The Digital Remittance Revolution in South Africa: challenges and next steps for Africa's largest cross-border payments market

Technoserve | Technoserve

Cross-border remittances originating from South Africa are of particular importance on the international stage. Nearly $2 billon is sent every year from South Africa to Southern African Development Community (SADC) countries, making it the largest inter-Africa remittances market. Sending remittances from South Africa is traditionally expensive, with an average cost per transmission (or “send”) of 18 percent of the total remittance along formal channels, compared with a global average of approximately 10 percent. Sending along unsecured, informal channels can incur even higher costs – especially when adjusted to reflect the risk of loss – as these channels are not secured or regulated. Despite the digital revolution, 60 percent of remittances sent from South Africa travel on informal channels due to a number of barriers to adopting formal remittances services. By acting in a coordinated way, the multiple actors in this market have the potential to capitalise on over $1 billion in uncaptured send value.

Categories:
South Africa, Remittances, Financial Infrastructure, Access to Finance, Mobile Banking, Informal Finance, Financial Capability
Pages:
15
Year of publication:
30.11.2016
External Document: