Foreign
A combination of rapidly evolving technology and the restrictions imposed by the COVID -19 pandemic has resulted in nothing short of a revolution in the online money transfer sector.
Globally, there have been drastic shifts in how people pay for goods and services, with electronic payments increasingly displacing traditional cash and more recently, cryptocurrency and digital currencies emerging in the market1.
In Zimbabwe, the use of mobile money has become pivotal to the way that citizens interact and exchange money during the pandemic. The number of active mobile money subscribers in the country increased from 4.05 million to 4.13 million in 2022.
According to the Reserve Bank of Zimbabwe, mobile money interactions witnessed a steady upward trend with average monthly growth of 21% and 16% in volumes and values2. This movement has been truly significant at all levels of society, with users taking advantage of the rapidly evolving technologies of mobile wallets and contactless cards to make payments and move their money around the globe.
According to the World Bank, mobile money accounts drove a massive increase in financial inclusion in Sub – Saharan Africa as two–thirds of adults worldwide now send or receive digital payments, with the share in developing economies increasing from 35% in 2014 to 57% in 20213.
For many in Western society, the acceleration in technology makes for an easier and more convenient experience when dealing with digital remittances. However, for those citizens of emerging countries, the innovation and growth surrounding the global payments sector is resulting in a wide range of benefits.
Digital remittances are a lifeline
Remittances hugely sheltered many Zimbabwean families from the challenging economic situation that COVID-19 brought over the last few years, with remittances sent to Zimbabwe surging from about US$ 1 billion in 2020 to US$1.4 billion in 2021. The country also hit record-high foreign currency inflows of US$9.7 billion during that period4 .
With statistics like that, it is essential that adequate systems are put in place to make money transfers a secure and straightforward procedure. Online money transfers help countries gain financial inclusion in emerging markets, thus improving economic development and alleviating poverty.
Banking for the unbanked
According to the Reserve Bank of Zimbabwe, the number of financially included Zimbabweans reached 83% this year, with about 12.45 million now on banking platforms through various systems, including mobile money. This comes after 14 tough years for Zimbabweans, who first grappled with domestic currency shortages before the local currency crashed in 20085.
Until recently, migrant communities faced several stressful challenges when sending money abroad. Long queues, unfamiliar paperwork, and sky-high fees were usual hurdles at the beginning of a transfer that could take weeks to process. Once the money had finally reached its destination, the recipients needed access to banks or shops to collect their cash.
Today, with digital payment services like WorldRemit, people can receive money in a matter of minutes through airtime top-ups, cash pick up, and transfers to their EcoCash mobile wallets.
These options that allow people to choose how to receive their money are essential in countries like Zimbabwe here in sub-Saharan Africa, where a significant proportion of the population remains unbanked.
Fortunately, this choice is facilitated by a boom in cheap and widely available smartphones that allow consumers and small enterprises to transfer money at the touch of a button seamlessly. Aided by FinTech vision and investment, Africa has become a world leader in mobile money. Again, the economic upshift facilitated by the new technology has contributed to a drop in the number of households living in poverty.
A safe and convenient service
Digital payments service, WorldRemit uses industry-leading technology to enhance protection for online money transfers. This technology is also swift, meaning that most transfers are ready within minutes.
The increase in secure digital remittances, especially mobile-to-mobile transfers, has lowered the need for cash transactions. Consequently, opportunistic crime in many cash-heavy markets has been reduced, however, cybercrime remains a very present threat, which money transfer companies must work hard to combat.
Moving forward together
The transition to digital payments and online money transfers has positively impacted migrant communities and emerging countries. This transition has made the process of sending remittances easier and more secure. It has also lowered the barriers to financial inclusion in emerging countries by allowing people without bank accounts to receive money quickly.
By offering flexible ways of sending and receiving money, more people worldwide can access financial services and ultimately free themselves from the manacles of poverty.
Find out how WorldRemit can help you move your money around with online digital payments.
By Susan Sitemere, Country Manager, Zimbabwe, and South Africa, WorldRemit.
A.I
Tags: EcoCash mobile wallets Susan Sitemere WorldRemit
