For many people moving money across borders, the remittance corridors that link African countries to the economies of Europe, the Middle East, and the United States serve as a vital lifeline. In an effort to make transfers quicker, less expensive, and more simple, a new wave of FinTech companies is now actively battling the supremacy of traditional cross-border money transfers like Western Union and Moneygram.
Through tailored solutions that take into account the unique demands of economic migrants, emerging FinTech companies are delivering value to clients. General manager for new products at the international FinTech company Remitly, Dan Webber, recently said that this is an underrepresented customer base. Getting access to a bank account is more challenging. It hurts to present this kind of documentation in bank branches.
Remitly allows African migrants to transfer payments to mobile money accounts and wallets across over 20 countries throughout Africa, through MTN, M-Pesa, Airtel, Vodafone, and Tigo, whereas other money transfer businesses concentrate on app-based, digital solutions. Additionally, recipients have the choice to obtain money in cash through partnerships. Remitly has agreements in place with banks and post offices in a number of regional marketplaces.
Small- to medium-sized businesses- SMBs in emerging economies, particularly Africa, have different challenges and barriers in business-to-business (B2B) cross-border payments than migrants, although many of the fundamental problems are still there.
The most significant of these is the challenge of paying suppliers in numerous currencies from these economies while limiting foreign exchange (FX) fluctuation. The B2B currency exchange marketplace and multicurrency wallet product from London-based FinTech VertoFX help businesses overcome this challenge by enabling SMB clients to convert money from one currency to any of the additional 30+ currencies that Verto has on its platform and retain the new currency in their wallet till they are ready to make a payment.
This implies that a customer in the UK, for instance, who wants to pay suppliers in South Africa, Kenya, and the US in the future can do so using the virtual wallet by translating sterling into each of the 3 local currencies and making the transactions when they are ready to do so.
The ability to eliminate price and rate unpredictability is why the characteristic has been so well-liked by VertoFX’s SMB clients, according to co-founder and CEO Ola Oyetayo of VertoFX. That way they remove FX rate risk because they are able to determine what the rate is to convert into SA rand, Kenyan shillings, and U.S. dollars, Ola said.
Additionally, with global inflation continuing to climb, managing FX volatility is undoubtedly a crucial aspect of fostering corporate growth in these tumultuous economic times.