The Forgotten Remittance Opportunity
WorldRemit has raised $40 million Series C round, bringing its total to $220 million. That is a massive war chest in the remittance business. From its press release:
With the funds, WorldRemit will enable customers in Africa to transfer money to 148 countries as easily as sending an instant message, using the WorldRemit app. Countries in Africa which now receive remittances through WorldRemit, will become send countries. Most importantly, the new service will make sending money within Africa faster, easier and low cost.
Essentially, WorldRemit wants to do two-sided remittance: you can send money to Africa, from outside the continent, and also send from the continent to anywhere else.
Yet, remittance to Africa is in a state of flux. TransferWise has crashed the parties maintained by WesternUnion and MoneyGram. But despite all the "innovations", transferring money from the West to Africa remains high, due to the exchange rate losses.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
It is refreshing that WorldRemit plans to make it possible for Africans to send to the world. I do not know the size of that market beyond the typical sending of money, from Africa, to students studying abroad.
The following are the main developments in this sector:
- Blockchain will make this remittance business irrelevant in coming years. In short SureRemit, a Nigerian startup, now claims that it can offer "Zero fee remittances ", joining the likes of Circle which pioneered that in UK.
- A winner in this game should look at intra-African remittance. That has been neglected. There are merchants across the trade routes looking to send money across African cities. That remains high through the banking systems. There is a latent opportunity there as I explained here.
For anyone to take up the intra-Africa remittances, enough data is needed, to see the market size and possibly - the gross value per quarter. Nigeria, South Africa, Egypt and maybe Ethiopia could offer a decent market size, for others, I do not know.
Wave.com has also come up with free transfer though in Nigeria yet but they are in Ghana and some African countries. As they said that profit is from exchange rate only and you can compare theirs with other companies.
When you live in diaspora, you worry if the money you send is used for the right reasons. On this note, there a Rwandan company (i cant recall website) that allows you to pay directly to the person or institution that needs the money not through your family or friends.
The game is changing as Africa is championing different ideas. Looking forward to the block chain based solution.