Digital money transfer services are now the preferred remittance channel for millions of Kenyan migrants living and working in the diaspora, thanks to their online nature that allows migrants to send and receive on their own schedule, in their preferred way.
Data from Zepz Group shows that its users globally sent almost $2 billion USD to Kenya in 2022 through its two digital money transfer channels, WorldRemit and Sendwave. In comparison, Zepz users sent over $500 million to Zimbabwe, $300 million to Cameroon, and more than $190 million to South Africa during the period, making Kenya a top market for digital remittance flows into Africa.
There are several reasons why digital platforms are more popular for sending money back home than traditional brick-and-mortar channels that rely on a physical presence. Below are the main reasons to consider switching to digital finance solutions for your money transfer needs:
Quick, secure and convenient
Digital transfers are fast and convenient as senders can complete transactions in a few simple steps from the mobile app or web browser and receivers can choose their preference on how to receive the money. Digital transfers are also extremely secure as they are run by licensed and regulated firms, complying with all local authorities. As an example, WorldRemit is licensed to provide international money transfer service in multiple jurisdictions, including the UK, US, EU, Australia, South Africa, among others.
Affordable and transparent
The United Nations has set clear goals to increase sustainability in developing nations, including introducing a target to reduce the average transaction costs of international remittances to less than three per cent by 2030. By doing this, remittance values will increase and the recipient will receive more money to further pay for their daily expenses, medical bills, education and build financial independence.
Currently, World Bank data shows in 2020, the average global cost of sending $200 was 6.5 per cent – more than double the target set by the UN. The benefit of digital remittance services is it does not require the financial upkeep of a physical store and therefore can provide those savings onto customers through competitive fees and rates. Remittance providers such as Zepz Group are consistently looking for ways to keep transfer costs low and on average are almost half the cost (46%) of sending through banks.
Multiple ways to receive money
Digital money transfer services also give those receiving funds multiple payout options; bank transfer (in KES or USD), mobile money, cash pickup and/or airtime top-up. With WorldRemit, for example, senders can make instant transfers to the receivers’ registered mobile money account number.
The process of sending money across borders over digital remittance platforms is simple, fast and affordable. These factors have made digital channels increasingly popular with Kenyans abroad.