The Harvard Business School‘s Professor Lauren Cohen and Research Associate Grace Headinger have written a case study about Purpl‘s mission to reshape the Lebanese remittance market. It is now available for download!
Get your own copy.
Here’s a recap of the case study
In the Levant, 2,500 years ago, the Phoenician city-states, which eventually became modern Beirut, were among the world’s first manufacturing and maritime trade centers. Phoenicia was well-known for its purple dye, Tyrian purple. The civilization’s own name has been lost to history, but its Greek name, which means “land of purple”, endures. Lebanese have inherited this commercial network since the era of globalization, with a diaspora community of +20M Lebanese that contributes to Lebanon’s remittance inflows.
David didn’t kill Goliath because he set out to slay giants. He set out to give sandwiches to his brothers, and Goliath got in the way
We want to be not just the voice, but the David of the 20 million+ Lebanese all around the world and in Lebanon that can no longer count on Goliath, the institutions that were created to serve them and put their interests first.
—“Our Why,” Purpl
Remittances are Lebanon’s lifeline
Lebanon is in the midst of a humanitarian, economic, and political crisis. 78% of the Lebanese population lives below the poverty line, and 36% lives in extreme poverty (UN).
In 2020, Lebanon accounted for 1% of global remittance flows, ranking 22nd largest recipient in the world. As of 2020, it made up 20.9% of Lebanon’s GDP, according to the World Bank. However, Lebanon became the 5th most expensive recipient country in the world.
Reshaping the Remittance Market
The oligopoly of traditional players in Lebanon continues to make the remittance market inefficient.
Purpl’s mission is to reconnect the diaspora population with Lebanon through remittance payments, reducing its costs, and enabling financial inclusion. As the first Lebanese remittance and cash out aggregator, Purpl aims to facilitate payments into and eventually out of Lebanon. Furthermore, Purpl will enable its customers to use its digital wallet to transact at Purpl merchants.
Traditional money transfer companies charge between 9-12% for their services, significantly more than the global average of 6.51%. However, Purpl strives to provide the lowest rates for money transfers to Lebanon.
Purpl’s Remittance Business Model: Partnerships and the use of Existing Infrastructure
To achieve its strategic objectives, Purpl has built a unique replicable ecosystem of partnerships with international digital remittance companies, legacy banks, cash-out networks, fintech players, and merchant networks.
Purpl is an aggregator that opens the Lebanese corridor to new digital remittance platforms that operate at a lower cost than traditional players and whose goal is to reduce cross-border money transfer costs.
As for Purpl’s cash out partners, no additional fees would be charged to the remittance recipient upon cash-out.
Purpl partnered with an incumbent player to build trust with local users and benefit from an existing infrastructure. The result of this partnership is the launching of the first cardless ATM cash out in Lebanon.
As part of Purpl’s commitment to compliance, we abide by international money laundering laws, terrorism financing laws, and other illegal financing laws. So, we have partnered with Jumio; a leading e-KYC provider, to undertake identity and ID checks on Purpl’s users.
Through partnerships with a number of international digital remittance providers, Purpl plans to reach the Lebanese diaspora community wherever they live, and channel money inflows into Lebanon from around the world.
Purpl’s Open Banking Model for Interoperability with Digital Wallets
With Purpl, it is easy to integrate with other players and replicate its remittance and cash out aggregator model in other countries. In addition, we will provide our users with a digital wallet, which they can use to receive and cash out transfers, as well as to make purchases from merchants. The digital wallet would operate on Purpl’s network of merchants’ existing points of sales.
Reconnecting Lebanon to the World, one adopter at a time.Purpl
Written by: Rim Ghandour