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Cross Border Finance

Borderless Fintech in Africa

There is a demand in Africa for cross-border payments and a need to regulate the payment industry on the continent while at the same time opening it up to include the unbanked demographic’

Hannalie Marsh – General manager at Wire Card South Africa

Many people are faced with the administrative struggles and costs of sending and receiving money across African borders. The World Bank estimates that the average cost of sending money in Africa is 9.8 percent of the remittance amount, as compared to the global average of 7.5 percent. One of the reasons for the high cost in cross border transaction fees is the lack of competitive infrastructure that sees traditional organisations holding monopoly within this sector.

In addition to the high cost, African migrants often find it challenging to open bank accounts in the new countries they have relocated to and also face the reality of knowing that their recipient back home may not have a bank account as well. With this we see how the fintech sector is tackling these challenges head on and disrupting the traditional structures of local and global money transfers, which are usually time consuming and costly.

Startups such as Transfer Wise are creating borderless financial services. Currently available in Finland and Denmark the company’s borderless account and debit card allows for account holders to obtain multiple currencies, to send money around the world with low exchange fees. In an African context the fintech sector is creating similar products that provides migrants and the unbanked demographic with additional affordable options.


The concept of a cashless society has taken root in many countries, locally some countries are increasing the use of digital and mobile payments due to economic downfalls and innovative inclusive financial solutions, countries such as Zimbabwe and Senegal are noted as some of the leading drivers.  In this aspect companies are using blockchain programs as tools for affordable digital money transfer. South African based fintech start-up Vio Digital created a blockchain based money transfer app that makes it easier to send cash from person to person anywhere in the world. The company reports that across Africa, remittance solutions are typically among the most expensive. Through their mobile app there are no transfer, exchange fees and foreign exchange markup. The app is currently available in Kenya, Nigeria, Ghana and Cameroon.

Mainly focused on West Africa transactions, Nigerian company Tanjalo allows for anyone in the country to buy and sell bitcoin in Nigeria. Tanjalo aims to establish a power cross- border money transfer throughout West Africa and increase access to cryptocurrencies. The company aspires to simplify money transfer between African countries in the continent and transfers from the US to Africa through the bitcoin trading platform.

Currently available in Uganda, South Africa and Zambia, Wala is a mobile service which uses blockchain technology to enable users to send money, earn rewards and apply for credit services through the platform.

The company has a zero – fee rate on remittance. In 2017, Wala reported that US $ 1 billion was sent from South Africa to Zimbabwe with the inclusion of fees around 10 – 15 percent which calculated to an estimated US $ 100 – 150 million in fees.

‘Providing a zero-fee rate and borderless payment solutions for these consumers is game changing. It gives consumers more control over their financial well-being’                                                                                  Tricia Martinez – Co-founder of Wala.


Mobile Transactions

The Central Africa electronic money transfer money platform GIMAC and fintech start up Terra Pay have partnered in an agreement that aims to create an affordable money transfer ecosystem in the Central African Economic and Monetary Community (CEMAC) region. The partnership will allow for instant cross border money transfer to bank accounts and mobile wallets in the region.

‘Terra Pay’s collaboration with GIMAC is part of the company’s long-term strategy to enable interoperability and democratize financial services in Africa’

Ambar Sur – CEO Terra Pay

Various organisations are looking at mobile money transfers as an option to reduce the cost of sending money across the continent as well as trying to simplify the process. There is currently an emergence of hubs that connect various payment providers through a central mechanism. Which providers can leverage from one another systems and infrastructure. MFS Africa facilitates intra- Africa payments connecting mobile money systems to another financial service provider which allows for remittance to be sent to and from mobile money accounts. In East Africa, MFS Africa integrates Vodacom’s M-Pesa and MTN’s mobile payment platforms. This enables consumers in Kenya, the Democratic Republic of Congo, Tanzania, Uganda, Zambia and Rwanda the ability to send money across borders for 3 – 6 percent of the cost through the use of mobile wallets.

Eco Bank is a mobile app that allows users to transfer money instantly across Africa with the Eco Bank Rapid transfer. Currently available in 33 African countries, users can open an Eco Bank Xpress account on their phones, this catering to the unbanked demographic. Their mobile money transfer service is said to be fast and affordable. Transfers can be sent and received via local bank accounts, mobile wallets and via cardholders using Visa direct on the Eco Bank mobile app.

Big Idea

There is a global call to reduce the cost of money transfer around the world. The World Bank 2017 brief paper found that US $38 billion was sent to Africa by the African diaspora. One of the UN, Sustainable Development Goal is for the cost of money transfer to Africa to be reduced to 3 percent by 2030.

The is an online platform that is a centeralised point to gain information on various money transfer platforms catering to consumers in Africa and the Middle East. Noted as the yellow pages of money transfer apps, the platform provides up-to- date information on the best transfer providers for the individual users.

The drive to cross border payment solutions creates an opportunity for fintech in Africa to lead in business created intra-African trade for small companies working together or trading across the continent.

The drive to cross border payment solutions creates an opportunity for fintech in Africa to lead in business created intra-African trade for small companies working together or trading across the continent.

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