Thought Leaders in Financial Technology: SurgePays CEO Brian Cox (Part 6)

Sramana Mitra: How big is this segment you’re catering to?

Brian Cox: I always say a third of the country. Miami Herald did an article this year talking about the impact of the infrastructure bill. There are a couple of programs that are based on income level qualifiers. One of those is the affordable connectivity program which is how we provide the majority of our broadband. They did some math and found that 6.4 million households in Florida qualified for this program.

If you look at the state of Florida and extrapolate that, it comes out as a third of the country. You also factor in college students. You factor in the elderly. It doesn’t mean that you’re poor. It just means that I want to cap my spending on talks, text, and data at $3 a month. Even telehealth for the elderly. They’re not going to pay $100 a month to Facetime a doctor. If cost is a function of barrier to entry and it’s a little more value-based, the evolution pushes that product out to that segment.

Sramana Mitra: How many stores do you have to get to to be able to cover the hundred million population?

Brian Cox: I’ve never been asked that question. Here’s where the trick to that question is. Now that we have an influx of immigrants, you have specialized stores now. The Hispanic stores are now on every corner. They cater to folks that come here. We have a lot of those. We do really well providing service to Hispanic stores. We got our operations centered in El Salvador for the purpose of having Spanish as a first language to provide client services to these stores. I have a goal of 50,000 stores by the end of 2024. It’s an uphill climb.

Sramana Mitra: How much money does a store make from your business?

Brian Cox: I’ll drill it down to specific products. Let’s say you walk into a store and you made a payment for XYZ Wireless. You pay $40. That store is probably going to make about $4. What’s interesting about that is, let’s say you come in and you’re going to wire $300 to Guatemala. That store makes about $3 to $5 for that too.

Why do the stores like us? Instead of taking the risk of a $300 wire where they now have to get that money to the bank, they’ve just taken a $40 payment and they know you’re going to come back next month and make that $40 payment again. You probably have two to three people in your house that need to make their payments. That’s how the store makes money. Think about this too. There’s no inventory. They don’t have to take the risk of buying a consumable.

Sramana Mitra: Roll it up for me. Is the store making $10,000 a year by working with you?

Brian Cox: Most stores probably make about $300 to $500 a month. This is profit that they have no risk on.

Sramana Mitra: Very interesting. How big a company are you now?

Brian Cox: We should be right out of $130 million in revenue.

Sramana Mitra: Fantastic! Thank you for your time.

This segment is part 6 in the series : Thought Leaders in Financial Technology: SurgePays CEO Brian Cox
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