- WorldRemit’s new digital service is launched a few months after a free trade agreement was signed by 44 African countries
- The UK-based money transfer firm has an extensive distribution network in the continent
- The digital service will likely be rolled out in East Africa first
British international money transfer brand WorldRemit launched its cross-border payments services within Africa to make it more convenient for its current clientele to send and receive funds coming from different parts of the continent. The main driving force of this development are the high costs of private money transfers between individuals from different African nations. According to WorldRemit, the digital service will significantly reduce these fees. The new service will also cement WorldRemit’s already wide reach in the continent.
Efficient, cost-effective money transfers are crucial to trade
The UK-based firm notes that the absence of such a service is a major hindrance to African integration because hefty fees for cross-border payments can stifle the growth of small to medium-sized enterprises. Forty-four out of 55 countries in the region inked a free trade agreement in March 2018 and the union is working on implementing it as soon as possible, according to observers. Based on a report by Al-Jazeera, the agreement is expected to increase intra-African trade by over 50% by the year 2022. WorldRemit said that Kenya, Uganda, Tanzania, and Rwanda will likely have access to the service soon. East Africa currently has an economic performance that will need the service.
The role of cross-border payments services such as WorldRemit’s new digital service is crucial to trade because it will also reduce settlement times. Before the free trade agreement, Africa had already seen a steady growth of transactional activity between different African economies. According to 2016 data from Standard Bank, more than 50% of money transfers coming from Africa are sent back to the continent. However, banks and financial institutions that lack the transactional capability to support this growth across Africa have been trying to solve the problem for years. The major problem, according to a report by The Global Treasurer, is the fact that the continent deals in multiple currencies. Apart from paying for transaction fees to send money within the continent, clients also have to pay for foreign exchange and have to contend with delays.
How WorldRemit can help improve intra-African trade
WorldRemit has seen an 80% growth per year, according to reports, with the brand transferring over $1.6 billion annually in Africa alone. WorldRemit’s footprint in the region can solve the money transfer problem, according to its executives. The money transfer firm trades African currencies on a daily basis, and it is armed with a far-reaching distribution network within the continent. This includes agent locations for cash pick-up, mobile money apps, and its partnerships with major banks. The brand owes its success to its quick, secure, and cheap money transfers, according to observers and its services has given small businesses a better and faster way to get paid.
Get more information about cross-border payments through this link.
