Cross-border payments are an integral part of operations for individuals and businesses in Africa. But when it comes to transferring funds across the 54 countries, it becomes challenging. According to a report, 320 million mobile money wallets have reached and covered 60% of all wallets in sub-Saharan Africa. Still, many companies declared that there are still more grounds to cover, and 320 million people indicate that the issue is not the fragmentation of markets.
Instead, cross-border payments is a regulatory fragmentation that hinders due to lack of trust between governments and central banks in the region. Therefore, until that is resolved, transfers will keep moving through U.S. dollars or the euro. Furthermore, it will require more stringent processes in screening and due diligence for politically exposed persons (PEPs). Simultaneously, all merchants and agents will be screened against commercial databases and PEPs to recognise them.
Expanding to New Horizons
Pan African Payment Settlement System (PAPSS) facilitates instant, cheaper and seamless cross-border payments in local currencies. Thereby bridging differences between central banks concerning how to look at risks, markets and transactions.
Read: Digital Remittance Companies are Becoming the Banks of Tomorrow
Penetration in the West African market took ages to update itself, but regulatory setbacks played a pivotal role in that delay. Major telecommunications networks received conditional approval to operate mobile money services in Nigeria for the first time. Hence, marking the initial step toward obtaining final licenses from the country’s central bank, allowing providers to offer remittance services and accept deposits, among other benefits.
These licenses acted as a gate pass for entering any country. Deploying mobile money agents is enough because digitising cash by accepting cash and delivering cash-out services in missing areas of ATMs and bank branches makes them the real giants on which mobile money stands.
Upcoming partnerships between the agents and companies are observed in today’s time. The main agenda is to connect the African diaspora in Europe, the U.K., Canada and the U.S. with mobile wallets. Small and medium-sized businesses (SMBs) clients are looking for ways to facilitate payments to the Asian country, Africa’s largest trading partner. The ultimate plan is to wire up Africa and hit 500 million mobile money users by reaching 54 African countries onboarding over a million SMBs across the continent.
The Mobile Wallets-Cryptocurrency Link
According to the researchers on cross-border remittances, it announced that consumers’ demand for affordable and convenient alternatives provoked them to turn to virtual currencies in the wake of the pandemic. Furthermore, researchers added that those who now use cryptocurrency to send cross-border remittances are frequent adopters of innovative payment methods like mobile wallets.
Therefore, the link between mobile wallets and cryptocurrency is witnessed more in countries like Nigeria and Zimbabwe, where regulation makes it onerous for people to move money. Likewise, many researchers overestimated innovations such as blockchain technology in the short term and underestimated them for a long time. Accordingly, the potential to streamline cross-border payments will produce more clarity and insight as we move forward with many possibilities. Every company in Africa has its R&D department to conduct its research and development to comprehend the possibilities of advancing cross-border payments.
Conclusion
Using a digital payment wallet is beneficial in developing countries, mainly where the traditional banking system is less mature and getting access can be challenging at times. Therefore E-wallets are the safest and secure solution to replace the conventional norms. Surprisingly, the value of digital remittances is expected to reach $109m in 2021. The growth is predicted at a CAGR of 11.17% to reach a value of $166m by 2025. Well, ATL Money Transfer is a leading money service provider. We address your issues regarding transferring money from one corner of the world to the other. With us, we send cash with care with three simple steps. We give you peace of mind with our Instant mobile services, Cash Pickup, and Bank deposit services. To know more about us, visit: https://www.atlmoneytransfer.com