Mint Technology Corp.

Mint Technology Corp.

December 01, 2011 17:02 ET

Mint Technology Corp. Cashes in on the "Unbanked" Overseas

TORONTO, ONTARIO--(Marketwire - Dec. 1, 2011) -


Mint Technology Corp. ("Mint" or the "Company") (TSX VENTURE:MIT) - The technology behind a simple retail prepaid card in Canada has been repurposed by a smallcap Canadian firm for 'unbanked' Southeast Asian and other foreign workers in the UAE and the company can hardly keep up with the success.

A TSX Venture small cap Canadian payments technology company has become an e-savior for hundreds of thousands of "unbanked" foreign workers from South and South East Asia, predominantly India, in the United Arab Emirates, by repurposing a retail prepaid MasterCard that it had originally developed for one of Canada's retail shopping chains and turning it into a payroll card.

Mint Technology Corp. ("Mint"), a $15-million microcap listed on the TSX Venture Exchange (TSX VENTURE:MIT), which began its exponential growth by adapting a technology originally used to develop a prepaid card for Canadian Tire and Much Music, expects to have over 550,000 cards processing over $2 billion per annum in payroll for more than 5,000 clients by the end of Q2 2012.

All it took, Mint President and CEO Nabil Bader said, was to figure out a way to take cash out of the system. Bader worked to convince the Ministry of Labour that it would be better for foreign workers and corporations alike in the UAE if cash was removed from the payroll system and funds were funnelled through the Central Bank.

Until 2009, the bulk of the five plus million foreign workers in the UAE, mostly from India, Pakistan, Sri Lanka and Bangladesh, were paid with cash - a normal procedure in most of the Middle East that regional governments are now beginning to target.

It was a growing challenge that pitted on the one hand literally hundreds of thousands of "unbanked" (without bank accounts) workers from India and other parts of South Asia, and on the other side construction and other companies engaged in the UAE construction boom. The UAE government's Ministry of Labour (MoL) was caught in the middle, trying to protect the rights of the workers without unduly punishing the corporations. They announced the Wages Protection System as the law is known in 2008 and it is now a shining example of best labour practice for the region, if not the world.

Thus began a story that Mint Executive Chairman Chris Hogg calls "a small Canadian tech company leaving a very large footprint in one of the toughest places on earth to do business." It would be a footprint that would see a 900 per cent increase in the company's business in less than two years, making Mint the largest non-bank prepaid card processing company in the region.

The story begins in 2005 when the challenge of paying foreign workers in cash was rapidly coming to a head. Bader, a U.S. trained financial services specialist, whose mother is Lebanese and father is American, linked up with one of the largest construction companies in Dubai, CCC (Consolidated Contractors Company). Bader had two companies at the time involved in electronic payroll processing called Waseela Equity LLC and Workers Equity LLC.

"In 2005 we launched, as our trial study, our first customer, with CCC, and there were only 28 workers and seven ATMS serving the 28, as per the request of the employer for a period of 10 months," says Bader. "We started understanding all the requirements of employers, employees and what they needed. We then followed up this trial with a one month trial for 300 workers."

In mid-2006, the Ministry of Labour agreed to a trial with Workers Equity, with CCC as the first customer, involving 7,800 workers. The trial was successful and in January 2008, UAE passed what Bader calls "a groundbreaking law and the first in the region" that all employers, irrelevant of size, must pay the workers electronically. The law was enforced in the second quarter of 2009, but there was one major hitch. Most of the five plus million foreign workers, mostly from India, were unbanked and did not even qualify for a bank account. The situation was not unusual. According to the World Bank and other institutions, more than 2.5 billion people in the world do not have bank accounts.

It was at this time that Bader, who specializes in payment services and in fact opened a bank in the Philippines to cater to Filipino workers in the UAE, met up with Chris Hogg, a 30-year veteran in the consumer financial services industry and a director of Glocap Management Inc, a private investment company that had interests in credit card and consumer financial services industries in the U.S., Australia, the U.K. and SE Asia.

In 2008, Hogg and a group of Investors had acquired Canada's Mint Technology Corp. and had built and launched a prepaid MasterCard for Canadian Tire Financial Services and a youth card for Much Music but revenue traction was hard to find.

Mint turned to the Middle East where 90% of the population of the UAE are unbanked, met Bader and acquired Waseela Equity in 2009 and Workers Equity in 2011 with offices now in Dubai, Toronto and Philadelphia. As Hogg says, "It was an easy decision to go from Canada where 90% of the adult population has a bank account to the Middle East where 90% of the population doesn't!"

For Hogg and Bader, the logic was straightforward. If the devil was in the cash, then what was needed was a card that could be topped up on each payday and used to withdraw money from Mint supplied ATMs without any fees and most importantly, meet the government's law. Mint could then begin to design additional financial products which leveraged this cardholder base. "Sell them what they need not what you think they want," says Hogg.

"When we started, we had 40,000 active cards out there," says Hogg. "In less than 21 months, we passed 400,000, an increase of about 900 per cent. Today we are quickly approaching almost half a million and processing almost $90 million a month in payroll and we've only just started. Our whole business strategy now is to provide financial products to the unbanked of the emerging world and there are a couple of billion in this category out there." Mint has since opened offices in Jordan and Qatar and is moving into Saudi Arabia and Egypt.

He points out that today, Mint is the largest non-bank financial institution processing prepaid cards in the Middle East. Mint's average cardholder makes $500 a month, all of which without any deductions is loaded onto to the payroll card. Mint's 150 ATMs, programmed in seven different languages and four Indian dialects are provided at the workers' place of employment at no cost to the workers or the employers. The worker is typically from India (70%), Pakistan (20%), Bangladesh, Sri Lanka, Philippines, etc. (10%).

"The amount of payroll that is being paid under the wages protection system in UAE is about $30 billion per annum - a huge number in any country," says Hogg. "Think about the numbers, it is about $2.5 billion a month. You've got a $30 billion payroll that is going predominantly into the hands of workers from the three countries, India [70%], Pakistan [20%] and Bangladesh [10%] … there is something like $20 billion getting sent home to families in India, from the UAE, mostly in the southern state of Kerala with a population of only about 30 million."

Bottom line: Mint sees immense opportunities for growth, and already has established an office in Qatar, which has passed a similar law and plans to spend some $300 billion in the next decade on infrastructure. Hogg says, Mint's business model is to "follow the money" - Infrastructure budgets need Construction and Engineering companies who in turn employ foreign labour who use payroll cards". Mint's clients include 10 of the top 12 construction and engineering companies in the Gulf. Says Bader: "Qatar, Saudi Arabia, Oman and Bahrain are on their way to implementing a similar wage protection system and Kuwait has already implemented it. But again, the driving force was the UAE to make it happen."

"In Saudi Arabia," says Bader, "Mint will soon become the first Canadian company not involved in oil & gas, essentially the first Canadian financial services company in the Kingdom." The payroll card offered by Mint has also caught the attention of Egypt, whose Central Bank sent two officials to study Mint's operations. Hogg says, "The biggest problem in countries like Egypt, Libya, Tunisia and so on is maintaining payroll integrity when it is a largely cash based system. Where there is cash, there is the potential for corruption," says Hogg.

This growth within the UAE and elsewhere in the region is only one part of the equation. The other part relates to the use of the funds that workers withdraw from the payroll cards. As Bader explains, "The workers withdraw funds, march over to the nearest convenience store to top up their cell phone accounts and then to a money transfer establishment like Western Union to send funds home to their families." Hence, in the fall of 2011, Mint began offering both these services directly from its card.

And if that isn't enough, Mint is also now getting into the business of microfinance, since the workers are not eligible (and never will be) for regular bank loans. However, since they are on fixed year contracts with Mint's employer clients and have payroll cards, Mint is arranging to get them loans that they might need for a family emergency back home or for whatever worthwhile purpose, and then deduct payments from the card directly each month. To facilitate all of this, Mint in October 2011 teamed with Canadian transaction processing company Carta Worldwide in a 55%-45% venture in favour of Mint called Mint Global Processing LLC.

Says Bader, "This has been quite a journey from a retail prepaid card in Canada to protecting the wages of foreign workers in the Middle East, but that's what entrepreneurs do! And the journey has only just begun."


Mint Technology Corp. is a pioneer in prepaid financial products and services and was Canada's first provider of prepaid credit card programs. Today, Mint through its subsidiary Mint Middle East LLC based in Dubai designs, builds and manages an end to end card based payments solution for employers and employees for the payment of wages and benefits. Mint has developed a secure, robust payments platform that provides an improved means to handle and manage these financial transactions. Mint also provides services for those clients looking to move towards 'next generation' payment methods that include chip, internet, data mining and mobile phone load and money remittance technologies.

Stock Symbol: MIT on the TSX Venture Exchange.

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