Consumers will soon enjoy the reduction in the cost of money transfers which could start falling due to increased competition in the money transfer market.Iraj Abedian, a CEO at Pan-African Investment and Research Services argued that the entrance of “new kids on the block” like UK-based Mukuru.com and online operator Mama Money will cause giant firms like Western Union and Moneygram to adjust their prices.
“More competition tends to bring the prices down over time, not immediately,” said Abedian. The main reason of high cost of money transfer was the absence of intracontinental banking convergence and regulation, he said.
Sending money from South Africa to neighboring countries is very expensive especially when sending low-value remittances.
Mama Money, just like Mukuru.com will primarily center on Zimbabweans living and working in South Africa but will later on incorporate other countries.
The company’s remittance rates are %%, no margin is charged on the exchange rate but Mukuru charges 10% of the total amount remitted.
The financial has made partnerships with financial firms in Zimbabwe such as CABS to provide remittance services on the CABS Textacash mobile banking platform.
Plans to establish a relationship with mobile money providers in Malawi, Zambia and Mozambique are in full swing. The company has also established a process of setting up branches in the UK so that consumers can send money into Africa.