Xoom, PayPal’s money transfer service, is allowing its customers in the US, UK, Canada and Europe to send money directly to mobile wallets in key markets across Africa with a focus on the underbanked segment. The new service is still limited to Cameroon, Ghana, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe —but with plans to include more markets later next year.
“Sending money to Africa through traditional channels has always been expensive. We wanted to help bring down the cost and speed up the process to boost financial inclusion. There is nowhere else in the world that moves more money on mobile phones than Sub-Saharan Africa. While there are only five bank branches per 100,000 people as of 2019, there are 1.04 billion registered mobile money accounts in Sub-Saharan Africa,” Julian King, Vice President and General Manager, Xoom said in a press statement.
Mobile money services are being deployed rapidly across emerging markets as a key tool to further the goal of financial inclusion. Financial inclusion is instrumental in lifting the undeserved population out of poverty—and for driving economic growth. In 2019, the number of globally registered mobile money accounts surpassed the one billion mark. In Ghana, Kenya and Zimbabwe, over 60 percent of adults have mobile money accounts. This new service expands Xoom’s offerings in Africa as the current service already enables money transfers for cash pick-up, direct banks deposits and mobile reloads to 41 countries in Africa.
The cost of sending money through traditional channels to Africa is one of the most expensive in the world, with an average cost of 9.3 percent. The cost of sending $200 to the Sub-Saharan African region averaged 9 percent in 2018 and in the southern African subregion, the average cost was 18.7 percent, almost three times higher than the global average according to the World Bank. Xoom is helping to bring down the cost to significantly with average costs of sending money to mobile wallets in select African markets ranging from 2-4 percent of the transaction.
A pioneer in digital remittances, Xoom is a fast and secure way to send money, pay bills and reload phones for loved ones in over 160 countries globally. These remittances serve as a lifeline for many people around the world and are used to pay for things like utility bills, healthcare, education costs and emergencies.
The largely cash-based system of sending money across borders can be full of paperwork, high fees, standing in line and an ever-present uncertainty of when, and if, the money will arrive when it’s needed. By providing fast and secure payment options for customers to seamlessly send money across borders by going online or using a mobile device, PayPal and Xoom are helping to expand and improve the financial health of millions of people worldwide.