African Tech Voices: remittances promise return in 2023
Over the recent years, remittances have continued to be a vital source of foreign income in many developing countries across Sub-Saharan Africa. Remittance inflows in the continent increased by 14.1% to US$49-billion in 2021, despite the adverse global economic environment.
In Cameroon, money transfers from migrants overseas have been crucial in enabling thousands of households to access good healthcare services, quality education and provide food for their families.
This comes at a time when an estimated 40% of Cameroon's 27.2 million people live below the poverty line. With 3.9 million people in need of humanitarian assistance, remittances in the country have helped accelerate poverty reduction.
In 2022, total remittances sent to Cameroon via WorldRemit were GBP 75-million, buoyed by the rapid uptake of digital remittance technologies worldwide following the COVID-19 pandemic.
According to the latest 2022 year-in-review by World Bank, remittances in Sub-Saharan Africa grew an estimated 5.2% to US$53-billion in 2022, compared with 16.4% last year. However, in 2023, remittances are projected to soften to 3.9% growth as many nations face adverse conditions in the global and regional environments.
All eyes are now on what 2023 will bring for millions of families dependent on remittances each year with the widespread efforts to increase COVID-19 vaccination rates and stabilise the country's economy.
Remittance growth continues
As the preference for digital tools and services to conduct money transfers increases, digital remittances will continue to grow steadily throughout 2023.
This shift towards digital, deeply accentuated by the pandemic, is predicted to continue as many tech-savvy customers opt for affordability and greater convenience.
Safety comes first
It is predicted that money transfer companies will continue to prioritise safety measures above all else. For international markets that enable migrants to send money, more companies will integrate additional features that allow them to validate the identification of their customers, from phones' IP addresses to the validation of identity documents.
Speed will continue to be of the essence
Even though some customers are used to waiting hours or even days for a bank wire transfer to arrive at its destination, expectations for the speed of money transfer apps and platforms are the opposite. With new advancements across the digital landscape, users expect money to be sent and received in minutes.
To deliver the best and quickest customer experience, companies will continue to invest in enhancing their technologies. Hence, data exchange with financial institutions is more seamless, and the flow of remittances is uninterrupted.
Money transfer services that work with API technology, which generates the confirmation that the receiving account or wallet is ready to receive the money, will be able to ensure transfers are completed almost in real-time. In addition, increased communication and tracking features will be integrated globally for users' peace of mind.
The simpler, the better
Companies will focus on making things as simple as possible, with a strong tendency to decrease the number of steps in each money transfer - from downloading the application and creating the user profile to adding the beneficiary. The trend toward more efficiency and effectiveness will ensure sending and receiving money becomes as easy as sending a text.
Digital remittances eliminate the need to go to a fixed payment point, saving users time and money. Living in the uncertainties of a pandemic, senders and receivers prioritise safety and look for a simple, straightforward solution for their transactions.
In Cameroon, technology has gained a more prominent role in people's lives, and money transfers have been no exception. A relatively new industry about ten years ago, digital money transfers and remittances are not only here to stay, but they are also slowly becoming the method of choice for customers by proving that they're just as safe as a bank transfer and much faster, cheaper, and more convenient.