November 9, 2016

Mobile Money cuts international remittances cost by 50%

Written by Adeyemi Adepetun

This post originally appeared on The Guardian.

Nigeria, other SSA countries to receive $34 billion by December

Mobile money operation is seen to be having a positive impact on international remittances transactions across the globe, according to a new report.

Now available in 93 countries including Nigeria, mobile money drives financial inclusion by allowing millions of previously unbanked and underbanked people to access formal financial services.

The Global System for Mobile telecommunications Association (GSMA) in a report released on Monday and made available to The Guardian, informed that mobile money services are available in 85
per cent of countries where the number of people with an account at a financial institution is less than
20 per cent.

Additionally, where people were able to send remittances from a mobile money account, the average cost of sending $200 was 2.7 per cent, compared to six per cent when using global MTOs. Lower transaction fees can translate directly into additional income for remittance recipients.

GSMA pointed out that mobile money services (covering 170 million mobile money accounts) offered customers the ability to send money across 45 country corridors, a number which is growing quickly year-on-year.

Interestingly, the body revealed that most of these corridors are between African markets where alternative formal remittance channels have a limited presence and can be particularly expensive.

According to World Bank in the report, more than 250 million people live outside their country of birth and regularly send money home, providing a financial lifeline to their families and contributing to the economies of their home countries.

World Bank revealed that in 2015, global remittances totalled $581.6 billion, of which $431.6 billion, or nearly 75 per cent, was sent to the developing world. It stressed that international remittances play a critical role in the economies of developing countries.

Read full story>>