TANGapp aims for fintech to have a social impact in PH

MANILA – A US-based fintech startup founded by a Filipina aims to make sending remittances from the United States “as easy as sending a text,” while impacting the lives of OFW families.

TANGapp said it aims to do this with a low fee of 3 percent for transfers, as well as a “live exchange rate” that tracks the value of the dollar against the peso and is updated hourly. Money sent from the US can also be received “within minutes”, said TANGapp founder and CEO Rebecca Kersch.

Kersch said she conceived the app after seeing how OFW families pay “exorbitant” fees to send money to their families back home. Kersch also noted how OFW families who received remittances were often beaten off and thus did not have access to financial services that would have helped them improve their lives.

She said TANGapp aims to change this state of affairs by offering much cheaper rates than traditional money transfer companies. She also envisions the app becoming a gateway to financial inclusion for OFW families.

Kersch, whose mother is Filipino and whose father is Dutch-Indonesian, said she often observed how her “Tita Baby” would be charged an average of 8 percent every time she sent money home.

Tita Baby, who is a cousin of Kersch’s mother, was a migrant worker who “sent home almost everything she earned”.

Kersch noted that the 8 percent remittance fee is close to 1/12, which meant that during a full year of working and living abroad, almost a full month of her Tita Baby’s salary goes to remittance companies.

“I grew up watching this and obviously thought it was exorbitant,” Kersch said during a meeting with reporters last February 13 in Makati.

Aside from making it easier to receive remittances and reduce the cost of sending money, Kersch said TANGapp also aims to make it easier for OFW families to access financial services.

She said that while doing research for the app in the Philippines, she saw that the lives of many OFW families had not significantly improved despite the money sent home by their loved ones abroad.

“That’s when I realized: This is a crisis,” Kersch said.

While TANGapp is limited to being an app for receiving money transfers and buying prepaid cell phones, Kersch said she envisions it becoming a platform for many other financial services that can help OFW families.

The app itself only came out on 1 September 2020. On Google Play, it has been downloaded and installed just over 10,000 times. The company is also still just a 12-person team made up of Kersch and several other technology and business students, many of whom are her schoolmates from Harvard University.

But TANGapp is expanding exponentially, she said. Last year, the app saw monthly growth of 35 percent, with 40 percent of users being repeat users.

The company said it raised $1.5 million in pre-seed funding from 17 angel investors in 2021 and is currently raising $2.5 million from venture capital firms and angel investors.

One of the biggest investors so far is Katrina Razon, CEO and founder of the US venture capital firm KSR Ventures. She is also the daughter of port billionaire Enrique Razon.

For 2023, TANGapp said it is focusing on meeting more Filipino business and community partners. It also wants to reach out to non-profit and charitable organizations.

TANGapp will have some fierce competition. Fintech giant GCash is looking to expand overseas beyond cross-border payments. GCash recently announced that the Bangko Sentral ng Pilipinas has allowed it to register Filipinos in Japan, Italy and Australia even without a Philippine SIM card in a beta test.

Viber, which is one of the most popular instant messaging platforms in the Philippines, is also looking to add a payment feature to its app that will allow users to send and receive money worldwide.

The use of digital payment platforms exploded during the pandemic as locked-down Filipinos turned to online shopping and payments.

Under its digital payment transformation roadmap, the Bangko Sentral ng Pilipinas aims to convert 50 percent of retail payments to digital and onboard 70 percent of the adult population into the formal financial system this year.

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