A surge of digital payment firms is vying for a slice of Africa’s lucrative remittance market, challenging traditional players and promising faster, cheaper ways for the diaspora to send money home.

The flow of funds from Africans working abroad back to their home countries represents a colossal and increasingly vital source of income for the continent. In 2023 alone, remittances to Africa reached an estimated $100 billion, equivalent to roughly 6 per cent of the continent’s total GDP. This figure dwarfs both official development assistance ($42 billion) and foreign direct investment ($48 billion), indicating the profound impact these personal transfers have on African economies and individual households. The World Bank projects this disparity to widen further in a few years, highlighting a decade-long trend of remittance growth outpacing FDI.

This immense financial artery is now firmly in the sights of a new wave of fintech companies eager to disrupt the traditional, often costly and slow, methods of sending money across borders. Leveraging mobile technology and innovative payment solutions, these firms are positioning themselves to capture a significant share of this burgeoning market.

Recent moves by companies like Careem and Flutterwave exemplify this trend. Careem Pay, the payments arm of the ride-hailing giant, recently expanded its remittance service to Egypt, a top recipient of funds from the United Arab Emirates, with an estimated $10 billion flowing in annually from the UAE alone. Careem boasts rates 50 per cent cheaper than traditional banks and near-instant transfers, appealing to the large Egyptian expat community in the Emirates who regularly send money home to support families. The timing of the launch, coinciding with Ramadan, a period of increased charitable giving, further hints at the strategic targeting of peak demand periods.

Similarly, Flutterwave, a prominent African payments technology company whose core business lies in facilitating online transactions, has secured approval from the Bank of Ghana to provide inward remittance services to the West African nation. Ghana’s rapidly evolving fintech landscape, characterised by high mobile phone penetration and a strong mobile money ecosystem, presents a fertile ground for Flutterwave’s expansion. The fact that 60 per cent of foreign exchange in Ghana is already received via mobile money platforms highlights the appetite for digital financial solutions.

The attractiveness of the remittance sector is clear. The sheer volume of money being transferred, coupled with the potential to offer more competitive rates and faster services than traditional banks and money transfer operators, creates a compelling business opportunity. However, the entry of players whose primary focus lies outside of remittances, like Careem, raises questions about the long-term implications for established players and the potential for cross-subsidisation within their broader service offerings. For Flutterwave, the move represents a natural extension of its existing payment infrastructure and a deepening of its commitment to the African financial landscape.

Morocco, ranking third in Africa for remittance inflows with $12 billion received in 2024, provides a compelling example of how fintech innovation is taking hold in this remittance game. In 2023, remittances from Moroccans living abroad reached a record €10.71 billion, with France, Spain, Saudi Arabia, and Italy being key sending countries. Notably, transfers from Saudi Arabia saw a particularly rapid growth of 47 per cent.

The Moroccan market has recently witnessed significant activity from fintech players like TapTap Send. The American company, specialising in international money transfers, launched instant bank transfers in Morocco in January through a partnership with Bank of Africa. This move addresses a critical need for speed, accessibility, and security for the millions of Moroccans living abroad who rely on sending money home to support their families. TapTap Send’s model, built on an intuitive mobile app and zero transfer fees, has already gained traction, and the introduction of instant bank transfers further strengthens its value proposition by eliminating the delays associated with traditional methods.

The Bottom Line

The influx of fintech companies into Africa’s remittance markets signals a significant shift in how money flows across borders. Driven by the immense volume of transfers and the demand for faster, cheaper, and more convenient services, these digital players are poised to disrupt the status quo. While traditional banks and money transfer operators face increasing competition, the ultimate beneficiaries are likely to be the millions of Africans who rely on these vital financial inflows. The increased efficiency and reduced costs offered by fintech solutions can translate into more money reaching families and contributing to economic growth across the continent. As the digital financial landscape continues to evolve, the battle for a share of Africa’s remittance billions is set to intensify, promising further innovation and greater financial inclusion.

The World Bank has shared remittance figures for African countries in 2024, highlighting key financial inflows: