Mobile money deals with major international players are clearly the order of the day in sub-Saharan Africa at the moment. The latest announcement highlights a service for Tanzanians living abroad.
Vodacom Tanzania has partnered with online money transfer service WorldRemit to enable ten million M-Pesa customers to receive money directly to their M-Pesa wallets from friends and family living abroad.
The new service, say the partners, increases convenience for money transfer recipients in urban and rural areas of Tanzania as they can receive international money transfers directly to their phones, without the need for a bank account or internet connection.
Using the WorldRemit app, Tanzanians living abroad in over 50 countries, including the US, UK and Canada, can send money home at any time with just a few taps. They do not have to travel to a traditional money transfer agent and pay expensive fees to send money home in cash. WorldRemit is connected to over 190 million accounts across 30 countries.
This a lucrative, but not always appealingly priced, market. The partnership quotes findings from the World Bank, which says that migrants from sub-Saharan Africa sent $46 billion back home in 2018, a growth of 10 per cent compared to the previous year. The majority of money transfers to Tanzania are sent through banks, which often charge high fees and can take several days to process payments.
Again according to the World Bank, the average cost of sending £120 (about $155) from the UK to Tanzania is almost 9.5 per cent. WorldRemit says its fees for the same amount start below two per cent. In addition to its mobile money service, the company also offers bank transfer, cash pickup and mobile airtime top-up to Tanzania.
Does this announcement signal a growing trend for major names to become involved in the African mobile payments business? This year we’ve heard about a partnership between digital payments company Visa and the pan-African fintech company MFS Africa, while Airtel Africa has announced a partnership with Mastercard that will give over 100 million Airtel Africa mobile phone users across 14 African countries access to Mastercard’s global network.
