In 2023, Africa received $100 billion in remittances, equivalent to nearly 6% of the continent’s Gross Domestic Product (GDP). While the remittance industry has attracted founders focused on making transfers faster and cheaper, Amegbor noted that what happens after the money arrives has received less attention. He founded PayAngel in 2013 around that premise. 

Instead of simply helping users send money home, the company lets them pay verified schools, hospitals, insurers, contractors and other institutions directly. So, instead of sending money to a family member to pay university fees, PayAngel enables users to pay the university directly, betting that the evolution of remittances lies in ensuring money achieves the outcome for which it was intended.

How PayAngel works

PayAngel’s core product, Direct-to-Merchant Remittances (D2MR), flips the arrangement of traditional remittances. Rather than a user sending money to a person and trusting them to pay a bill on their behalf, the user can pay the bill directly. 

On the app, the sender selects from a list of onboarded institutions, including hospitals, schools, insurers, or retailers. Each organisation issues its own reference system for identifying who a payment belongs to, including a student ID or a hospital ID. According to Amegbor, when the sender makes a payment, the institution receives it without needing a person in the middle who has to be trusted to forward it.

The company built RemitCare on top of that same rail. According to Amegbor, any sender who transfers at least £100 in a month automatically qualifies their beneficiary for free life and hospitalisation cover that rolls over on a 30-day basis as long as qualifying transfers continue. Its third product, PayAngel Business, lets African SMEs and large organisations collect payments from diaspora customers directly, with everything reconciled in one place.

Building a cross-border infrastructure

PayAngel’s early infrastructure was Amegbor’s younger brother. When transactions came in, his brother would position himself near a bank, withdraw the money and go around paying each institution one by one.

“I’m not sure how we did it actually, because it sounds almost ridiculous right now,” Amegbor said. “But yes, it was that scrappy.”

It was the workaround that made sense then because getting the company off the ground had been difficult. Amegbor had a digital remittance idea at a time when banks were still convinced the cash model was what customers wanted. He explained that in PayAngel’s early days, he spent time hearing banks dismiss the idea. 

“Most of them just laughed,” he said. “They said, ‘You think you can break what Western Union has been doing for so long? People want to hand their cash to someone and know it’s going to be received on the other end; and you’re proposing a digital solution, in 2012? That’s not going to work.'”

He noted that PayAngel signed its first disbursement agreements and began operating through tokens because banks did not grant direct access to their platforms. The tokens created another problem, as recipients would arrive at an agent to collect their payment and be told there was no cash on hand. So the company went back to the drawing board.

“We needed to quickly find another solution,” Amegbor said. That was when his brother became part of the infrastructure. The manual process gave PayAngel a way to keep moving while the company figured out what a more permanent system should look like.

When PayAngel eventually connected with a bank, the money could move, but the data trailing them made no sense. Payment references could disappear from bank statements, making it difficult for businesses to tell who had paid them and what the payment was for because every bank formatted its transaction data differently. Solving remittances, Amegbor had come to understand, meant building infrastructure on both sides of the transaction.

“We realised that focusing on the send side was the problem,” Amegbor said. “We needed a solution on the receive side as well, to onboard the businesses directly and give them a platform that actually lets them receive the money and know who it belongs to.”

Instead of trying to force an existing remittance system to work for businesses, PayAngel began creating a platform that would onboard businesses and enable them to receive money from users in the diaspora.

PayAngel launched its minimum viable product (MVP) of direct-to-merchant remittances in 2022, roughly a decade after the idea first took shape.

The business behind the bet

For all the years it took to realise PayAngel’s direct-to-merchant remittances would work, the platform generates revenue from foreign exchange spreads, like many remittance companies. It earns an FX margin on the money moving through its platform and charges fees for collecting payments for businesses through PayAngel Business.

The startup competes with traditional remittance operators, including Western Union and MoneyGram, as well as newer digital players such as LemFi, NALA, and Sendwave. What Amegbor argued sets PayAngel apart is in the layer above transfers. 

“We are driving accountability and trust within the ecosystem,” he said, explaining that PayAngel sees an opportunity in payments that are too specific for other channels.

“When you think about payments to businesses and recurring small bills, that is where we believe is the blue ocean,” he added.

According to Amegbor, the business has also grown beyond the early experiments that involved tokens and Amegbor’s brother carrying cash between banks. PayAngel said it has processed more than $450 million in transactions and has more than 100,000 active remitters. The company says it now serves customers across 22 countries on four continents, with an annualised revenue run rate of about $4 million.

That growth has meant building a regulatory footprint across the markets where PayAngel operates. Amegbor noted that the company holds regulatory approval in the United Kingdom, the United States, Canada, Australia, and Ghana. It has also partnered with Visa to help it connect to new markets and move money across existing ones more seamlessly, according to Amegbor.

Where Amegbor takes the company next is towards building deeper roots. He explained his intention to consolidate PayAngel’s presence in some African markets, including Nigeria, Kenya, South Africa and Uganda, before expanding further. The African side, he said, is the heavy lifting that has to be done properly because building the local infrastructure takes time.

Amegbor described PayAngel’s long-term ambition as building a closed-loop system that lets individuals and businesses move money between the Global North and the Global South as straightforwardly as moving it within a country.

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