58% of Africa’s consumers want to use digital-only solutions
THE Inaugural Global Money Transfer Index, conducted by Western Union, which surveyed 30,600 consumers in 20 countries across the Middle East, Africa, and Asia Pacific, has revealed more demands from people in Africa on their families abroad.
The index asked consumers how, when, and why they use international money transfer capabilities today, as well as their expectations for tomorrow.
Specifically, in Africa, five key markets were surveyed. These are South Africa, Kenya, Nigeria, Senegal, and Morocco.
According to the findings, the majority of Africa’s consumers (62 per cent) receive money transfers at least once a month or more; 59 per cent send funds across borders at the same rate.
The index said over the next 12 months, more than three-quarters of African receivers (78 per cent) expect these remittances to increase.
The Global Money Transfer Index showed that economic challenges such as higher global cost of living mean 81 per cent of receiving consumers (compared to 79 per cent globally) across the African continent are asking senders for more money.
It stressed that for the same reason, 72 per cent of African senders (71 per cent, globally) agreed they are sending more than previously. This may contribute to why consumers state frequency and volumes of remittances are primarily influenced by family requirements, despite the common perception that remittances are driven by when salaries are received.
Head of Africa at Western Union, Mohamed Touhami el Ouazzani, said: “The Index tells us that the cost-of-living squeeze across Africa means consumers are relying on money transfers as their daily lives have become more challenging,” said, “As consumers tell us that the remittances they receive will need to increase, it is imperative for money transfer providers to stay agile, and support consumers on their journey.”
While family support is identified as the main purpose for remitting, the Index claimed that consumers say transfers also play a strong role in future financial planning. Paying for education costs ranks second highest as the reason consumers remit money. Supporting business interests at home and saving for the future were cited by consumers as critical reasons too.
The Western Union report noted that consumers also demonstrated that they keep a sharp eye on how their local currency performs back home.
As such, in a bid to maximise opportunity, 67 per cent of consumers in Africa (68 per cent, globally) send more money when the currency value falls in their receiving country. Sixty-five percent of receivers across the region agree that when currency values fall, they receive more money.
It disclosed that currency fluctuations are front-of-mind for consumers. When asked about the future, 84 per cent (79 per cent, globally) of senders want money transfer brands to offer an additional service notifying them when relevant currency values begin to shift so they can plan transfers accordingly.
The report noted that achieving better service and greater value also reflects how consumers determine which money transfer brands to use. Criteria such as achieving the best exchange rate, ensuring the lowest or no charges paid by receivers, and speed of transfers sit in the top three. Further, the report revealed that industry research showed that there are over five billion Internet users in the world today, growing at a yearly rate of 1.9 per cent. It stressed that this growth rate is even higher in developing economies. In sync with this, the Index highlighted that over half (58 per cent) of Africa’s consumers want to use digital-only solutions for their money movement needs.
“However, three billion people remain unconnected, so there is much more to do to achieve true digital equity. Of those who choose not to use digital transfer services at all, trust and customer experience are identified as top barriers—along with a preference to seek face-to-face interaction—among both senders and receivers.
