Page 1 of 4Just two international companies have dominated Africa’s remittance market, but that is changing and changing fast, writes Stephen Williams
We now have the emergence of African enterprises, developing African platforms for Africa’s needs – and for Wari, that goes way beyond just providing money transfer services.
Money transfer services have rapidly become part and parcel of everyday life in Africa and few of the continent’s citizens will have not have experienced sending or receiving funds in this way. It has been the emergence of mobile telephony that has challenged what was previously a virtual money transfer duopoly and transformed the way that financial services can be offered and utilised.
Many alternatives have sprung up recently to challenge the dominance of major players such as Western Union, thought to control 18 per cent of the worldwide remittance market with nearly 500,000 outlets in 200 countries, and MoneyGram who is believed to have a five per cent share of the global market.
Most of the commentary focusing on the emerging African money remittance services cite the example of the telecoms operator Safaricom’s M-Pesa who has been highly successful in building a money-transfer market in East Africa. But there is an equally successful enterprise operating from its home market in Senegal, called Wari, who now has a presence and operations in 24 countries in Africa, as well as in the USA, Canada, Europe and China.
Wari’s expansion is also underway with operations being planned for Uzbekistan, Russia, Turkey and South Korea, and Kabirou Mbodje wants to roll out Wari across the rest of sub-Saharan Africa within a couple of years.
Fees for remitting money vary wildly between the different providers and countries, but it is generally agreed that Africans in the Diaspora, who sent almost US$60bn in remittances back to the continent last year according to the World Bank’s figures, pay the most in fees. On average, migrants sending money home to Africa spend from eight to 12 per cent in fees.
Furthermore, when you add in the cost and time of collecting remittances as people travel to towns and cities, typically to banks and post offices, the burden is even greater.
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