Problem

Currently, there is no way for online businesses to accept online payment in Ethiopia. Despite businesses providing their services online, they all have to find a way of accepting money.

Eg 1: Sports betting companies only operate through physical stores due to lack of online payment options. They can only accept payment over the counter.

Eg 2: Ride hailing drivers have to physically/over the counter buy “Ride Miles” from Ride hailing companies before the driver can make a trip. Online payment would solve this challenge.

This issue has made it difficult for companies to operate online and has slowed down the development of the online economy in Ethiopia.

Solution

Windpay connects businesses and individuals through its super app and facilitates payment between the two. Windpay is aiming to be the Alipay of Africa.

How does it work/ customer experience?

As mentioned above our customer segment is divided into two: Online businesses and Individuals.

• Online businesses: We partner with online businesses such as telcos, ride hailing, food delivery and sports betting companies in order to host their app on Windpay in the form of a mini-apps which enables them to provide their services and accept payment online.

• Individuals: Individual users first download, sign up and register to Windpay. Once registered, they will be able to find the various services that Windpay hosts such as ride hailing, sports betting and food delivery. After using these services, individuals can make payment instantly. In addition, they can send/pay money to any Windpay users.

How and why we used Stellar

We are going to issue a stablecoin that is tethered to the Ethiopian national currency Ethiopian “Birr” and maintain the equivalent fiat reserve with our partner bank (in progress). Our plan to enable our customers to recharge and withdraw (on off-ramp) is through the following methods:

• Mobile banking:  Windpay will host mobile banking apps within the Super app so that our customers can easily recharge or withdraw Ethiopian Birr (Stablecoin).
• Agents: Windpay agents are individuals that earn commission by helping our customers recharge or withdraw Ethiopian Birr (Stablecoin).

The reason we used Stellar:

1. We needed affordable, secure and fast transactions
2. Allows our app to hold multiple currencies
3. Simple and fast to integrate
4. Future innovation opportunities. It fits our future goal of introducing cryptocurrency purchase, storage, currency exchange and more.

We’ve been working on Windpay since 2019 following a number of pivots and forging new partnerships.

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Stage: We are on track to complete the Beta version by the end of December and start piloting in early January.

We have roughly 30 ride-hailing drivers ready to pilot our superapp in our January launch. 

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Funding: We have raised a total of $45K. A pre-seed of 40K from investors and a $5k grant  from Stellar through DFS Lab bootcamp,

We incorporated in the USA and we are currently finalising our incorporation in Ethiopia.

Our ultimate goal is to be able to host millions of businesses in Windpay, to help them provide services and accept payment online. We are starting one business at a time. For that reason, we decided to do our pilot program on the ride hailing sector that desperately needs alternative online payment solutions. The Problem we identified in this sector is below:

PROBLEM & SOLUTION

Context: Ride Hailing is a thriving industry in Ethiopia, but drivers and ride hailing companies are losing time, money and users to poor payment methods.

Problem: Ride Hailing drivers have to purchase “Ride Miles” from Ride Hailing Companies to start accepting clients through the Drivers App. To buy Ride Miles, Drivers must deposit money to the Ride Hailing Company Bank account, send proof of payment, and wait from 2- 9 hours to receive “Ride Miles” on the Drivers App. They cannot take on clients through the app until they have received the “Ride Miles” so drivers and the Ride hailing companies lose time and money.

Pain Point: Slow and time consuming payment process meaning fewer clients

Solution: We will support ride hailing drivers and companies by:

1. Allowing drivers to add money to windpay app and buy “Ride Miles” instantly

2. Offering BNPL option to enable drivers to buy “Ride Miles” on credit

Drivers can also access additional payment features like Airtime Top and Sending Money to other Windpay users.

How do you use Stellar in your solution?

We are going to issue a stablecoin that is tethered to the Ethiopian national currency Ethiopian “Birr” and maintain the equivalent fiat reserve with our partner bank (in progress). Our plan to enable our customers to recharge and withdraw (on off-ramp) is through the following methods:

1. Mobile banking:  Windpay will host mobile banking apps within the Super app so that our customers can easily recharge or withdraw Ethiopian Birr (Stablecoin).
2. Agents: Windpay agents are individuals that earn commission by helping our customers recharge or withdraw Ethiopian Birr (Stablecoin).
   

TARGET MARKET

Our initial customers will be the Ride Hailing Drivers

• Pain Points: Losing money
• Needs: Better payment options, buying on credit =
• Wants: Side Hustles
• How to reach them: Telegram, Door-to-door
• Age: Licensed age 18-45
• Gender: Typically Male but occasionally female
• Characteristics: Vehicle Owners, Smartphone Owners, multi-company drivers
• Language: Amharic, English

Ride Hailing Companies are beneficiaries of our service

• Pain Points: Losing money, losing drivers, less customers
• Needs: Better payment options, Driver retention and more drivers, more customers better payment options,
• Wants: More Profit, more drivers, more customers, time efficient recharge methods for drivers
• Platforms: Ride Hailing Apps, Banks
• Age: SMEs
• Characteristics: Fast Growing
• Company Size: Large and SME

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REVENUE MODEL

1. 1% fixed transaction fee for P2P
2. We charge online companies 2% + $0.021 for every payment accepted
3. Fixed subscription fee for BNPL

    Note: We are making things freemium for the piloting program.

PRICING STRATEGY

1. 1% fixed transaction fee for P2P - Our competitors are charging fees according to the amount of money transacted making it challenging for consumers to understand the cost of transactions. We wanted to leverage a simple pricing strategy so customers always know how much transactions cost because affordability is a priority.
2. We charge online companies 2% + $0.021 for every payment accepted: Our pricing was based on considering competitor price points- our competitors charge 50% more for online businesses generally to accept payment online and have subject charges based on industry
3. Fixed subscription fee for BNPL:  More profitable for us to utilise fixed subscription, and interest is an unknown concept amongst our individual user demographic so they are likely to be more comfortable with a fixed subscription to access this feature.

Our piloting program will be freemium.

SALES FORECAST

Predicted Transaction Volume: the potential transaction volume of the ride-hailing sector. Currently, there are around +100K Ride hailing drivers each buying Ride Miles of $85 per month on average. There is a potential of transacting $8.5 million per month. We are confident that the majority of drivers will use our app because the incumbent process consumes the time and energy of the drivers.

FINANCIAL PLAN

For 12 months our costs are as follows:

Cost Break Down in USD

Total Capital (Pre-seed): $40,000

Allocation Pilot Programme: $16,000

Other Costs: $24,000

Capital cost: $19,628.00

Fixed Cost: $17,102

Variable Cost: $3,612.00

Total: $40,342.00

Deficit: $342

Profit: $0

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INDUSTRY AND MARKET RESEARCH

1. In-person Survey of 32 Drivers showed demand for faster and simpler digital methods of recharging Ride Miles.
2. Number of ride-hailing companies: +38 (only 6 operating visibly)
3. Number of drivers: +100K

THREATS AND OPPORTUNITIES

Strengths:

Product versatility, the app can be adjusted to offer multiple services, Ability to host millions of apps (online businesses)

Weakness:

Access to human capital, funding

Opportunities:

1. Untapped market with Africa’s second biggest population and youth population at +118 Million people, Ethiopia has become a very attractive market for payment solutions.
2. First movers in the space
3. Providing other financial services (micro loan, micro-insurance, saving)  that promote financial inclusion

Threats:

Political instability

COMPETITION

Competition is growing due to the size of the opportunity in Ethiopia: key competitors currently are Telebirr that just started operations a few months ago and M-pesa (Billion dollar company) that will start operation next year.  

MARKETING AND  SALES

Target Market: Ride Hailing Drivers

Ride-hailing drivers typically don’t use email, they do have smartphones and use Telegram Messenger and groups to communicate.

Marketing strategy: Door-to-Door & Referral Incentives. We will have to speak directly to many drivers to onboard them and get them ready to use the app. We will also utilise a referral incentive strategy e.g. gaining free Ride Miles for every driver who signs up.

Digital Strategy: We will leverage Telegram Messenger Marketing Campaigns to communicate to the various drivers  through their support and communications groups. We can broadcast messaging to up to 500K people in a matter of minutes with Telegram at no cost.

Our goal for the pilot is quite small at maximum 100 users  in 6 months so we are confident that these two approaches will assure us success and allow us to engage with customers and gain more learnings about improving the app. Once we have the customer database, we can communicate updates, changes and additions to the app and as we onboard more services it will allow us to retain customers beyond their needs as ride hailing drivers.

Social Media: https://twitter.com/SmilePay_App