Like most of the 51 million1 Hispanics in the U.S., Epifanio Cruz regularly sends money to loved ones in Latin America using Western Union. Epifanio is not alone, according to Columbia University over 60% of Hispanic adults transfer money to family abroad, also called remittances. However, the process is a pain: You pay extortionate fees, wait on long lines, and are responsible for notifying the recipients.
A new company called Regalii plans to heal that pain. The company plans to offer a free and instant mobile-money transfers via Regalii.com. Free? Instant? Both could completely revolutionize remittances. Rather than sending cash, Regalii allows you to send e-gift cards for supermarkets and stores in Latin America. Now when Epifanio sends money for groceries to his aunt Maria in Santo Domingo, he can go to Regalii.com, select recipient, choose the store, and then Maria receives a text message with an electronic code, which can be redeemed at the selected supermarket in Santo Domingo. It works just like a coupon. Regalii integrates Facebook profiles, so you can even choose the gift recipient and invite other friends or family members to chip in for the cost of the gift.
Edrizio De La Cruz, a recent MBA graduate from The Wharton School of Business at the University of Pennsylvania, founded Regalii and leads the UPenn team working on it. For Edrizio, It’s a personal mission. “I grew up in the Dominican Republic,” Says Edrizio, “and immigrated to New York’s Washington Heights neighborhood, which was probably 110 percent Dominican. But I went to high school in Queens, where I used to play basketball with Mexicans, Puerto Ricans, Colombians and Salvadorians. I quickly assimilated to each subculture. But my social circle was pretty homogeneous. Almost everyone around me was an immigrant. So I assumed that only immigrants sent money or remained connected to family in Latin America.”
While at Wharton, Edrizio realized that wasn’t the case. He said: “At UPenn, I must have met over 100 Latinos, in every shape and form. Some immigrants, some native. From affluent backgrounds and very humble backgrounds. No matter what, the majority remained connected to their culture and family in Latin America.” In talking to other Latinos, Edrizio noticed how frustrating, archaic and anti-social sending money abroad is. “Its like going to the DMV to pay alimony. You wait on long lines and don’t really look forward to it”. That frustration kindled the fire that sparked Regalii.
“What we’re discovering,” De La Cruz said, “is that people want a more intimate way to remain connected to family abroad online. Sending money and calling are activities usually done offline at the thousands of money transfer franchises. At Regalii we want to take those activities online, and make them free and social.”
The addressable market is enormous. Hispanics are the fastest growing minority population1 in the U.S. (51 million) and Spain3 (2 million). By 2015, Hispanics’ purchasing power in the U.S. is expected to reach $1.5 trillion4, a 50 percent growth from 2010. By 2012, remittances are expected to grow to $69 billion5.
Regalii has much larger ambitions than just to be the next hot tech start-up, though. Said Edrizio: “Our goal is to empower and enhance how Latinos in the U.S. and Spain interact socially and economically with family in Latin America. Ultimately, we want to be an economic bridge between nations that can uplift communities.”
