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Boom Financial, formerly m-Via, raises $17M for cross-border payments

Ryan Kim — Wed, 18 Jul 2012 10:00:58 +0000

M-Via’s Boom service debuted last year with the ambitious goal of restructuring the way people send money to their home countries via mobile phones. M-Via is now getting a big endorsement from mobile operator Digicel Group, which is leading a $17 million round in the newly renamed Boom Financial.

The new funding, which includes participation from existing investors RRE Ventures and Matt.org, will help Boom scale up and try to fulfill its goal of being the primary banking brand for unbanked consumers and immigrants remitting cash overseas. Boom has now raised more than $30 million to date. The support of Digicel will provide a big boost, not just for the cash infusion but for the strategic support Digicel can provide. Digicel is the largest carrier and one of the most trusted brands in many Caribbean countries including Jamaica and Haiti, two of Boom’s markets.

Boom provides a mobile-based alternative to traditional wire payments. Users who sign-up for a $25 yearly account pay $2 every time they make a deposit but pay nothing for individual transfers. That’s in contrast to other services, which can charge by the amount of each transfer. Users can load money into their account from 15,000 of locations, including 7-Eleven stores and they authorize payments from their cell phone. Recipients can pick up cash from more than 100,000 ATMs worldwide using a Boom debit card.

Digicel said its customers in the Caribbean and Central America already receive more than $5 billion a year in cash remittances from the U.S. Now, Digicel’s airtime agents will soon be able to sell Boom services in the future and help the carrier participate in those payments. Boom can also use Digicel’s help in expanding to new markets. It currently operates in the U.S., Mexico, the Dominican Republic along with Jamaica and Haiti. But it’s looking at expanding to more countries in the Americas.

Boom will use some of the money to build up its U.S. sales teams and is preparing to open up Boom stores in big immigrant communities like east LA and Oakland. The goal, said CEO Bill Barhydt, is to educate users about the benefits of using Boom as a low cost banking resource. He said it’s not just for overseas remittances. Domestic users in the U.S. who don’t have traditional bank accounts are saving a lot of money by transferring funds via Boom. And users overall are able to transfer a lot more frequently because they’re not being charged for each transfer.

Boom isn’t sharing specific metrics so far. But it’s funding momentum suggests there’s a lot of optimism in financial services that target the unbanked and immigrants. Western Union is also trying to keep up with the times and rolling out new digital payment services such as WU Pay. While many people don’t think too often about cash remittances, it’s a huge market with half a trillion dollars transferred each year.

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Boom launches mobile money transfers for unbanked

Ryan Kim — Tue, 15 Nov 2011 14:00:27 +0000

Boom, the mobile personal payment and banking service announced in May at Hillary Clinton’s Diaspora Forum, is now open, bringing a low-cost mobile alternative to cash remittance services. The service, which targets unbanked workers who often send money home, is launching in the U.S., Mexico, Dominican Republic, Jamaica and Haiti, where remittances can average about 20 percent of GDP across those countries.

Instead of cash wire services which can charge up to $15 to transfer money, Boom allows people to establish a bank account for $10 annually and then charges them $2 dollars each time they deposit money. After that, transferring money between accounts is free with transfers enabled by text message or with a phone call to a Boom operator. Users in the U.S. can load money at 15,000 locations including more than 6,000 7-Eleven stores. And users can pull out money from 150,000 ATMs in the U.S. and Mexico or 650,000 ATMs worldwide using a Boom debit card. There are also 23,000 merchant locations in Mexico where users can pull out money.

The service serves as a bank and mobile personal payment alternative for many migrant workers. But it can also serve as a way for parents to distribute money to their children. Bill Barhydt, CEO of m-Via, which created Boom, said almost half a trillion dollars is remitted each year internationally with fees generating $40-50 billion. He said m-via is trying to crunch down those fees, making it easier for people to distribute a lot more money more often.

“Our goal is to crunch those fees down to a 3-4 percent range rather than the 8-11 percent and provide more banking service so it’s better for consumers, safe, easier and more economical,” Barhydt told me.

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Boom Brings Mobile Personal Payments to Unbanked

Ryan Kim — Tue, 17 May 2011 15:30:32 +0000

After tinkering with its mobile remittance service for a couple of years, startup m-Via is launching the service under the brand name Boom, with the promise of making transferring money between unbanked users cheap and easy. The service, which is debuting at Secretary of State Hillary Clinton’s Global Diaspora Forum on Tuesday, aims to undercut existing wire transfer services such as Western Union with a solution tailor-made for mobile.

The system works somewhat like PayPal, but for unbanked migrants looking to send money to people in the U.S. and in their home countries. Users open a Boom account for $10 annually, then add cash to their accounts at 15,000 locations in the U.S., including more than 6,000 7-Eleven locations. Each deposit costs $2, but transferring money between Boom accounts is free. So a user in Mexico (the service is launching in Mexico, with Haiti following soon) opens a Boom account and pays $2 to pull out money from their account after receiving a money transfer from the U.S.. Recipients can use a debit card to withdraw money from an ATM, or get cash from 25,000 locations in Mexico.

Boom is designed to lower the cost of transferring money, especially to multiple people, which is often how users like to send it. Services like Western Union can add fees of $15 on average per transaction, said Peter Kelly, m-Via’s VP of business development. The service is also meant to work for the 80 percent of people in the world who don’t hold a bank account, but who carry mobile phones. Users can add cash to their account at participating locations and get confirmation through their cell phones. They can then transfer money to other Boom members by text message, or via phone call to a Boom operator.

“Our goal is to provide financial inclusion for the 80 percent of people who are unbanked,” said Kelly. “We want to make it easy for these people to share their wealth.”

We’ve seen more personal payment offerings recently from Square, Visa and American Express’ Serve . But those work primarily for people with bank accounts and debit or credit cards. But we’re starting to see more companies looking at the sizable opportunity in the cash market. Boom said there are $25 billion in remittances made between the U.S. and Mexico each year. PayNearMe, (see full disclosure below) another start-up, is also looking in this direction, and recently expanded its offerings for unbanked consumers. Boom leverages PayNearMe’s integration in 7-Eleven’s point of sale system to offer its own services.

Kelly said Boom, which has been testing over the last year in the greater Los Angeles area, can serve as a bank account for consumers who have never opened one. As users see it’s safe, it will inspire them to keep more money in their accounts. He said in addition to Haiti, Boom is looking to expand next to the Philippines and Latin America. I think Sunnyvale Calif.-based m-Via, which is backed by RRE Ventures, has a good head start on this market, and is smart to work with 7-Eleven to make cash remittances easier. There hasn’t been a lot of innovation in this space, but now with PayNearMe and Boom, we’re starting to see Silicon Valley take on this overlooked opportunity.

Disclosure: PayNearMe is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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