WorldRemit promises cheaper mobile money transfer charges for Kenya and until July 31, this year, users may win Sh100, 000 if they send or receive money from loved ones overseas.
This promotion may seem like a small thing but it is the dominant players in the cross-border money transfer business who should be worried.
WorldRemit says when you receive money in an African country through the platform, you and the person sending to you have a chance to win 1,000 USD each.
The company has been aggressively marketing through the world cup season and with an offer to rival competitors by offering relief from the exorbitant charges on money transfers, it may strike a chord among users.
Since late last year, WorldRemit has been on a charm offensive having first offered users ‘affordable rates’ to send and receive money over Christmas last year.
According to WorldRemit, Kenyans in the diaspora are losing up to 11.35 per cent when sending money home due to the high costs charged for the transactions.
The World Bank reports that the average cost of sending money is around 7.21% with sub-Saharan Africa being one of the most expensive regions to send money to with charges at 9.13%.
With such charges, Kenyans lose the most sending money home with each year seeing about US$1.7b in remittances. WorldRemit promises cheaper mobile money transfer charges which will enable users to make savings on their cash.
The final week before Christmas is one of the busiest times to send money which coincided with the launch of WorldRemit.
From this, Kenyans in New Zealand will save the most at US$22.7 (Sh2, 349).
Sharon Kinyanjui, WorldRemit Head of East Africa says, “It’s important to consider that the cost of sending money goes far beyond the transactional cost. Traditional methods mean travelling to an agent to pay in money, taking time off work to do so knowing your family and friends receiving the money will have to do the same.”
She added, “By sending money from one mobile to another instantly, we can save people not just money, but also time.”
It costs around US$4 (KES 413) for a return trip to travel from Kajiado to pick up cash in Nairobi, taking more than three hours for the return trip.
Even those living within Nairobi can take up to an hour travelling to an agent and back, costing up to US $2 (KES 206) return trip.
WorldRemit says most of their customers send money around 3-4 times a month so the savings across the month of December could be even greater.
WorldRemit promises cheaper mobile money transfer charges with Kinyanjui opining that the savings on travel and time alone could be enough to buy a box of chocolates.
Kinyanjui added, “We see that being able to send money more frequently without paying high costs and wasting time brings families and friends closer together even when living hundreds of miles apart.”
In August 2015, WorldRemit launched instant money transfers for the first time in Burundi. WorldRemit partnered with EcoCash to enable people to send and receive money in countries across Africa, Asia and Oceania.
Homegrown Safaricom’s Mpesa may have recorded an increase in global users but with other players interested in the market share, innovations like rewarding customers may not be a strong enough persuasion to keep the pennywise around.