For many years, people from Africa have crossed borders to study, live, work, and trade. Most of these people do not cut home ties. Instead, the migrant retains relationships with their families and governments, which involves sending and receiving money from home. Students without scholarships may need school fees and upkeep money from their parents in Africa. Employees working abroad may also want to send money home for their families or settle local bills remotely. For whatever legal reason for remittance, cross-border payments remain highly significant to Africans living abroad and their governments, businesses, and families back home. 

Considering their global scale, one expects money transfer services such as PayPal and Western Union to meet remittance needs, as interbank transfers may pose many challenges regarding cross-border payments. However, for various reasons, these players fail to meet their expectations. 

High fees

An estimated 36 million Africans live abroad, with remittance inflows into Sub-Saharan Africa alone amounting to about $47 billion in 2019. Despite the high demand for international money transfers in this region, cross-border remittance in Africa remains the most expensive in the world. Transfer fees cost approximately 8 and 10% of the transaction value, translating to approximately $4.7 billion in transaction expenses. Putting this data into context, Sending $200 to this region costs an average of 8.5% ($17) higher than in other regions. Additionally, such high fees are far from the 3% set by the Sustainable Development Goals (SDG). Such high costs hinder small transfers, contributing mainly to the total inflows.

Slow and delayed remittance

Conventional electronic transfer services such as PayPal are generally quicker than traditional banks. However, they are still slower, considering PayPal payments may take up to 5days processing time, depending on the linked bank account. The delay in fund transfer can be costly to the transacting parties. Think of a person trying to settle their bills or even a citizen trying to pay tax on a deadline day. Fintech firms are challenged with solving these issues by creating a model that supports a faster payment process that can be adopted more broadly across African countries. 

Regulatory challenges 

The number or the nature of the intermediaries involved in international money transfer prompt African governments to create regulations that hinder the easy transfer of funds. Additionally, each country has its regulations guiding that make cross-border payments slower. 

Limited services

Besides sending and receiving money, people living abroad need other financial services to manage their money. They may want to remotely manage their invoices and utility bills such as water, school fees, hospital bills, government taxes, and even electricity bills. Such services may mean a lot of hustle when dealing with traditional banks. Additionally, conventional electronic payment services such as PayPal may not support most of these services.

Moving to Seamless Cross-border payments with Lakoos

There is an apparent acceleration in demand for comprehensive and efficient cross-border money transfer services as African consumers become more comfortable with digital payment products and services. Lakoos responds to users' needs accurately by enabling instant and affordable cross-border payments. The platform allows users to make payments and send and receive funds from anywhere across the world through smart multi-currency accounts. People can now transact in local currencies as the platform supports more than 70 currencies. Additionally, Lakoos enables users to manage cross-border invoices and bills. Africans living and working abroad can now automate and settle their electricity bills, school fees, water bills, invoices, port charges, and government taxes in the comfort of their homes. The platform also has an intuitive user interface, making it suitable for even less experienced users.

Many Western migrants travel to Africa for various reasons. From tourists embarking on wildlife and stunning geographical sceneries to business travellers to workers, more than one million Europeans move to the second largest continent annually.

The degree to which immigrants access financial services has significant implications for achieving their objectives in the foreign land. While away from home, these migrants need proper access to finance to facilitate their activities in Africa and even back home. For example, as a tourist, you will need to make payments for travel tickets, accommodation, food, tour guide services, and any other bill that your activities attract while adventuring Africa. Additionally, you may want to settle bills back home. Business travellers also need remittance services to facilitate their activities and stay in Africa.

Local Fintech Products are not deal with European Migrants

Despite their dire need for access to financial services, western migrants to Africa are less likely to use a wide range of financial services compared to their native counterparts. Factors such as language barriers, cultural differences, and lack of experience with the services of the local financial institutions hinder migrants' access to financial services in Africa. For instance, M-Pesa is the leading mobile money service in Africa. M-Pesa is the leading digital payment method in Kenya that allows users to transfer money and pay for goods and services anytime, anywhere. However, the service offered by telco company Vodafone and Safaricom requires users to have an active registered mobile only works when one has a registered Safaricom SIM card. It works well for the natives considering that Safaricom is the dominant mobile network provider, meaning most mobile users have a Safaricom line. However, foreigners may not enjoy M-Pesa services because many of them may not have the local network provider's SIM card. This case is especially true for tourists who only visit the country for a few days and do not see the need to register for an M-Pesa SIM card.

Additionally, M-Pesa is only available in a few countries, majorly African countries. Therefore, many tourists do not register for mobile phone-based financial services since they cannot use them once they return to their countries. Instead, these foreigners would still stick to using bank cards and other international digital payment services, which may not be as convenient as local digital payment options.

A solution in Interoperable Fintech Products and Services

Mobile payment solutions remain the best approach to solving the lack of access to adequate financial services by travellers and migrants in Africa. Mobile devices are already part of travellers and migrants' lives as they carry them all the time.

There has been significant growth in mobile payment services. However, these services are primarily bound by an individual country market, hence not ideal for travellers and migrants. Therefore, all-inclusive mobile-payment services that support various currencies and multiple financial accounts are needed to resolve this complexity. This is where Lakoos Solutions comes in.

Lakoos financial services for Anyone, Anywhere, Anytime

Lakoos is a mobile app that allows users to access financial services anytime, anywhere hence solving the interoperability problem with most Fintech products and services. Western migrants to Africa no longer need to use Swift or Banks to facilitate payments while away from home. The app allows users to send, receive, hold and exchange money in over 70 currencies, or make payments to anywhere as a local. Additionally, it enables users to connect and manage their global finance on one platform. They can receive, keep, exchange, and transfer funds in various currencies. Lakoos also makes cross-border payments more accessible, faster, and cheaper, creating a perfect solution for migrants who manage their finances in Africa and Europe all in one platform.