MFS Africa and Paga have partnered to connect Paga users and Nigerian bank account holders to remittance senders from around the world.
Through the collaboration, anyone with a Paga wallet can receive transfers from millions of other mobile money users across Africa, or from any money transfer operator connected to the MFS Hub.
Nigeria received nearly $21 billion USD last year in remittances according to the World Bank. Over 30% of that amount was received from other countries in Africa, primarily neighbouring West and Central African countries. Intra-African money transfer is notoriously expensive, with costs averaging 20% of transfer amount, compared to global averages of 7%. Discouraged by high fees from the cumbersome formal banking and money transfer channels, many turn to informal channels that carry higher risk and uncertainty. Leveraging mobile wallet technology and vast agent networks, MFS Africa and Paga seek to bring these costs down while increasing accessibility and transparency.
Jay Alabraba, co-founder and Director of Business Development of Paga, said: “People typically think of remittances into Nigeria in terms of flows from Europe and the Americas, but there’s over $3 billion USD a year coming in just from the Nigerian communities in Benin, Niger and Cameroon – countries that are right next door to Nigeria. By joining the MFS Hub, we make it easier for Nigerians in the diaspora to send money back home and we also enable them to pay directly for utility bills, goods and services in Nigeria.”
In Nigeria, unlike most African markets, mobile network operators are not permitted to offer financial services. Although banking penetration is over 20%, there is still a strong need for alternative, simpler payment services and financial inclusion. Paga today has over 6.4 million users and a network of nearly 12,000 agents across Nigeria. The Paga wallet is available to any Nigerian with a phone through Paga’s USSD code, and it is integrated into the country’s financial services infrastructure so that users can instantly send to or receive money from other phone numbers or bank accounts.
“For the last few years, everyone has been looking to the Nigerian market, wondering when and how mobile money would take off,” said Dare Okoudjou, founder and CEO of MFS Africa. “There’s an obvious opportunity here and Paga’s commitment to the market and innovative approach to execution will guarantee we make the most of it.”