Xoom, PayPal’s money transfer service, has announced that the company’s customers in the US, UK, Canada and Europe can now send secure and convenient money transfers directly to mobile wallets in key markets across Africa with a focus on the underbanked segment.
This new service expands the company’s offering to send money to mobile wallets in Burundi, Cameroon, Ghana, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe—with plans to include more markets in 2021.
Mobile money services are being deployed rapidly across emerging markets as a key tool to further the goal of financial inclusion. Financial inclusion is instrumental in lifting the undeserved population out of poverty—and for driving economic growth. In 2019, the number of globally registered mobile money accounts surpassed the one billion mark. In Ghana, Kenya and Zimbabwe, over 60% of adults have mobile money accounts. This new service expands Xoom’s offerings in Africa as the current service already enables money transfers for cash pick-up, direct banks deposits and mobile reloads to 41 countries in Africa.
“Sending money to Africa through traditional channels has always been expensive. We wanted to help bring down the cost and speed up the process to boost financial inclusion,” said Julian King, Vice President and General Manager, Xoom. “There is nowhere else in the world that moves more money on mobile phones than Sub-Saharan Africa. While there are only five bank branches per 100,000 people as of 2019, there are 1.04 billion registered mobile money accounts in Sub-Saharan Africa.”
The cost of sending money through traditional channels to Africa is one of the most expensive in the world, with an average cost of 9.3%. The cost of sending $200 to the Sub-Saharan African region averaged 9% in 2018 and in the southern African subregion, the average cost was 18.7 percent, almost three times higher than the global average according to the World Bank. Xoom is helping to bring down the cost to significantly with average costs of sending money to mobile wallets in select African markets ranging from 2-4% of the transaction.
The largely cash-based system of sending money to Africa via traditional channels can be full of paperwork, high fees, standing in line and an ever-present uncertainty of when, and if, the money will arrive when it’s needed. By providing fast and secure payment options for customers to seamlessly send money to Africa by using a mobile device, PayPal and Xoom are helping to expand and improve the financial health of millions of people in the African continent.