Despite the many digital innovations being made in terms of cross-border payments, retailers still have an important role to play in facilitating the thousands of remittances made from South Africa each year.
African retail giant, Game stores, offers cross-border money transfer services from its 120 stores nationally through several providers, including Mukuru, Mama Money, Hello Paisa and Ria. During the peak of the COVID-19 pandemic in South Africa, Mukuru reported an influx of more than 20 000 customers in less than 60 days upon the launch of its remote sign-up and onboarding initiative.
“While digital channels like apps, call centres, and online channels can be used to create the purchase orders, register individuals, and fulfill the compliance requirements for KYC, FICA, and sanction screening, for example, retailers are the only place where cash can be used to pay for transfers created via a bill payment – which provides an instant and immediate payment to the destination country,” explains Varsha Dayaram, Senior Vice President of Massmart Financial Services. Additionally, she explains that Game stores are able to accept large amounts of money for cross-border payments – up to R50 000 – where most other retailers have set limits on this amount.
Mukuru CEO, Andy Jury, explains “While the impact of the pandemic on remittance has varied across the market, the Mukuru experience has been one of resilience across a large core of transacting customers who continued sending regular amounts to support their families, throughout lockdowns and restrictions. We also saw new customers migrating to our service from informal remittance channels impacted by hard border lockdowns. The partnership with Game has undoubtedly played a role in our success during this time; combining Game’s ‘first mile’ which supports the sender with Mukuru’s ‘last mile’ which supports the recipient.”
According to the World Bank, the amount remitted by migrants from Sub-Saharan Africa has grown tenfold in the last two decades, from $4.8 billion in 2000 to $48 billion in 2018. Due to the effects of COVID-19, the World Bank predicted that international remittances to the region would decline by 23% in 2020. However, the number of people looking to make remittances from South Africa seems to have increased.
As South Africa has a high number of migrant workers, predominantly from Lesotho, Mozambique and Zimbabwe, the national lockdown has resulted in a greater need for many migrants to send money home to their families and loved ones – while also bolstering the need for cross border transfer for many South Africans with family abroad.
“Money is sent cross-border for many reasons,” explains Dayaram. “Most often, to cover medical, educational, infrastructural, or day-to-day expenses. There are distinct seasonal peaks for religious and cultural events, as well as monthly, quarterly and annual occasions. The upcoming Easter period is a good example of this.”
“As the Easter period approaches, Game and its partners remain committed to providing the best possible service to those individuals looking to make cross-border payments,” says Katherine Madley, Vice President of Marketing, Game. “Our Money Centre is an important part of our customer value proposition and the easy shopping experience we offer, especially with our customers who are unbanked and looking to make cash payments quickly and effectively.”