For many families all around the world, remittances from Kenyans in the diaspora are a crucial source of income. In this field of payments, time is of the essence, and every dollar matters.
According to the World Bank, low- and middle-income nations get the majority of these inflows, accounting for $605 billion of the $773 billion in incoming remittances in 2021.
Thirty poor nations received more than 10% of their GDP in remittances, with eight of them getting more than 25%.
Cross-border transfers can be expensive, dangerous, and sluggish due to limited access to standard banking facilities.
According to World Bank data from the second quarter of last year, the average cost to the sender of a $200 transfer is 6.01 percent.
Digital remittances cost 4.8 percent while cash-funded remittances, which are customarily the most expensive method of transmitting money, cost 6.52 percent.
When customers have access to enough information, however, the percentage falls to just 3.35 percent.
In the last six years, there has been a significant advancement in the shift from cash-based to digitally initiated and end-to-end remittances.
Six years later, the percentage had reduced to 66 percent, with digital end-to-end and digitally begun transactions at 13 percent and 21 percent, respectively. In the second quarter of 2016, 93 percent of remittances worldwide were cash-initiated.
By introducing two cutting-edge products that dramatically speed up and reduce the cost of cross-border person-to-person (P2P) payment transactions, Visa has also connected sub-Saharan African consumers to a vast global financial network with billions of users.
Nigeria got the most remittances in the area ($19.2 billion), followed by Ghana ($4.5 billion), Kenya ($3.7 billion), and then Kenya.
In Kenya, Visa has partnered with Absa Bank Kenya to launch a domestic and cross-border remittance service via the Visa Global network. This is a first-of-its-kind market solution in sub-Saharan Africa and will enable seamless money transfers and payments to any of the two billion or more Visa cardholders in over 100 fast funds-enabled markets, in near real-time, with the full security and dependability associated with Visa cards.
Meanwhile, in the Democratic Republic of the Congo, where only around 26% of the population is thought to be a part of the formal financial system, it is projected that in 2021, residents received remittances worth more than $1.33 billion.
According to the World Bank and African Development Bank, sub-Saharan Africa has some of the world’s fastest-growing economies and is a global leader in the adoption of mobile digital payments, with about 650 million mobile phone users.
Africans frequently transact internationally in the areas of trade, education, and healthcare, among other things, and this service is providing them with a strong, effective new choice.
With these solutions, Visa is boosting financial and digital inclusion in Sub-Saharan Africa and across the globe while also improving the efficiency of the remittance process and bringing millions of people to connected, global platforms.
Source: Business Daily
