Transformations in remittances across Africa are evolving
In the dynamic world of finance, Africa is witnessing a significant shift in the remittances sector. As populations across the continent become more mobile, it's likely that more funding and product development will follow 1.
The African remittances market has seen an increase in competition in recent years, with both traditional incumbents and digital players driving down costs 2. Notable digital players like WorldRemit and Azimo are gradually expanding their presence in Africa through partnerships with mobile wallet providers and adaptations to market requirements 3, 6.
Incumbents such as Western Union, MoneyGram, and Ria continue to dominate the market with their extensive retail networks 4. However, the landscape is changing, with digital players like WorldRemit, Azimo, and others making inroads into the continent 5.
One such digital player, Eversend, although not specifically focused on remittances, plans to gain market share by focusing on intra-Africa cross-border payments and broader financial services 7, 8. Meanwhile, other digital players like Chipper Cash and Mama Money have already launched digital banking products in Africa 9, 11.
Cash pay-ins and pay-outs remain dominant in Africa, accounting for 90% of total pay-ins at Mama Money 10. However, digital payment methods, such as bank account-based remittances and wallets, are gaining ground, particularly in countries like Tanzania and Kenya 12.
Interestingly, informal channels for remittances, such as sending money through bus drivers, are still widely used in Africa, but formal channels are becoming more popular 1, 13. Some actors involved in remittances in Africa are pursuing strategies to transform diaspora remittances from mere family support into sustainable entrepreneurship through digital platforms like WIDU.africa 14.
Physical agents are essential in Africa for remittances due to the dominance of cash transactions, but their role is different from those in other parts of the world 15, 16. New products are emerging to improve overall financial inclusion in the region, with only 33% of the adult population in Sub-Saharan Africa owning a bank account as of 2017 17, 18.
As the opportunity for remittances within Africa continues to grow alongside established diaspora corridors 19, it's clear that the African remittances sector is poised for significant growth and innovation in the coming years.
References: 1. More funding and product development are likely to follow as populations across Africa become more mobile. 2. Competition in the African remittances market has increased in recent years, with both incumbents and digital players driving down costs. 3. Digital remittance players like WorldRemit and Azimo are gradually expanding in Africa through partnerships with mobile wallet providers and adaptations to market requirements. 4. Western Union, MoneyGram, and Ria continue to dominate the African remittances market with their large retail networks. 5. Digital remittance players like WorldRemit, Azimo, and others are expanding in Africa through partnerships with mobile wallet providers and adaptations to market requirements. 6. Competition in the African remittances market has increased in recent years, with both incumbents and digital players driving down costs. 7. Eversend, although not specifically focused on remittances, will look to gain market share by focusing on intra-Africa cross-border payments as well as broader sets of financial services. 8. Eversend, although not specifically focused on remittances, plans to gain market share by focusing on intra-Africa cross-border payments and broader financial services. 9. Chipper Cash, Eversend, and other digital players have already launched digital banking products in Africa. 10. Cash pay-ins and pay-outs remain dominant in Africa, with cash accounting for 90% of total pay-ins at Mama Money. 11. Mama Money is building a banking product for diaspora workers. 12. Digital payment methods, such as bank account-based remittances and wallets, are gaining ground in Africa, particularly in countries like Tanzania and Kenya. 13. Informal channels, such as sending money through bus drivers, are still widely used in Africa, but formal channels are becoming more popular. 14. Various actors involved in remittances in Africa pursue strategies such as transforming diaspora remittances from mere family support into sustainable entrepreneurship through digital platforms like WIDU.africa, enabling knowledge transfer and global cooperation; this approach shifts remittances toward business capital for economic transformation. 15. Physical agents are essential in Africa for remittances due to the dominance of cash transactions, but their role is different from those in other parts of the world. 16. Physical agents are essential in Africa for remittances due to the dominance of cash transactions, but their role is different from those in other parts of the world. 17. Only 33% of the adult population in Sub-Saharan Africa owned a bank account as of 2017, but new products are emerging to improve overall financial inclusion in the region. 18. Only 33% of the adult population in Sub-Saharan Africa owned a bank account as of 2017, but new products are emerging to improve overall financial inclusion in the region. 19. The opportunity for remittances within Africa is expected to continue growing alongside established diaspora corridors.
