DineroMail or starting to pull back the curtain
While summarizing my trip in Argentina in January, I did not mention that I spent 10 days in Buenos Aires investing in one company and building the tech team for another.
I made a small investment in DineroMail (www.dineromail.com). DineroMail is a Latin American Paypal equivalent allowing person-to-person payments in Argentina, Mexico and Chile. Like Paypal it is mostly used for auction payments.
The company was created during the bubble days but has withstood the subsequent Internet and Argentinean crashes. It is break-even and has been growing 10-15% month to month for the past 18 months.
What’s interesting is that it’s not just a carbon copy of Paypal. In Latin America credit cards are far and few between and ACH transfers are not common either. As these represent more than 95% of the funds into Paypal, adapting the model required creativity. DineroMail ended up doing partnerships with local convenient and retail stores allowing you to put money in your account and withdraw it from thousands of retail locations.
The company is also rolling out a program by which it gives a debit card to all its customers with a non-zero balance in their account. It also provides shopping carts to over 1,000 Internet sites in Latin America.
The fee structure is somewhat higher than Paypal’s – DineroMail charges 5-8% of the retail price for the transaction, as a result of the added costs of allowing funds to be obtained and deposited at retail.
Combined with a further Latin American roll-out and continued increases in Internet and ecommerce penetration in the region, I am reasonably optimistic on the fate of the company even though it may take a fair amount of time (5-10 years?) before it reaches a respectable scale. However, for me it’s a project worth doing no matter what as DineroMail is an enabler and complement to my core project which I will be describing shortly!
Conclusion: If you are looking for a Latin American billing system, contact me 🙂