The Era Of Remittance Applications In Nigeria

Ekene Eyimegwu

3 years ago

Nigeria had close to $25 billion in annual remittance in 2019. During the start of the Covid -19 pandemic, the total remittance to Nigeria dropped to $3,373.09 million in the second quarter of 2020 from $5,629.04 in the first quarter of 2020. The World Bank has projected $17.6 billion Diaspora remittances into Nigeria in 2021, representing a 2.5 percent increase from $17.2 billion recorded in 2020.

Read more about FinTech

Remittances in Nigeria increased to 4,922.23 USD Million in the second quarter of 2021 from 4,278.12 USD Million in the first quarter of 2021. Remittance to Nigeria & Africa is expected to grow in the coming years as the global economy steadily recovers from the Covid-19 pandemic. Remittance refers to the payment of money that is transferred to another party. However, the term is most constantly used nowadays to describe the sum of money sent by someone working abroad to his or her family back home.

Many online transfer services like WorldRemit, Transferwise already offer remittance services to diaspora looking to transfer money to Nigeria. This large size of the market will draw more competitors into Nigeria with custom remittance & money transfer services. Local payment apps & gateway like Paga, Flutterwave, etc, have also started to offer money transfer services, and this is expected to reach an even wider number of rural users.

Overall, the internet coupled with smartphones has made almost everything hassle-free and at everybody’s fingertips. Sending money from one country to another has also become easier. In the past decade, the only way to send money to Nigeria was through credit unions like Western Union but this technique has a lot of problems, like huge transaction fees and the back and forth of going to a bank. With the adoption of fintech and cryptocurrency, sending money from one country to another has become easier. But at the same time, it might be difficult in Nigeria because of the strict money transfer requirements that have been put in place to curtail money laundering. There are charges associated with transferring money to another country, so there is a need to cross-check fees before using any platform. The best platform will always offer reasonable rates that will be convenient to users. Another point to consider in transferring money is the issue of Security. There is a need to ensure that while doing transactions, the details are protected, through very strong encryption between devices. The following are mobile applications built by Nigerians for remitting/transferring money into Nigeria.

1. Paystack

This is a payment company operating in Nigeria and other parts of Africa. Founded by Ezra Olubi and Shola Akinlade after witnessing the inefficiencies of payment processing in Nigeria. Although Paystack is not necessarily a money transfer service, it offers a way for anyone outside Nigeria to send money to people in Nigeria who have a Paystack account. if the person you want to send money to in Nigeria has a Paystack account, they can send you a payment link that they can create in their Paystack dashboard. You’ll have to make the payment with a debit or credit card. Paystack is used by Nigerian businesses, creatives, and freelancers to collect payments worldwide. Paystack is a good alternative to money transfer services and their issues.

2. Flutterwave

This is a money transfer service that allows people with Flutterwave accounts to receive funds from anywhere in the world with a payment link. The company was founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya with headquarter in San Francisco, California, and operations in Nigeria, Kenya, Ghana, South Africa, and seven other African countries. With Flutterwave, entrepreneurs in over 40 African Countries can accept payments in 150 currencies including Euro, and USD. It is perfect for entrepreneurs wishing to retain foreign currency like the United States Dollar or Euro as they can request pay-outs to foreign currency accounts.

Sign up to the Connect Nigeria daily newsletter

3. Paga

Paga is a free mobile application that enables users to conduct free financial transactions such as making payments, sending, and receiving money. Founded in 2009 by Tayo Oviosu, the company processed $2.3 billion worth of transactions in 2020 and $8 billion during the past four years. It has 17 million unique users including tech entrepreneurs, businesses, and individuals in Africa’s most populous nation. Paga has over 27,000 agents across the country who perform similar roles like bank tellers with many retail outlets where consumers can access services like bill payments and other types of transactions. Paga is also making its programming interface available to tech entrepreneurs for payments while expanding its consumer business through its partnership with Visa. The company crossed N3 trillion in transaction values processed since the company started operations in 2012. They reached N2 trillion in March 2020 and N3 trillion in May 2021. It is available in the google play store and iOS play store.

4. Lemonade

This is a Nigerian fintech founded in 2020 by Ridwan Olalere and Rian Cochran and a participant in Y Combinator’s W21 batch last year. Lemonade Finance allows Africans abroad to send and receive money from their home countries in efficient, affordable, and fast ways. Its app allows users to hold their balances in the currencies that matter to them, easily converting one to the other. The company offers local and international transfers to Ghana, Kenya, Nigeria, Canada, and the United Kingdom (UK) instantly without hidden fees, and makes international transfers at the real market exchange rate. The difference between lemonade and other remittance applications is that it allows Nigerians and Africans to send money abroad not just receive. It is available on google play store and the iOS App store.

5. Grey

Grey, money conversion and exchange platform, was founded by Idorenyin Obong and Femi Aghedo in July 2021. Grey allows users to open a virtual global bank account for free to receive and make foreign payments or convert currencies all in one place. This platform makes it easier for Nigerians to receive pounds and dollars from anywhere in the world. For now, Grey only provides European currency-denominated accounts (Pounds and Euros). It is currently working on adding USD accounts.

Featured Image Source: iStore

Got something you want to read about on our platform? Contact us: editor@connectnigeria.com