he co-founded and guided to massive success was not easy for him. "It was definitely difficult. I've obviously had a lot of emotional attachment to the company and the people who built it. But sometimes you need to let things go in order to grow. I felt that my growth would come from doing something new."

"I've always wanted to be a serial entrepreneur, and the point of being a serial entrepreneur is to do more things and start more than one businesss," he added.

Wind.app wants to make money as free as possible, in two steps.

Firstly, according to the team behind Wind.App right now, most people have lots of money. There is cash. They have accounts in different banks; they have accounts with MFS like Nagad and bKash. Some investors have brokerage accounts and others have treasury bond accounts. Others have savings certificates. The list goes on.

"So, the assets that you have are really very fragmented and we wanted to bring all the features of, whether it's a bank, investment, or savings, everything under one roof," said Elius.

Moreover, "We want to make sure that even when you're travelling, you can use the same Wind account in multiple currencies and multiple places. That is why we chose the name Wind—we want it to be as free as the wind." 

When it comes to features, the Wind.app gives its users the ability to open up a sort of virtual bank account through which they can receive money from anywhere. 

They also allow users to cash out in their local currencies. So, the number one basic feature is: cash in, cash out, but internationally.

Secondly, Wind users earn interest on their savings up to 7-8% on their US dollar balance. This facility is drawing a lot of attention, and that has been the app's go-to marketing strategy.

There is a third feature they want to introduce later on: a debit card through which one can also use their Wind balance to make payments in the real world.

At the moment, Wind has a small of team of 25 people spread across the globe. They have employees in the Philippines, Singapore, Dubai and the United States, with offices in Singapore and the UAE. 

"We have a very diverse team. Wind.app wants to be a global company and that's why we need a global workforce," explained Elius.

Wind is based in Singapore and is not yet available here as Bangladesh does not allow crypto-based transactions. However, they have assured that they plan to launch their operations here soon.

The decision to base themselves in Singapore was taken after considering things like regulation and funding. "If I ask a Singaporean investor to invest in a Bangladeshi company, it becomes a rather tricky proposition for them as they are not familiar with Bangladeshi laws. And some of our laws are not easy to deal with. So, it's easier to have a holding company outside Bangladesh." 

The bureaucratic red tape came up as another reason behind why we are not seeing more tech startups in Bangladesh during our discussion. 

"If you're working in field tech, you need to be licensed. And to be licenced, there is no fast path in Bangladesh. For Pathao, it took us many years to get our PSP license whereas Wind.app is licenced in Europe and in Dubai and that took us only a couple of months," said Elius.

"So, it is easier to start over there. From both a time and cost perspective," he added.

Within a short few months of going live, Wind.app has facilitated over $3 million in annualised gross transaction volume (GTV). Renowned investors like Global Founders Capital and Spartan Group have placed their bets on Wind.app, which has raised $3.8 million in pre-seed funding.

But they have had to grapple with some challenges to get this far. Setting up the infrastructure was complicated as they're working with multiple different currencies; separate compliance guidelines for different countries is also a big challenge.

"Because when you're working in finance, you have to really worry about KYC, AML, sanctioned countries and sanctioned individuals," explained Elius, adding, "Another big challenge is liquidity. How do you send money as cheaply as possible? Getting partnerships done with banks or payment aggregators takes up a lot of time." 

One way they have tackled such challenges is by harnessing the power of decentralised finance (often stylised as DeFi). Decentralised finance offers financial instruments without relying on intermediaries such as brokerages, exchanges or banks by using smart contracts on a blockchain, mainly Ethereum.

Elius believes that decentralised finance allows you to give more people the option of participating in the financial system.

"It has its own set of pros and cons. But I like the fact that we can offer our users 7-8% interest on their US dollar balance. We can offer this to any user, anywhere in the world. That is not possible in a traditional finance model where you need to be regulated on a country-by-country basis," said the Wind.app founder and CEO.

So, where will the wind carry him? Perhaps to new frontiers and new market segments.

Elius thinks that ultimately, domestic payments are sort of a solved problem in a lot of ways. "It's a solved problem, and it's very low cost whereas international payments are not; it is extremely fragmented. There are a lot of different currencies, a lot of different banks. There are a lot of different methods of payment. Our FX rate fluctuates on an hourly basis," he explained.

Indeed, there are problems that need to be solved, and Elius believes those who will be able to solve these problems will add a lot of value, especially for people who are earning abroad.

Their primary focus at the moment is the freelancer segment of the market, which is a major receiving market. But there are a lot more types of potential users. 

"In Bangladesh, the migrant worker population sends more money into the country than freelancers receive. They lead by a factor of 10. So, there are other segments of the market that we can go to after we have figured out the infrastructure and how to send and receive money as cheaply as possible," said Elius.