Cross-Border Payments – Concerns and Opportunities
Last year we saw the launch of both the PAPSS payment system from the Afreximport Bank and TCIB by BankServAfrica. These initiatives, both pilots at present are designed to reduce costs for remitting money within Africa. However, according to a report from WorldRemit, a global digital remittance company, Kenyan diaspora residents have either reduced or cut the amounts of money they send back home due to the high cost of remitting funds. The report noted that 82% of respondents agree that the cost of remitting money has increased significantly, leaving 45% to only send money to immediate family rather than to friends and distant relatives. The report also noted that globally, one in nine people rely on money sent from friends and relatives who have migrated abroad for work. The study, which was conducted in October 2022 and surveyed 2,687 respondents, aimed to assess the impact of the increased cost of living on international money senders. In addition to the negative impact on Kenyan diaspora’s ability to support their loved ones, the high cost of remitting money has also led to a trend of taking on additional jobs in order to support an increased cost of living. This was reported by a significant percentage of respondents in the US, UK, and Australia, with 89% of those with additional jobs indicating that they would continue to maintain them in the coming year.
Meanwhile, Nigerian startup Raenest is helping remote workers and freelancers automate invoicing and get paid faster by clients globally while saving on fees via its Raenest Global accounts and cards. Businesses can use the Raenest platform to onboard African talents, pay them in their preferred currencies, and manage their team expenses. Launched in March 2021, Raenest now has more than 100,000 employees, independent contractors, freelancers, and creators using its platform. It offers full-time employee and freelancer support in Nigeria, as well as contractor support across Africa. It plans to expand to Ghana, SA, Kenya, and Egypt in 2023. Raenest raised a pre-seed funding round in early-2022. The company was also selected to take part in the latest edition of the Techstars Toronto accelerator, securing access to mentorship, US$120,000 in funding and the opportunity to secure further investment.
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