By Gbenga Okejimi, Country Manager, Ghana, and Nigeria
Over the past year, remittances have continued to be a vital source of foreign income in many developing countries across Sub – Saharan Africa, contributing significantly to changing the lives of millions of people1.
This year, remittance flows to Ghana are expected to grow to about $4.5 billion, positioning Ghana as one of the highest recipients of remittance inflows in Africa2. Money transfers from Ghanaian migrants overseas have been crucial in enabling many to build resilient households as they have been able to access healthcare services, quality education, and provide food for their families.
With close to over 6.8 million people living below the poverty line in Ghana, and the incidence of multidimensional poverty in urban areas standing at 27% and 64% in rural Ghana, remittances have significantly helped accelerate poverty reduction3.
According to the latest 2022 year-in-review by World Bank, remittances in Sub-Saharan Africa grew an estimated 5.2% to $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 environments4.
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 Ghanaian economy.
With these factors in mind, remittance expert Gbenga Okejimi, Country Manager, Ghana and Nigeria, WorldRemit, shares his top market trends for 2022 and beyond.
Remittance growth continues
As the preference for digital tools and services to conduct money transfers increases, digital remittances will continue to grow steadily throughout 2022. As of 1 June 2022, WorldRemit users globally sent more than GBP 145 million back home to Ghana.
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 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.
On the receiving side, WorldRemit supports Ghana by providing a robust network of cash pick-up locations with our partners for greater convenience and accessibility. All connections through our website and mobile app are secure and encrypted. We have also built a sophisticated automated machine-learning system for fraud detection.
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.
Our technology at WorldRemit allows 90% of money transfers sent to Ghanaians to be ready within minutes5.
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 at a global scale 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 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 are prioritising safety and looking for a simple, straightforward solution for their transactions.
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.