Amidst the growing ‘japa’ trend fueled by increased emigration from Nigeria, the necessity for cross-border payments within the country has become more prominent. This includes parents sending funds for their children’s education abroad and migrants abroad remitting money back home.
The demand for efficient cross-border payment solutions in Nigeria is on the rise, spurred by expanding international trade, growing diaspora remittances, and the increasing number of Nigerian businesses with global operations.
Various companies have recognised these opportunities and are actively addressing these needs. The development of the Pan-African Payment and Settlement System (PAPSS) seeks to facilitate faster and more affordable cross-border payments between African countries, thus breaking the currency barrier and fostering smoother trade relations.
In this changing landscape, the introduction of fintech companies has significantly transformed cross-border payments, making them more accessible and cost-effective. Here are some of the prominent platforms in Nigeria that facilitate cross-border payments across Africa and globally:
- Flutterwave’s ‘Send’ platform enables users to transfer money to over 30 countries, including the US, the UK, Europe, and several African nations. The solution, initially launched in 2021, was revamped in August this year, incorporating support for transfers from the US and Canada and expanding the list of recipient countries, such as Egypt and Senegal.
- Afriex is a specialised money transfer app founded by Tope Alabi and John Obirije in 2019. Raised a $1.2 million seed funding in 2021, the Nigerian and African-focused fintech startup simplifies cross-border transfers to and from Africa, particularly designed for immigrants. Users can send money to seven countries, including the US, UK, Canada, Nigeria, Ghana, Uganda, and Kenya, directly to bank accounts or mobile wallets in local currencies. Afriex supports various payment methods and charges for withdrawals, with a daily transaction limit of $3,000.
- LemFI is empowering immigrants worldwide with its cross-border money transfer platform that caters to the African diaspora. This fintech company provides users with accounts in both their country of residence and origin, enabling seamless personal and business banking services. LemFI allows zero-fee money transfers to over 20 countries, including Canada, the UK, the US, Ghana, Nigeria, and Uganda, with a weekly transfer limit of £5,000 ($5,906).
- Africhange is a money transfer platform facilitating easy transactions between Africa, North America, and beyond. While currently serving Canada, Nigeria, and Australia, Africhange aims to expand its operations globally, ensuring swift transactions and competitive exchange rates for users. The African-Canadian remittance platform, which partnered with Bitso in September 2022, understands that remittances sent back home play an important role in people’s lives, and cutting transaction costs significantly helps recipient families.
- Payday, a Nigerian Neobank is known for its virtual card service and focuses on simplifying cross-border payments for Africans. Having raised $3 million in March, the app allows the creation of virtual accounts in various currencies, enabling hassle-free online shopping and efficient money transfers without hefty fees. Payday operates globally, with its headquarters in Rwanda and branches in Canada, the USA, and the UK.
- Formerly Aboki Africa, Grey Finance is a Nigerian fintech company that provides foreign banking services to Nigerians, Kenyans, and Tanzanians, aiming to streamline international payments for freelancers, remote workers, and digital nomads. With the support of Y Combinator and other investors, Grey Finance prioritizes simplicity in international transactions.
- Kyshi, a fintech startup, facilitates peer-to-peer money transfers and currency swaps between the UK, the US, and approximately 20 other African countries. The platform ensures flexible payment fees, typically not exceeding 3%, without any setup or maintenance charges. Kyshi was one of the Nigerian startups that dominated the list of recipients of the 2022 Google for Startups Black Founders Fund in Africa.
It is important to note that besides these local platforms, international services such as WorldRemit, PayPal, and Payoneer also offer cross-border payment solutions to Africans. However, these services may come with certain restrictions. For instance, while personal Nigerian PayPal accounts can send payments, they cannot receive them. On the other hand, WorldRemit allows Nigerians to receive money from other countries but restricts their ability to send funds.
