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GoCash: An ATM in your pocket soon
By Zaina Zinati, Jordan News
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AMMAN — Imagine a future where your phone can also be an
ATM. That future is not long off as GoCash,
the new Jordanian fintech start-up, is making this possible, and soon. The
start-up will enable any shop in the neighborhood to act, in essence, as a
"virtual ATM" by just using a smartphone or a point-of-sale system.اضافة اعلان
"It’s simple. Just download an app from the app store, connect with your bank account, and request the amount you want to withdraw,” Amr Barakat, founder and CEO of GoCash, told Jordan News.
GoCash Founder and CEO Amr Barakat. (Photo: Handout from Amr Barakat)
“Let's say you want to withdraw $100. (The app) does a geolocation-based search around you to find a spot — basically a retailer who has that $100 for you to go and pick it up. You walk in, you show a barcode, the merchant scans the barcode and hands you the cash, as if you just used an ATM," Barakat explained.
Barakat is not new to the start-up scene, but his product could change modern banking in the MENA region.
In 2016, while still completing his banking and finance degree at the American University of Madaba, Barakat created his first start-up: Audiogram. Audiogram led to the creation of a new company called Vasmob, which raised six figures from Zain, and became their primary outsourcing partner for their consumer-facing platform.
“At the time, I focused on revamping Zain Cash and their website eShop, as well as optimizing the efficiency of the products, especially the interfaces between the telecom firm and the consumer and that was my job for the last three years,” Barakat said.
His experience with Zain Cash is what kick-started his idea for GoCash. "I was building the product itself, so I was learning about a lot of the problems as to why the user acquisition was very low. One of the reasons users didn't want to use Zain Cash was because there were (only a) few branches to cash in and cash out (from),” Barakat said.
Barakat also knew that there were already four different mobile wallets in the market, and each one of them was creating its own merchants network, signing each merchant to an exclusive partnership. The exclusivity issue, he believes, was indirectly killing the industry.
That’s when Barakat had an epiphany, to build a unified merchants network that could be used by any financial institution and for such networks or cash agents networks to be used for mobile wallet and banking transactions.
Barakat stressed that he’s a “problem solver, and a business architect”, and looks for simple solutions to make sure users can benefit from the service in an easy way.
He said the objective is to democratize the process of cash distribution to reduce the cost of cash. GoCash has a location-based matching algorithm that connects cash user withdrawals to cash user deposits. The idea, while ambitious, proved effortless after testing.
Barakat’s algorithm knows the time of day, the average purchase amount, the type of business a merchant has, how much “cashing out” transactions are taking place, and the merchants' financial data.
All of this information combined will inform the application how many users can be sent to a particular store, and how much foot traffic the store can handle. If a user needs to withdraw JD50, the algorithm will show the nearest shop with the available funds, to create ease of access for the user.
“What we are doing is we want to make peoples’ daily lives easier. We are building a cash dispenser agents network because cash is still king in our region,” Barakat said.
Barakat found a major gap in the market, the lack of ATM access in rural and underprivileged areas. On the map, Barakat points to the areas with high population density and where there are no ATMs or merchants, adding that these are the areas they are targeting. “I don't want to target west Amman. I live here. Wherever you go, left or right, there is an ATM."
Barakat said that his application aims to facilitate ease of access to banks. He doesn’t want people in rural areas withdrawing large sums of money just to make their trip to the ATM worthwhile or to reduce transaction fee costs. “I want to create access. I want you to keep your money in your account, and if you need JD5 you use (my app), and you don't have to worry about costs and fees,” he said.
He insists that GoCash is not to be defined as a mobile wallet, instead, GoCash is considered a facilitator, a processor, and an interface. However, there have been numerous challenges in the quest to “uberize” the market.
After finishing his project with Zain, Barakat announced he had a new idea, which was enough to attract angel investors. Among them was Yousef Abu Mutawi, Zain's chief operating officer at the time, as well as family and friends, raising $300,000 to turn that idea to a reality. What he wanted to build needed regulators from the Central Bank of Jordan, which he believes is a limitation that will impede any growth.
Barakat wants to disrupt the old system and build the new, like Uber and Airbnb did, but to do that he has to work within the system. "It excites me. Because there are no rules. I'll see something, I'll understand how it works, and then I'll create my own. This is what I like,” Barakat said
He found himself attempting to penetrate the market. The first bank he approached told Barakat he would need a payment service provider (PSP) license for a mobile wallet which would require a minimum of $1 million, money he didn’t have. He searched for a work around.
“I needed to build my platform to ride on top of an existing service, and for me to become a technology partner in this infrastructure, to ensure that I will be a plug and play platform, that can scale easily to other regions and other countries,” Barakat said.
After joining an incubator called Chagelabs, Barakat was introduced to Naser Al-Saleh, the founder and CEO of MadfooatCom, an online, real-time billing and payment system. “It was the first payment processing infrastructure that was purely local and didn’t go through Visa or Mastercard. Because MadfooatCom had established banks within its network, through it GoCash could allow any bank in Jordan to access its merchants network,” he explained.
For four months they tried to integrate both networks but failed due the lack of a cash-out license. Any ATM has a license called a cash out processor, licensees include banks and payment processing networks.
Today, GoCash is still in the development phase because Jordan still doesn't have open banking. Open banking is a banking practice that allows third-party financial service providers to access consumer banking and other financial data.
A financial technology infrastructure dubbed Dapi, is building an open banking platform, Barakat said. They're unifying the APIs, or codes and protocols, of all banks. “Instead of me as a fintech provider going to each bank and connecting independently, Dapi comes to all of the banks and unifies all the APIs and I will integrate with one API that is connected to more than 40 banks,” Barakat said.
As one of the first fintech services from Jordan to integrate with the platform, this will allow GoCash to have access to 40 banks within the MENA region.
However, there is still an issue Barakat calls the “chicken and egg” problem. GoCash needs more merchants to get users, and more users to get more merchants in order to create a symbiotic equilibrium.
For merchants, Barakat’s service is free and no new hardware is required. The user can have up to three banks and two wallets on one platform that use the same unified network. He said that the commission on each transaction is at least 30 percent cheaper than a traditional service fee cost.
He found that his idea wasn’t even that new, there were already similar businesses to his in Switzerland and Singapore. “This is what we call a market validation,” he mused.
The application is equipped with anti-money laundering standards, know your customer, and know your business, which is all done through the user’s bank. GoCash is set to have an initial launch in Jordan and Dubai in early November and intends to branch out to Saudi Arabia and Egypt in the first quarter of 2022.
“All I want is to make a change in people's lives and in my own life as well, by building something that will make peoples’ lives easier and just solve a problem,” Barakat concluded.
Read more Business
"It’s simple. Just download an app from the app store, connect with your bank account, and request the amount you want to withdraw,” Amr Barakat, founder and CEO of GoCash, told Jordan News.
GoCash Founder and CEO Amr Barakat. (Photo: Handout from Amr Barakat)
“Let's say you want to withdraw $100. (The app) does a geolocation-based search around you to find a spot — basically a retailer who has that $100 for you to go and pick it up. You walk in, you show a barcode, the merchant scans the barcode and hands you the cash, as if you just used an ATM," Barakat explained.
Barakat is not new to the start-up scene, but his product could change modern banking in the MENA region.
In 2016, while still completing his banking and finance degree at the American University of Madaba, Barakat created his first start-up: Audiogram. Audiogram led to the creation of a new company called Vasmob, which raised six figures from Zain, and became their primary outsourcing partner for their consumer-facing platform.
“At the time, I focused on revamping Zain Cash and their website eShop, as well as optimizing the efficiency of the products, especially the interfaces between the telecom firm and the consumer and that was my job for the last three years,” Barakat said.
His experience with Zain Cash is what kick-started his idea for GoCash. "I was building the product itself, so I was learning about a lot of the problems as to why the user acquisition was very low. One of the reasons users didn't want to use Zain Cash was because there were (only a) few branches to cash in and cash out (from),” Barakat said.
Barakat also knew that there were already four different mobile wallets in the market, and each one of them was creating its own merchants network, signing each merchant to an exclusive partnership. The exclusivity issue, he believes, was indirectly killing the industry.
That’s when Barakat had an epiphany, to build a unified merchants network that could be used by any financial institution and for such networks or cash agents networks to be used for mobile wallet and banking transactions.
Barakat stressed that he’s a “problem solver, and a business architect”, and looks for simple solutions to make sure users can benefit from the service in an easy way.
He said the objective is to democratize the process of cash distribution to reduce the cost of cash. GoCash has a location-based matching algorithm that connects cash user withdrawals to cash user deposits. The idea, while ambitious, proved effortless after testing.
Barakat’s algorithm knows the time of day, the average purchase amount, the type of business a merchant has, how much “cashing out” transactions are taking place, and the merchants' financial data.
All of this information combined will inform the application how many users can be sent to a particular store, and how much foot traffic the store can handle. If a user needs to withdraw JD50, the algorithm will show the nearest shop with the available funds, to create ease of access for the user.
“What we are doing is we want to make peoples’ daily lives easier. We are building a cash dispenser agents network because cash is still king in our region,” Barakat said.
Barakat found a major gap in the market, the lack of ATM access in rural and underprivileged areas. On the map, Barakat points to the areas with high population density and where there are no ATMs or merchants, adding that these are the areas they are targeting. “I don't want to target west Amman. I live here. Wherever you go, left or right, there is an ATM."
Barakat said that his application aims to facilitate ease of access to banks. He doesn’t want people in rural areas withdrawing large sums of money just to make their trip to the ATM worthwhile or to reduce transaction fee costs. “I want to create access. I want you to keep your money in your account, and if you need JD5 you use (my app), and you don't have to worry about costs and fees,” he said.
He insists that GoCash is not to be defined as a mobile wallet, instead, GoCash is considered a facilitator, a processor, and an interface. However, there have been numerous challenges in the quest to “uberize” the market.
After finishing his project with Zain, Barakat announced he had a new idea, which was enough to attract angel investors. Among them was Yousef Abu Mutawi, Zain's chief operating officer at the time, as well as family and friends, raising $300,000 to turn that idea to a reality. What he wanted to build needed regulators from the Central Bank of Jordan, which he believes is a limitation that will impede any growth.
Barakat wants to disrupt the old system and build the new, like Uber and Airbnb did, but to do that he has to work within the system. "It excites me. Because there are no rules. I'll see something, I'll understand how it works, and then I'll create my own. This is what I like,” Barakat said
He found himself attempting to penetrate the market. The first bank he approached told Barakat he would need a payment service provider (PSP) license for a mobile wallet which would require a minimum of $1 million, money he didn’t have. He searched for a work around.
“I needed to build my platform to ride on top of an existing service, and for me to become a technology partner in this infrastructure, to ensure that I will be a plug and play platform, that can scale easily to other regions and other countries,” Barakat said.
After joining an incubator called Chagelabs, Barakat was introduced to Naser Al-Saleh, the founder and CEO of MadfooatCom, an online, real-time billing and payment system. “It was the first payment processing infrastructure that was purely local and didn’t go through Visa or Mastercard. Because MadfooatCom had established banks within its network, through it GoCash could allow any bank in Jordan to access its merchants network,” he explained.
For four months they tried to integrate both networks but failed due the lack of a cash-out license. Any ATM has a license called a cash out processor, licensees include banks and payment processing networks.
Today, GoCash is still in the development phase because Jordan still doesn't have open banking. Open banking is a banking practice that allows third-party financial service providers to access consumer banking and other financial data.
A financial technology infrastructure dubbed Dapi, is building an open banking platform, Barakat said. They're unifying the APIs, or codes and protocols, of all banks. “Instead of me as a fintech provider going to each bank and connecting independently, Dapi comes to all of the banks and unifies all the APIs and I will integrate with one API that is connected to more than 40 banks,” Barakat said.
As one of the first fintech services from Jordan to integrate with the platform, this will allow GoCash to have access to 40 banks within the MENA region.
However, there is still an issue Barakat calls the “chicken and egg” problem. GoCash needs more merchants to get users, and more users to get more merchants in order to create a symbiotic equilibrium.
For merchants, Barakat’s service is free and no new hardware is required. The user can have up to three banks and two wallets on one platform that use the same unified network. He said that the commission on each transaction is at least 30 percent cheaper than a traditional service fee cost.
He found that his idea wasn’t even that new, there were already similar businesses to his in Switzerland and Singapore. “This is what we call a market validation,” he mused.
The application is equipped with anti-money laundering standards, know your customer, and know your business, which is all done through the user’s bank. GoCash is set to have an initial launch in Jordan and Dubai in early November and intends to branch out to Saudi Arabia and Egypt in the first quarter of 2022.
“All I want is to make a change in people's lives and in my own life as well, by building something that will make peoples’ lives easier and just solve a problem,” Barakat concluded.
Read more Business
