Remitly expands remittance network to meet demand during COVID-19

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Remitly has added 11 new mobile wallets to its network, almost doubling its reach to 300 million consumers, to meet demands for cash alternatives amid the COVID-19 pandemic.

Remitly’s mobile wallet recipient remittance network coverage has almost doubled in size to 300 million, up from 160 million in March, through the addition of new mobile wallet partners. It now supports 25 mobile wallets accessed directly through Remitly or its partnership with Thunes, a major payments network for emerging markets. The new and existing mobile wallets cover a number of countries in Africa, Latin America and Asia Pacific, where most of Remitly’s recipients reside.

“What we are seeing is that people are migrating to digital methods to receive remittances, particularly to mobile wallets,” said Nick Moiseff, vice president of product at Remitly. “We’ve experienced 200% growth since January through July in mobile wallet volume. There’s the issue of people not wanting to handle cash due to COVID or that the location where they would have received cash may be closed or have restricted hours. Additionally, with some mobile wallets like M-Pesa, consumers can use it to buy things at merchants using a QR code, so there’s no longer a need to handle cash. Plus if they don’t have to pay a fee to get cash for a remittance, it means they have more money to spend.”

The new wallets supported include Tigo Money (El Salvador and Guatemala), Express Union (Cameroon), GoJek’s GoPay (Indonesia), Dana E-Money (Indonesia) OVO (Indonesia), Link Aja (Indonesia) JazzCash (Pakistan), EasyPaisa (Pakistan), UPaisa (Pakistan), Alfa (Pakistan), and Orange Money (Senegal). M-Pesa, which is already supported in other markets, added Tanzanian coverage. These new providers join existing supported wallets such as the Philippines’ largest mobile wallet GCash, Bangladesh’s bKash, MTN Mobile Money (Rwanda, Ghana and Uganda), Airtel Mobile Money (Rwanda and Uganda) and M-Pesa, which operates under that brand in Kenya and under Vodafone Cash in Ghana.

COVID-19’s impact on the transition to digital remittances had been initially felt in the U.S. and other developed countries where most of the money is sent from, as consumers have been either unable or unwilling to go to agent locations.

This digital transition has forced a major drop in in-person transaction volume at large agent network operators such as Western Union and MoneyGram, shifting consumers to their online channels as well as those of digital providers such as Remitly, PayPal’s Xoom and others.

Remittance recipients also share the same virus-related fears and must work around store closures or restrictions. One big difference, despite the fact that many consumers in developing countries are at a deficit when it comes to bank account ownership, is that mobile wallets have become the preferred method of spending when cash is not an option. Mobile wallets are increasingly providing a financial ecosystem that is accessible to billions across the globe.

“Merchants want to accept payments through mobile wallets due to the lower cost [relative to payment cards] and give customers the most flexibility,” said Moiseff. “Our customers like the option to scan a QR code with their phone and pay directly with the mobile wallet. We see GCash in the Philippines and M-Pesa in Kenya growing in popularity as more merchants want to accept them for payments.”

In terms of adoption in Africa, M-Pesa is a strong example of a non-bank solution driving financial inclusion. Launched in 2007 by Vodafone’s Kenyan associate, Safaricom, it operates one of the largest financial networks in Kenya. Reportedly half of Kenya’s GDP volume runs through the M-Pesa network. Since launch, Vodafone and Safaricom have expanded the network to cover seven countries across Africa, including Tanzania, Mozambique, Ghana and the Democratic Republic of Congo, covering 37 million active customers and 400,000 agents. Additionally, Vodafone has expanded M-Pesa to include countries in Europe and Asia.

Mobile wallets have proven to be particularly effective in driving financial inclusion across developing countries worldwide, according to the World Bank. In Kenya, the M-Pesa wallet has been instrumental in doubling the country’s ownership of financial accounts in just six years, according to the World Bank. The same inclusion experience has been realized by Tanzania over the same six-year period.

The opportunity for Remitly to drive significant volume to mobile wallets is huge, given its now 25-member wallet remittance network can be accessed by 300 million consumers in developing nations. Currently, M-Pesa represents 95% of Remitly’s mobile wallet volume, covering a number of countries in Africa.

“So many countries are cash-based, so the virus is problematic to daily life where cash is essential,” noted Moiseff. “Having the option to use a mobile wallet to accept a remittance and spend it can be a game changer for many of our customers.”

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Financial inclusion Remittances Cross border payments Mobile wallets