The Pew Research Center has collected data surrounding how much money flows in and out of countries the world over. In 2016, Nigeria received more than $5.6 billion in remittances from the United States alone. During the same period, Egypt received more than $850 million, Ghana received more than $580 million, and Kenya received more than $510 million, again, only from the U.S.
Money flows out of the continent too – South Africans sending more than $360 million to the UK in 2016 serving as a good example.
Africans residing outside of the continent have different reasons to send money back home, some of which include sending money to family, paying off loans, and making investments. Likewise, reasons to send money to foreign countries also tend to vary. What connects both scenarios is selecting the right service provider.
Banks vs. Overseas Money Transfer Companies
Banks continue to lose out on their share of the overseas remittance pie and with good reason. Banks have traditionally charged steep fees for processing international money transfers and they still tend to offer less than favorable exchange rates. Besides, carrying out overseas money transfers is only one aspect of a bank’s functioning.
Several specialist money transfer companies now offer stiff competition to banks, some of which include TransferWise, HiFX, WorldFirst, WorldRemit, and OFX. They not only offer bank beating rates consistently, they charge little to no fees. Consider this – if you send $200 to Nigeria from Australia using a specialist money transfer company instead of a bank, you can save around $15.
Aspects to Consider
Whether you’re sending money to Nigeria, Ghana, Kenya, or any other country in Africa, and even if you wish to send money outside of Africa, factors that require your attention are basically the same.
- Supported Countries. Start by determining which companies support the countries in question. There are companies that do not support transfers in and out of a few African countries, so this aspect requires your particular attention. Some of the countries that are subject to restrictions include Congo, Cote d’Ivoire, Libya, Rwanda, Sierra Leone, Somalia, and Sudan.
- The cost of your transfer depends on the exchange rate you get and the fees you pay. To keep it simple, look at how much money the recipient stands to receive at the end of the process.
- Transfer Methods and Turnaround Times. If you want the recipient to receive money in a hurry, your best bet is to turn to a money transfer company that has a physical presence in Africa. Some of your options include WorldRemit, Azimo, and Western Union. While transfers to cash pickup locations tend to take place almost immediately, transferring money to a bank account in Africa may take two to seven or more working days. However, the former tend to cost more.
- Payment Methods. How you wish to pay for your transfer may have a bearing on the company that works best for you. All prominent companies let you pay via bank account transfers. However, not all accept payments via debit cards and even fewer let you pay using credit cards. Some, on the other hand, also accept payments via other region specific methods such as POLi, SOFORT, and iDEAL.
Don’t Forget Customer Service
You might need to contact customer service, especially if you plan to carry out transfers regularly. Almost all companies provide online support, either via chat or email, and some even offer over-the-phone support. An easy way to determine which companies score well on this front is to look at what their customers have to say on online platforms such as Trustpilot and Feefo.
Moving money in and out of Africa is no longer as costly or time-consuming as it was until a couple of decades ago. With increased competition in this field, costs are expected to drop further, and people can expect better service as well. Selecting the right money transfer company is fairly easy, provided you pay attention to a few simple aspects.