WorldRemit is an international transfer service, predominantly used by migrant workers to send money home to their friends and family all around the world. It was founded in 2010 by Somali-born Ismail Ahmed, who became frustrated by the exorbitant fees charged by money transfer services.
Since then, the business has gone from strength to strength, and today it is available in over 50 send countries, to over 140 receive countries. The company was also named the UK’s fastest-growing technology company in the Deloitte Technology Fast 50.
Alix Murphy, the Director of Mobile Partnerships at WorldRemit talks us through how she helps WorldRemit’s expansion into new markets, mobile money, the role of cash in financial inclusion and the work they are doing with KCB.
You have been forging partnerships and expanding your business globally at a very fast rate. How are you able to expand and roll-out your services at this rate?
It’s true, at WorldRemit we’ve gained rapid momentum over the past few years. It’s because we’re one of the only businesses in the world to provide a digital-only service across so many geographies. Most of our partners recognise this and understand the appeal for customers to send money straight from their mobile phone.
Most of our competitors focus only on a few specific markets or regions, but customers can send instant remittances from the WorldRemit app in 52 countries to over 140 receive countries. Even though big players like Western Union are moving into the digital space, their app is only available in 11 countries.
Today we’re seeing the fruits of many years of hard work. It used to be that WorldRemit had to go seek out companies to partner with, but now these businesses are the ones coming and knocking on our door wanting to partner with us!
According to a report from the World Bank, over 2 billion adults don’t have access to basic banking. With your business being reliant on technology and access to financial services, how does that impact your business? Especially in the emerging and frontier markets?
While two billion adults aren’t enrolled in a formal bank account, many of them do have access to a mobile device. It doesn’t need to be the latest smart phone – a feature phone is all they need to gain access to a financial system.
That’s why WorldRemit has pioneered partnerships with mobile money services, which enable users to pay for all manner of things, from groceries, school fees to utility bills from a feature phone. Mobile money accounts are rapidly expanding the functions that traditional bank accounts offer. Users can have their salaries and pensions paid into a mobile money account, and there are services in Africa that enable users to accrue interest on their savings, build up a credit history, and even take out small loans.
Mobile money technology is used in 85% of the countries that have limited access to financial services. It is expanding into the developing world at such a rate that 19 countries have more mobile money accounts than bank accounts.
The appeal of mobile money has had a huge impact on our business – we’re processing over 70% of cross-continental international transfers into mobile money accounts globally.
How are you using mobile money to boost financial inclusion in Africa?
Cash is a threat to financial inclusion, as users have to store it away or keep it on their person. Mobile money provides a more secure way to make payments, because these payments are digitised, every transaction is accounted for, making it tougher to get into the wrong hands.
It’s come to mean that mobile phones are more prevalent than basic bank accounts in Africa. By enabling people to bank in the same way via a mobile as they would with a traditional bank, customers in Africa fully feel the benefits of financial inclusion.
The same goes for international remittances. By enabling our customers to send remittances directly to mobile money accounts, we’re helping those without bank accounts to receive money safely, while making it tougher for remittances to go to the wrong people.
The growth of mobile money, and the financial inclusion that occurs as a direct result, becomes self-perpetuating. As mobile money rapidly becomes the preferred payment method, it results in more vendors and organisations in Africa offering this transaction method as a way to pay for their services and products. In turn, more and more mobile providers begin to recognise that offering a mobile money service could be commercially viable for them, and enter the market too.
What kinds of progress have you made and what are the results?
Mobile money has had a huge part to play in driving financial inclusion around the world, but Africa is our biggest receive market for these types of transactions, with Kenya, Zimbabwe, Ghana, Uganda, Somaliland, Tanzania, Rwanda and Cameroon sitting in the top ten.
In fact, since launching in Cameroon in 2016, it made the top ten within six months. In the same year, mobile money transfers to Rwanda grew by more than 450%, and Tanzania and Somaliland reached the 10,000-transaction monthly threshold – both countries tripling the number of transactions made.
These figures show the clear appetite for mobile money within the continent, which are driven by the fact that mobile money offers a safer way to manage money, is more convenient, and gives those with an account more autonomy over their finances.
What else can it be done to make even more impact and who should be getting involved in these initiatives?
There’s a lot more that still needs to be done to ensure the benefits of digital remittances are understood and experienced by those who need them most.
However, regulators in many countries have understood the immense value that digitising remittances can bring to an entire economy. Cash is the most dangerous method for sending and receiving international remittances because it’s so anonymous. But if money is received instead into a registered digital account such as a mobile money, it means there’s an electronic record of every transaction. In turn, these digitised remittances result in a safer economy, and a more efficient financial system whereby users are encouraged to pay for everyday items via electronic payments.
Are there particular policies that are in place to help you make this a reality? If not, what kinds of policies would help?
Unfortunately, not every country allows their diaspora to send international remittances to mobile money accounts. It’s a shame, because not only does it cut off a large portion of the population from receiving remittances safely from abroad, it also means that the diaspora is left with fewer options for sending these much-needed funds back into their home country. When fewer transfer companies operate in one market, it results in monopoly that enables them to charge higher fees to the customer.
The most important thing to help improve this situation is to look at examples from other countries where international remittances to mobile money is working extremely well. In countries like Kenya or Ghana, for example, the introduction of remittances to mobile money has transformed the entire remittances sector. For example, today, more than 90% of the $10 million WorldRemit sends each month to Kenya is received into mobile money accounts.
How did you use Mobile Money to provide a solution for the cash crisis in Zimbabwe? What example can you provide?
As well as printing bond notes in a bid to inject more currency into circulation, the government heavily promoted digital services such as mobile money within the country. As mobile money provides a way to transact that’s completely removed from these physical notes, it proved to be very popular during the cash crisis
Before the crisis, nearly half of Zimbabwe’s population was using mobile money. At the height of the crisis, however, the Zimbabwean diaspora was sending remittances to mobile money accounts, rather than to be collected as cash, at a rate of almost 9:1.
What kinds of challenges do you face when rolling out Mobile Money or money transfer programmes and how do you solve them?
The primary challenge we have experienced in this space is that there can be limited understanding of the process for sending international remittances to mobile money accounts. Often, regulators need to be shown the positive impact to individuals and economies that are experienced in other markets, in order to understand the benefits to their citizens.
Likewise, sometimes regulators or banks are not aware of the additional security and compliance enhancements that can be achieved when using digital methods to send international remittances.
You recently partnered with KCB to offer instant money transfers. Can you tell me about this partnership and the impact it is making in Kenya?
Our partnership with Kenya Commercial Bank (KCB) enables the Kenyan diaspora to send instant remittances that can be picked up as cash at KCB branches around the country. The next steps for this partnership will be to enable these instant transfers to go straight into KCB bank accounts. Kenya has goals to completely digitise its economy – we see this partnership playing a part in that.
There are more than three million Kenyans living abroad, and remittances play a key role in the country’s economy, with inward remittances reaching a record value of $146.76m in May 2016. It’s come to mean that Kenya is one of WorldRemit’s biggest receive markets, so this partnership with KCB is very important for us.
You attended Innovate Finance Global Summit a few days ago, which is based in London. Can you tell me about what brings you to an event like Innovate Finance? What were you planning to achieve there?
Attending events such as Innovate Finance Global Summit is great as it enables you to get a greater insight into the fintech community, the innovative products and services this fast-growth industry is creating, and the global problems it is trying to solve.
It’s taken some time, but a key takeaway from the event for me is that in Europe, we’re now starting to see greater focus on finding fintech solutions that serve marginalised or underserved communities. At WorldRemit we’re excited about this shift, as we know how important it is to ensure everyone has access to these basic financial services.