The Mint Corporation (CVE:MINT) Financial Platform for Unbanked Adds 100,000 New Customers
The Mint Corporation (CVE:MIT) (OTCMKTS:MITJF) Executive Director Vikas Ranjan provides an introduction to the company and explains how Mint provides financial services to the unbanked. Mint is a fintech platform that provides payroll and banking services to the underbanked in the United Arab Emirates. With 5 million unbanked workers in Dubai alone, Mint solves an important problem for companies that are prohibited by law from paying employees in cash. Mint provides a high level of banking services through its payroll card and mobile app. Ranjan notes that once the company secures a customer through its payroll operations, Mint can offer them different attractions and value added services such as bill payment and money transfers through its mobile app. Mint recently announced it had gained another 100,000 customers on its platform to bring its total number to over 600,000 customers. With more than 2 billion people who are unbanked globally, Mint envisions its platform as a plug-and-play technology suitable for expansion to other regions.
Ed Milewski: Hello, everyone. Welcome to Midas Letter Live. I’m Ed Milewski. Today we have with us Vikas Ranjan. Vikas has done a number of things in the financial world; he’s a founder of Gravitas Financial, and Gravitas Financial is the largest shareholder of a company called Mint Corporation.
Vikas Ranjan: That’s right.
[stock_chart symbol=”MIT:TSV” align=”left” range=”1M”]
Ed Milewski: Now when I think of mint, I think of money-printing.
Vikas Ranjan: [laughter]
Ed Milewski: And if you’ve got a money-printing machine, I want to know about it. No, all kidding aside, Gravitas is the largest shareholder, you’re also an executive director –
Vikas Ranjan: That’s correct.
Ed Milewski: Of Mint, and you’ve been involved with Mint for about four years.
Vikas Ranjan: Just over four years, yeah.
Ed Milewski: And you told me quite a bit about it a couple of years ago, and I’ve been watching it, because I thought it was a great – so, what, tell us, in general terms, tell us about Mint. What do you do?
Vikas Ranjan: Sure. First of all, thank you for the opportunity to talk to you about Mint; we have known each other for a long time, and I am very excited to be on the show and talk about Mint.
Ed Milewski: Thank you.
Vikas Ranjan: So Mint is a Canadian company listed on the Toronto Stock Exchange Venture Exchange.
Ed Milewski: MIT is the ticker.
Vikas Ranjan: MIR the ticker. Has been a public company for a long time, now.
Ed Milewski: A lot longer than four years, right?
Vikas Ranjan: a lot longer than four years, yes. It had different lives, I would say. Gravitas got involved in 2014 as in an investor, and we also brought in other investors and very quickly at that time we realized the potential, but we also found the company was, you know, having troubles at that time. So we had to really step in, in a big way, and restructure the company, and we became the largest shareholder. And these last four years we have been building this company in partnership with our local partner, in Dubai.
So Mint today –
Ed Milewski: Dubai is one of the Emirates?
Vikas Ranjan: Yes, part of United Arab Emirates, which has, I believe, seven Emirates.
Ed Milewski: Obviously a financial centre in its own right.
Vikas Ranjan: Yes, absolutely. And Dubai is a very diversified economy. It’s a city-state, probably about 5 million population I believe. United Arab Emirates is a pretty unique country; has about 10 million population, but most people are expats in the country. What does that mean? That they come from different places. Only 1 million are Emiratis; 9 million are probably from different countries, and half of those, or approximately 5 million of those people, are blue collar workers. Migrant workers.
Ed Milewski: Okay. And would they come from somewhere like Africa or something like that?
Vikas Ranjan: No, predominantly they come from Indian subcontinent, so India, Pakistan, Bangladesh, Nepal, Philippines also, and all the shiny buildings and all the things that you see –
Ed Milewski: So, does Dubai pay for their transportation and everything? Do they –
Vikas Ranjan: The employers who employ them. These are the workers who built the city of Dubai, and for that matter, a lot of places within UAE. They come on long-term basis, and work visas, and they live in Dubai and other places, and in most cases they are unbanked migrant workers.
E.M: So they don’t have a bank.
V.R. No, they don’t have a bank.
Ed Milewski: Hard to comprehend that in our world.
Vikas Ranjan: Absolutely. You know in Canada, everybody has a bank account, and you know, so you take that for granted, right?
Ed Milewski: So you say there’s probably two million – a couple billion people that are really underbanked?
Vikas Ranjan: More than 2 billion people on the planet are underbanked, and there’s a huge opportunity to service them, to bring them into the financial circle.
Ed Milewski: And this is where Mint comes in.
Vikas Ranjan: Hundred percent. So Mint is a company which has designed a system – first of all Mint, if had to describe Mint, it’s a globally certified mobile payments company. That’s the underpinning of this company. And now they have attached a very versatile, robust, mobile digital banking-type system, almost like, you know, a bank-type system. Now, Mint is not a bank, so I want to qualify that.
Ed Milewski: Yeah. It’s not a bank. I’s a fintech.
Vikas Ranjan: But Mint application, Mint app, has been launched, which basically, you know, enables Mint to offer value added services to our underbanked people.
But everything starts with Mint providing what we call the core service, and which is a payroll service, a cashless way to pay these migrant workers who do not have bank accounts. How do you do that? So you have to have a system to pay them, and Mint, you know –
Ed Milewski: So they have a bank account right on their phone, basically?
Vikas Ranjan: Phone, or a physical card, just like you have a bank card.
Ed Milewski: You have all those cards, right?
Vikas Ranjan: Actually, we have the cards we issue, effectively become the salary card, payroll card, for these employees. They are either Mastercard or card issued by Union Pay. So you know they are acceptable wherever those companies are functioning.
Ed Milewski: Right.
Vikas Ranjan: So, what happens is that, you know, a Mint will go and, you know, get an employer, let’s say the employer has 10,000 employees, and Mint will get the contract and account, then Mint will provide the payroll service. So every month at month-end, the employer will send one wire to Mint’s escrow account for entire salary of 10,000, and then Mint will do the calculation and Mint will load these cards.
So everybody, every migrant worker of this employer company will get a mint card, the payroll card.
And now, the next phase of Mint is really to enhance the functionality of this card as well as offer that on a mobile device.
Ed Milewski: Now I understand you, about a couple of months ago, you had about 400,000 users.
Vikas Ranjan: Yes.
Ed Milewski: And you’ve added to that – in fact you made an announcement today, didn’t you?
Vikas Ranjan: Oh, yes! Today is a good day for Mint. We just announced an additional 100,000 cards on the platform; it’s a major customer win for Mint. It’s one of the major financial institutions which was providing payroll services to more than 100,000 migrant workers, and they have agreed to move to Mint’s platform.
Ed Milewski: So you are now up to about 600,000?
Vikas Ranjan: Just over 600,000.
Ed Milewski: And they’re paying you…
Vikas Ranjan: About 10 – so the business model, if you may, how does Mint make money? First of all, Mint solves a very important business problem for these employers. By law, they are mandated not to pay cash as salary. So, Mint provides that under the regulations.
Ed Milewski: So they can’t pay cash to these people?
Vikas Ranjan: No, they have to pay in a non-cash way, but hey don’t have bank accounts. So they need a service like this. So Mint provides them this cashless solution, so Mint offers this payroll service to employers, and employers typically pay around $10 per card for the year for the fee.
Ed Milewski: So, 10 times 6, you’re talking $600 million, roughly.
Vikas Ranjan: Yeah, exactly.
Ed Milewski: But very scalable.
Vikas Ranjan: Very scalable.
Ed Milewski: Like we’re at the very first inning of the baseball game
Vikas Ranjan: Very, very first inning, you know, I would say the bottom inning of the baseball game. You know? So what is the game, effectively? Now, when Gravitas invested in this company, it wasn’t the payroll itself which was the attraction, right? From Day One we knew that once you have the payroll, then you can offer all sorts of services, and that holds attraction. So when we took over and we looked at the platform, it wasn’t ready. So we invested heavily in building this, you know, technology platform in collaboration with our local partner. And over the last four years, five years, approximately $40 million, $50 million has been invested in building the whole ecosystem.
Ed Milewski: And that’s basically your, Gravtias’, involvement, $40 million to $50 million? So you’ve put your money where your mouth is.
Vikas Ranjan: Yes. A big portion of that; I wouldn’t say that all that money was Gravitas’ investment. We also brought some institutional investors, you know, mainly at that time they came as debt investors –
Ed Milewski: But they converted.
Vikas Ranjan: Converted recently into equity augment, a big part, anyways. So now that we have built the technology stack, now that we have built this mobile-based platform, we will be able to offer all sorts of value-added services to these migrant workers. Just imagine the power in the palm of their hands, right? It’s like you can use this mobile device and do lots of things.
Ed Milewski: You can buy tickets, you can do anything, right?
Vikas Ranjan: Yeah, yeah, you know, starting with loans –
Ed Milewski: So they don’t need a bank account, really.
Vikas Ranjan: They don’t need a bank account! You know, effectively –
Ed Milewski: So what does that say for all that other bank – maybe I should get rid of my bank account. There’s nothing in it anyway except overdraft.
Vikas Ranjan: [laughter] So this segment of the population is not catered by banks anyways; you know, banks will not open bank accounts for migrant workers who –
Ed Milewski: Right, right, right, right.
Vikas Ranjan: -earn income below a certain threshold. So banks are not interested anyways. What we are doing is giving them very high-end banking-type service platform using the mobile device. So you know, now that you have your Mint app loaded on your mobile phone, using that app, you can find an ATM, you can check your balances, so you know, the salary which we are loading on your card, Mint payable card, also is reflected on the mobile wallet now.
Now you can, using that, you can top up your mobile phone in that part of the world, you know, you pre-pay for your mobile phone. You can attach an overdraft facility, just as we do in the banks here. If you want to send money back home, which is a big part of what these migrant workers do, you know, send back money home, you can do that with a few clicks, you know.
So now I would qualify by saying that not all those value-added services have been made live; this is the next phase to make those services.
Ed Milewski: Right. You mentioned a company that’s based, I think, in Kenya?
Vikas Ranjan: Yes.
Ed Milewski: And you said this would be a good company to compare to in terms of what you’re trying to accomplish.
Vikas Ranjan: Yeah, I would say that a good benchmark, aspirational company, you know, which revolutionized the mobile payment market –
Ed Milewski: Is this a public company?
Vikas Ranjan: No, it’s a private company, I believe. You know, it’s a very famous company called Mpesa.
Ed Milewski: How do you spell that?
Vikas Ranjan: MPESA. About 10 years ago, they started.
Ed Milewski: But once you get this base, like, I can even – like, I’m not a very technically literate guy, but it’s amazing now. I pay for parking now on my phone. I mean, you can do anything once you get into this thing.
Vikas Ranjan: Yes.
Ed Milewski: So you’re really rubbing shoulders with some really big –
Vikas Ranjan: Yes, in terms of the scalability of this platform, you know, once you have built it, you know, it does not matter if you service 100,000 or 500,000, 1 million or 2 million or 10 million. Yes, you have to scale up your infrastructure, for example, you know, data centres and the things like that.
Ed Milewski: But the heavy lifting –
Vikas Ranjan: Has been done, exactly. So in case of Mint, the heavy lifting has been done, and now the migrant worker is just one part of the story, right? You know, it’s not just, you know, individuals who are under-banked or un-banked. It’s also the merchants who are under-serviced.
Ed Milewski: They don’t get services from banks?
Vikas Ranjan: That’s right. The small merchants, I’m talking about.
Ed Milewski: I’m going to just throw out this chart here, I want to put up the chart just to make a couple of quick comments, and then we can carry on. So there we got a two year chart, and I see this is not a quiet stock. This – beginning of October of ’17, it sort of started moving from about, oh, $0.10, up to $0.30, back off into the 20-level, and ultimately at $0.47. now there must have been -w as there a false start here, or what was it?
Vikas Ranjan: Yeah, so if you look at the last four years chart, you will see –
Ed Milewski: And I just want to add, there’s about 200 million shares, and Gravitas owns half of those shares.
Vikas Ranjan: Yeah, about 53, 54 percent.
Ed Milewski: So you are definitely in control of this.
Vikas Ranjan: We are in control. Yes.
Ed Milewski: And you’re not charging a fee to run this?
Vikas Ranjan: No. Funny enough, when Gravitas took over and one of the Gravitas’ co-founder, my partner, Vishi Karamadam, who acts as the CEO and has been the CEO since we took over the company, we never charged Mint any fee. You know, we ran the company, pretty much on low cost, and Gravitas provided the Board and the management. Talk about a classic merchant banking private equity-type approach, without, you know, taking advantage. Every share Gravitas owns, we paid for.
Ed Milewski: Okay, so you’re major shareholders, so are you basically only in Dubai right now? I guess you are everywhere your customers are.
Vikas Ranjan: Yeah. So right now we are in United Arab Emirates, which means that employers could be anywhere within the UAE, United Arab Emirates. Dubai is the centre, that is where our main operation is, it’s a fairly, you know, sizeable operation – we have about 80-plus people in Dubai. Mint, very quickly, is becoming a very prominent fintech company in the region, and for good reasons, you know, right? Mint is an ecosystem. Mint is a payments ecosystem; not only Mint can issue cards, it can also process its own transactions, and that’s big.
Ed Milewski: Yeah.
Vikas Ranjan: Which means that it puts us into big league, you know?
Ed Milewski: I’m starting to understand the potential –
Vikas Ranjan: – that’s right.
Ed Milewski: Scalability and so, revenue streams – there must be multiple revenue streams!
Vikas Ranjan: Potential multiple revenue streams. So the key part was that, let’s get solidified – the customer base, right? So now we have 600,000 and growing. We are still far off; there are 5 million migrant workers just in the UAE alone, and in the neighbouring countries there are another 20, 25 million migrant workers. And beyond that, the potential is limitless.
So once we have proven the model in the UAE, which is what we are doing right now, we can take our technology –
Ed Milewski: Anywhere.
Vikas Ranjan: -stack and go anywhere. And all we need is to partner with a bank or a telecom company in different regions, and it’s like a plug and play. You know, we light up, you line up businesses for these partners. And, we don’t have to invest, you know – our partners do.
Ed Milewski: Sure. I remember when we had lunch and you told me about this, and I was watching it, you know, I mean, I saw it start to move, and I think I missed the boat here. So just before we close, I want to ask you – so right now you’re at 600,000.
Vikas Ranjan: Yes.
Ed Milewski: And I mean, if you can’t put a number, but I’d like to sort of say, in three years from now, would you like to have a million? Would you like to have 2 million? I mean, you’d like to have 10 million, but I mean, realistically, what kind of, like the growth is going to start to accelerate, isn’t it?
Vikas Ranjan: Yes. So you are absolutely right; I mean, our aspiration is to have at least 1 million cardholders in UAE alone, and right now, you know, average revenue is about $10 pr card per year. We ant to ramp that up to $100 per card per year. Now, that’s simple math.
Ed Milewski: $100 million company with just a million.
Vikas Ranjan: Exactly. Revenue company. And it’s a very profitable model, because once you have built the cost a, your cost base does not grow incrementally in the same proportion.
Ed Milewski: Right, right, right, right.
Vikas Ranjan: you know, we calculate internally a very high net margin – 50 to 60 percent net margin. So this could be a substantial company in the UAE alone, but yes, over three, four, five, six years, as we expand beyond UAE, you know, can we have, 5, 10 million cardholder subscribers?
Ed Milewski: Why not?
Vikas Ranjan: Why not?
Ed Milewski: Vikas, we’re going to leave it there.
Vikas Ranjan: Thank you.
Ed Milewski: I really appreciate you coming on, because I’m personally interested. I haven’t made an investment yet, but I’d like to have you back in a little while –
Vikas Ranjan: I would love to.
Ed Milewski: We can monitor your growth. That’s it, ladies and gentlemen – Vikas Ranjan, Mint Corporation.