Technology for the underserved is catching on — slowly

SAN FRANCISCO — While the debate rages over tech's record on diversity and economic inclusion, there is little argument over the intentions of venture-capital firm Accion and its clients, which include start-up Quippi.

They've teamed up to offer technology for the underserved, those typically either unable to afford tech or gain ready access to it. It's a multibillion-dollar opportunity in multiple markets. "The market is ripe for disruption," says Michael Aleles, CEO of Quippi, which offers what it says is the first international shopping card that lets immigrants send money home without being gouged by onerous wire-transfer fees. The market is pegged at $22 billion between the USA and Mexico, where Quippi is focusing its first efforts.

Aleles, a former executive at Intel Capital, the venture-capital arm of the computer chip giant, says several countries, including El Salvador, are interested in the service. "This is the way for retailers in one country to reach consumers in another country."

Technology for the disenfranchised could be an immense market, but it has evolved slowly.

About 60% of the world's population (4.2 billion) will remain unconnected to the Internet through this year, according to a report on Internet usage by the International Telecommunication Union.

Yet dozens, if not hundreds, of companies are jumping in to snare a slice of the action, says Paul Breloff, managing director of Accion Venture Lab, which invested in a $2 million round in Quippi. "Sure, there is a huge opportunity for markets not served — but start-ups also see a chance to take advantage of a (digital) infrastructure now at (people's) fingertips," he says.

Many of the entrants focus on financial services, where they believe they can assess risk better than banks and reach consumers more conveniently, Breloff says. The candidates include Xoom, an online money-transfer service; StreetShares, a social-lending marketplace; M-Kopa Solar, an asset-financing company; and consumer-lending firms Lending Club and Prosper.

Last year, Quippi laid an early claim to a fledgling industry that has been largely ignored. It developed technology that lets consumers buy shopping cards good in Mexico on its website, www.quippi.com, and at certain wireless outlets, grocery stores and liquor stores in California and Texas. The cards can be redeemed at several major chains in Mexico — department store Coppel, grocery store Chedraui and Office Depot. A large pharmacy chain, Farmacias Benavides, is about to join. The catch is that Quippi does not charge a commission or a fee to exchange money.

"With so many Mexicans in the U.S. (about 35 million) and their families in Mexico, it is important to give them the safety they require to make sure their money is spent the way it is meant to be," says Arturo Hernández Martínez, chief marketing officer at Office Depot, one of Quippi's retail partners.

Lourdes Marin, who lives in Anaheim, Calif., has sent Quippi-issued cards to friends and family in Mexico for several months. She recently gave a Coppel card to Gomer Lopez. Previously, she used Western Union, which was costly and complex. The Quippi card has "worked well," she said. "I've had no issues."

Sending money back home — otherwise known as remittance transfers — is a major source of wealth for countries such as Mexico. Last year, remittances from U.S. migrants to Mexico topped $22 billion . The growth of mobile banking and online money transfers has made it easier to send money, Aleles concedes, but the market has been slow to adopt tech.

"The bottom of the pyramid consumers are usually ripped off," Aleles says. "These are generally people who are not comfortable with tech."

Actor Sean Penn has been active in lobbying tech companies to contribute their products and expertise to the needy, such as victims of the Haitian earthquake in 2010. In an interview several months ago, the Academy Award winner barely hid his disdain for the underwhelming reaction among tech behemoths to his efforts. "I have no expectations now," he said, taking a drag off an e-cigarette while rolling his eyes. "Only Salesforce and a few others have come through" over the years.

Increasingly, start-ups and major retailers see long-term benefits.

"It takes time," Martinez says. "But we think, during the back-to-school season, our programs will grow effectively. We're excited about (the Quippi partnership)."

Indeed, there is movement among companies to address emerging markets, especially in South America (Brazil) and Africa (Ghana and Nigeria), says Wayne Sutton, general partner at Buildup, an organization that brings together innovators. "There is a lot of back and forth on this — some people think it is crazy," he says. "But the opportunity is great."