Send Money in Africa for Free: What You Need to Know Now
Can you ever send money for free in Africa? Have you ever been in a situation where you wanted to pay with your bank card, for food at a local restaurant in Nigeria or Ghana, and you ended up getting charged for that transaction by your bank?
What about the unhappy feeling you have, when you realize how much you lose every month to these deductions from your bank account? Sending money in Africa should be a delightful thing to do without being charged for doing so. Sending money ought to be free Africa.
It shouldn’t become a source of financial concern for anyone in Africa. You have sacrificed enough to get some money stacked up in your account, a daily but necessary task like paying for food or a lovely item you saw online, shouldn’t take away extra money from you.
Although there have been several financial companies who have sought to put an end to this problem that a lot of us face in Africa, there is still a lot to be done in order to completely address this issue.
If you’ve been following the recent developments over the past five years in the African FinTech space, you’ll notice a gradual shift from what used to exist before and what we currently have. You’ll also notice how subsequent solutions helped fill the gaps that earlier solutions failed to address.
Let’s look at it together in the following paragraphs.
How International Money Remittances were introduced in Africa
In 2015, some mobile network operators already existed and were providing basic P2P remittances through their mobile money services to some areas in Africa. They discovered an opportunity that could drive an increase in mobile money transactions and provide a new channel for loading mobile money accounts.
These mobile operators later discovered a new model that uses mobile money as both a sending and receiving channel for intra-regional cross-border remittances. According to a report from gsma.com, some of these initiatives include;
- Orange Côte d’Ivoire, Orange Mali, and Orange Senegal
- Orange Côte d’Ivoire and Airtel Burkina Faso
- MTN Côte d’Ivoire and Airtel Burkina Faso
- Safaricom Kenya and Vodacom Tanzania
The Cross-border Remittance Partnership between MTN Côte d’Ivoire and Airtel Burkina Faso
In April 2014, MTN and Airtel launched a notable partnership to allow MTN Mobile Money customers in Côte d’Ivoire to transfer money to Airtel Money customers in Burkina Faso. Due to their limited experience with international money transfers, MTN and Airtel partnered with HomeSend, which was a very established remittance hub at the time.
HomeSend offered two services to MTN and Airtel: an instant money transfer messaging platform and interface, and the management of the anti-money laundering act. This partnership recorded a huge success.
Although it advanced the adoption of cross-border remittance payments in Africa, it left a huge gap unclosed in terms of offering cheaper transaction fees.
Kenya’s M-Pesa and its Impacts in Simplifying Payments
M-Pesa was initially established to offer low-income earners a means to make microfinance payments. It later grew into a platform that enabled anyone to pay for anything with their mobile phones.
In less than 3 years of its launch, about 38% of Kenya’s adult population started using M-Pesa. By 2015, the company had 13.9 million active users — with an estimated 40% of Kenya’s GDP flowing through its network.
How does the M-Pesa fee structure look like?
The fee charged per transaction depends on the transferred amount with fees per unit reducing as amounts increase. Transfers of 1 to 100 Kenyan Shilling (KSH) are free of charge. The transfer to unregistered persons who are not part of the M-Pesa network slightly attracts a higher fee.
The possible transfer range starts at 101 KSH and is capped at 35,000 KSH for a fee of 0.87%, due to guidelines of the Kenyan Central Bank. Safaricom
Cross border M-Pesa transactions include fees from 100 to 500 KSH. The maximum amount to be sent is 70,000 KSH. The relatively low transfer fees and the simplified way to use it, resulting in M-Pesa being largely used for national and international remittances.
Although M-Pesa offers a relatively low transaction fee of 2.65 %, it’s still quite inconvenient for most Africans.
How Bitpesa is Making Remittance Payments Across Africa Faster through Bitcoin
Bitpesa uses Bitcoin for international money transfers in Africa, by connecting both Bitcoin and the already widely trusted M-Pesa, in the transaction process. In order to send money using Bitpesa, users have to trade their local fiat currency into Bitcoin.
They can do so by buying Bitcoin from legit online exchange platforms or directly from Bitpesa.
The Bitcoins can then be sent from over 85 countries in the world to Kenya, Tanzania, Uganda, and Nigeria. After receiving the Bitcoin in an African country, Bitpesa converts Bitcoin into the local currency.
The receiver can either decide if the Bitcoins should be paid out in cash or sent to a mobile M-Pesa wallet. For receiving the money as M-Pesa airtime, a second conversion is mandatory and for this Bitpesa charges a consistent fee of 3 percent per transfer which is a bit higher than using M-Pesa without Bitcoin.
In addition to the transaction fees that come with using Bitcoin and other cryptocurrencies to send money, another challenge with using this option is the little difficulty in understanding how it works. This may pose a challenge in increasing its adoption by a lot of Africans.
Apart from these payment platforms, there are also newer money transfer platforms that some Africans are using to transfer money safely within Africa that I’ve highlighted here.
A Better Way to Send Money for Free in Africa
So, we’ve seen how various solutions have been offered in order to simplify how money is sent and how to do that without transaction fees.
There is a new way to send money for free across Africa that is gradually gaining traction in Ghana, Kenya, Uganda, and Nigeria. It’s called Waya. It’s a simple platform that allows you to send money to your loved ones within your country & across African countries for free. Yes, for free!
With Waya, you no longer have to worry about calculating all the transaction fees your banks charge you at the end of the month. We’ve decided to take that burden off you so you can do what you love with your money, with complete peace of mind.
At the moment, users in Ghana can only send money within their locality, due to some regulations from its Central Bank.
To start sending money for free to any African country of your choice, download the app on the link below.
So, when next you want to send money to someone in your country or across other African countries, choose Waya to send your money for free.
Which platforms do you use to send money before now?
Let me know in the comments.
Originally published at http://wayamoney.wordpress.com on December 15, 2020.
