Native Miamian and FIU graduate Diego Yanez is on a mission to make it easier, faster, and cheaper for immigrants to send remittances back to their home country. As a Venezuelan immigrant who came to the US when he was seven years old, Yanez has an intimate understanding of the inefficiencies plaguing this multibillion dollar industry. This includes long wait times and costly transaction fees using traditional providers like Western Union and MoneyGram.
In December of 2020, Yanez teamed up with Dominican Republic-based lawyer and 20-year banking veteran Marino Marrero to develop Alfred Pay, a startup that is leveraging crypto and blockchain technology to disrupt the remittance industry.
“The average cost of a remittance is 7-15%, but some users are paying up to 25%,” Yanez told Refresh Miami. “On our platform, we charge 3%.”
Alfred Pay is also quicker than most crossborder payment platforms. According to Yanez, Alfred Pay only takes 4 to 6 seconds to make a transaction.
What’s their secret? It’s all about the crypto. When users load their account with dollars, Alfred Pay converts it to USDC, a ‘stablecoin’ cryptocurrency that is pegged to the US dollar. When the non-US user wants to access these funds, it is then transferred into the local currency.
“Everything on the crypto side happens on the backend,” he explained, noting that users don’t see the USDC transactions happening behind the scenes. “For the user, it’s 100% seamless,” said Yanez, likening the user experience to popular finance apps for domestic consumers like Cash App and Venmo. This stands in stark contrast to the more complicated user experience typically found in apps made for transferring funds between currencies such as Wise.
Yanez underscored that just because the user experience is straightforward doesn’t make it any less secure. “Everything we do is compliant, and we are audited regularly” he said. Additionally, the startup has one US dollar sitting in its bank account for every USDC that is on its network. That’s a much more risk-averse approach compared to the use of Bitcoin in El Salvador, for example.
Alfred Pay is built on the Stellar blockchain. Yanez attributes much of Alfred Pay’s early success to this platform: “We’re not reinventing the wheel. This is not some technology that we created. We’re simply leveraging this technology and bringing it to market.” Stellar’s board of directors and advisors include Keith Rabois, General Partner at Founders Fund and early #MiamiTech convert, Stripe CEO Patrick Collison, and Y Combinator President Sam Altman.
In late December, Alfred Pay won $215,000 from the Stellar Community Fund to further develop their platform. The startup plans to launch its product for US consumers in late March before rolling it out to consumers in Haiti and the Dominican Republic in June. The Alfred Pay team also has its sights set on a pre-seed fundraise of $2-4 million this summer.
Yanez, who graduated from FIU in 2017, hopes that his story empowers other students like him. “My advice would be to use your imagination and go for it,” he said.
“Startups with $1B valuations and pre-seed startups like ours have one thing in common: it’s a constant rollercoaster,” Yanez continued. “Understanding to control our emotions throughout the journey has been key.”
Take a sneak peak at Alfred Pay’s product by watching this video.
Alfred Pay team pictured at top of this post: Alejandro Laplana (Director of Technology), Diego Yanez (cofounder), Jose Yanez (Diego’s dad), Marino Marrero (cofounder), Daniel Laplana (Operations).
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