Taking P2P global: how Indian startup moneyHop is transforming cross border payments

According to Wikipedia, over 30 million Indians or people of Indian origin live overseas. In 2021 this huge demographic sent upwards of $87 billion back to the motherland. The cost of these remittances, however, can be anything up to 5% of the total. That was until moneyHop came along.

Founded by Mayank Goyal, who has worked with large globally-renowned investment houses and lived the expat lifestyle in London, moneyHop is India’s first cross border neobank. Marqeta caught up with Mayank recently to find out more about moneyHop’s* journey so far and what 2022 holds for the business.**

Tell us a little bit about how moneyHop came about and the kinds of problems it solves.

I come from a town in northern India called Dehradun and wanted to work in finance from a fairly early age, so I did a degree in engineering in Bangalore and then completed a financial engineering masters at Imperial College. This gave me a launchpad into financial services in London, where I worked with a range of institutions including Merrill Lynch and Jefferies Investment Bank.

Throughout this time I was very curious about the fintech space and was interested in delivering a solution for something that was personal to me. When I came to the UK, my family had taken out a loan from a public sector bank to fund my studies. Later on I found out that I was being charged 12% to repay the loan and on top of this, each time I transferred money overseas I had to pay 5% too. It’s fair to say I was unhappy with these costs, which is why I thought there must be a better, cheaper way of doing things. Additionally, I spotted that anyone who came to visit me in London first had to go to a bank branch in India, stand in a queue, fill in a cumbersome form and pay a 3-4% FX fee to exchange rupees into pounds and transfer the funds to the UK.

This was all in stark contrast to the domestic transfer experience in India, where people can send money to another individual or merchants as long as you have their phone number. It’s called the United Payments Interface and is incredibly advanced. I wanted to apply this P2P approach to foreign transfers and that’s how the idea for moneyHop came about, which is a UK-registered company with an Indian subsidiary.

What are moneyHop’s different product offerings and who is using them?

Our core aim is to deliver a cross border banking infrastructure service that allows people to spend, send and collect conveniently across the globe. Sending money into India is relatively easy but sending money out isn’t so, because it’s a capital controlled economy and every dollar has to be reported to the central bank. So the first thing we wanted to attack was the technical problem of enabling people to send money out of the country with ease.

With moneyHop people can send money in under five minutes with near zero mark-up. The first people who were attracted to this were students. But over the course of time these students became non-resident Indians (NRIs) who naturally wanted to start sending money back home.

We then moved on to a mobile-first product based around the concept of ‘one global card, one global account’, which challenges the idea that you should have both a credit card and debit card, replacing it with a single card you can use in India and abroad. Thus the ‘Hop Card’ was born and it can be used everywhere. Its main attraction is its convenience and transparency.

What has your approach been to building your tech stack?

Tech startups essentially begin life as an experiment between one bunch of people seeking to deliver a value for another bunch of people or businesses. First you need to build out a prototype for a minimal cost and then prove that it works. The last thing we wanted was to spend a year building something and then find out that it doesn’t work.

Nowadays, as in life, everything is going modular. You don’t need to buy a bunch of servers anymore; instead we took a specialism from each modular company and personalised it to our solution. And thanks to cloud computing and solutions like AWS (Amazon Web Services) you can build a solution and get going with as little as a thousand dollars.

Has the modular approach informed how you establish partnerships with different parts of the payments ecosystem?

Most definitely. We don’t want to reinvent the wheel so we have partnered with a number of different businesses. We also have a programme manager, which is provided by the bank we work with and they direct us on things like our issuer processor. For the moment, the programme manager is delivering value and we’ll continue on that route while the costs make sense. We also have our own internal engineering team in the UK and India but partner externally on the engineering front as well.

Are there any challenges that are proving difficult to crack right now and how do you see these being overcome?

The key thing is bringing down the cost of overseas payments transfers for as many people as possible. One of the United Nations’ Sustainable Development Goals is to reduce the cost of cross border payments to less than 3% by 2030. Progress has been made but to achieve this goal we need to remove as many middlemen from the process as possible.

There are some extremely big players involved who are deeply embedded in the system. To solve this puzzle, we need to get licensed in as many parts of the world as possible, but this isn’t easy. For example, to get a banking licence in the U.S. you need to be licensed in every State. It’s going to take time.

How do you see moneyHop evolving and what’s your plan for the future of the business?

We’re very mindful that our presence in London combined with experience of Asia puts us in a strong position to become a leading platform for money flows between Western economies and emerging Asian and African economies.

So we see moneyHop expanding beyond non-resident Indians to people of all nationalities. This is going to be particularly pertinent as the world opens up again after the coronavirus pandemic. Young people will want to start exploring again and they will expect a new kind of financial transaction, born out of the switch to digital payments that has accelerated in the past two years.

We’ve also come to realise that the FX problem doesn’t just apply to individuals; it also exists for businesses. To set this in context, India is a nation of more than 50 million Micro, Small & Medium Enterprises, comprising handicraft manufacturers in Jaipur, leather goods producers in Kanpur and digital service providers in Bangalore. They know what they do well and want to sell abroad but many don’t know how to get the money home. We’re now building a product that will allow them to do this.

* Moneyhop is not a current Marqeta customer.
**The views and opinions of third parties summarized in this blog post do not necessarily reflect the views or opinions of Marqeta. Marqeta has not independently verified the information and data provided by those third parties and makes no representations as to the accuracy of such information or data.