As migrants from South Africa’s neighbouring nations face high fees and complex processes when sending money home to their families, a partnership between Capitec Bank and remittance fintech, Mama Money, aims to dramatically reduce the cost and simplify sending money across borders for South Africa’s 2,4 million migrants.
According the bank, the collaboration addresses a critical need in South Africa's financial ecosystem, targeting migrants from Kenya, Lesotho, Malawi, Mozambique, Uganda, Zambia and Zimbabwe for cost-effective cross-border payments.
Migrants regularly send billions in remittances across Africa to avoid prohibitive bank fees charged by traditional banks.
According to DAI Magister, an investment bank, the continent’s formal remittance market, valued at $100 billion in 2022, could potentially reach $283 billion by 2035.
Traditional bank transfers often cost between 8%-12% in fees, while Mama Money via Capitec starts from 5%, with processing taking minutes instead of days, noted Capitec.
Capitec customers can access Mama Money's remittance platform directly through their mobile banking app, using the Universal Mama Money Token. Recipients receive a 12-digit token via SMS, allowing them to collect cash from partner locations, including banks and agents across over 70 countries without requiring a bank account.
Mathieu Coquillon, co-founder of Mama Money, said the platform shares Capitec’s ambition to roll out low-cost financial services to impact customers’ lives positively.
“It’s about more than convenience – it's about dignity and fairness for people who work hard to support their families. When someone earning minimum wage has to pay R150 in fees to send R1,000 home, that's money taken directly from a family's food budget."
Francois Viviers, group executive of marketing and communications at Capitec, stated that the partnership was born from a deep understanding of the challenges millions of people living and working in South Africa face.
“We live on a connected continent, where the age-old tradition of supporting family and community is a fundamental part of our culture. Yet, sending money across borders has been expensive, complicated and stressful for millions. We see an opportunity to apply our ‘simple, affordable and transparent’ banking ethos to this problem. Our clients work hard for their money, and they deserve a solution that safely and affordably delivers more of that money to where it's meant to go.”
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