For those living in Africa or Asia, in the old days if someone wanted to send money to a loved one, he was largely dependent on the generosity and honesty of a bus driver or someone who was travelling to that location. It was a crude and unsecure way to send money.
This was gradually changed by the rise in the banking system. Banks provided a more secure and consistent method of money transfer. But going through banks had its drawbacks. It required a lot of paperwork, which is not readily available in developing nations. Secondly it was slow and could take days for payment to reach the intended user.
Thankfully due to the rise in Fintechs (companies combining financial activities and mobile technology) all this is changing. Developing countries in Africa and Asia might be lacking in an effective banking system but one thing they don’t lack is the number of mobile users and that is where the revolution is happening.
Rise of Fintech
The boom in mobile money transfers, via smartphones, is dusting off a crucial market for millions of people living in developing countries. Until now, this market was in the hands of a few companies, generally applying high costs and quite long lead times. New players are emerging and are more competitive.
For a decade, fintechs and mobile operators have been steadily gaining market share against American giants like Western Union and MoneyGram. These young shoots offer money transfer services by smartphone and / or internet. They compete for this very lucrative market. You can see this happening in both Africa and Asia.
Africa: a coveted market
Among these fast-growing companies, the American company Remitly decided to join forces with the operator Ria last spring. The telecom giants are well placed in this market, this is the case of Vodafone with its M-Pesa system, well established on the African continent, but also of the South African MTN and the French operator Orange, united since 2018. to expand their mobile money transfer services in Africa.
Other well-known companies include names like EziPay, PayQin, CinetPay and WeCashUp. And these are just a few examples in the long list of startups forming in the African continent as a whole.
Asia: Leader in Fintech
Asia represents the biggest opportunity, with almost half of payment receipts world wide. And China is leading this trend, through payment networks promoted by public authorities. While India is a close second with a whole plethora of mobile payment companies. Other countries are not far behind.
Asia in particular has seen a digital boom. The Internet is becoming more readily available and with it comes tech opportunities. This is the one advantage which Asia has over Africa, which severely lacks digital infrastructure.
Similar to Africa, the companies at the forefront of this fintech revolution are communications companies. You have examples like WeChat in China, Jio and Airtel Money, all subsidiaries of communication companies.
That is not to say others lack behind. Tech giants like Alibaba have Alipay, while other startups like SpayIndia and Paytm dominate the market India giving companies like Jio a run for their money.
Over wherever you are in Asia, in each country including India you will find localized money transfer apps, that are particular to that nation. This only goes to show how much they are covered in Asian market and how they are provided a faster and safer alternative to the people of the continent.
More than just money transfer
When these companies initially started, they were only a means to transfer money through messaging. But thanks to the availability of the internet, they have become more than that. With apps like Alipay, Spay India or EziPay people can now pay their utility bills through these apps. From buying planes and train tickets to paying fines and food delivery bills all can be done through these apps. The convenience that these apps have provided to the people is one of the biggest reasons they have become so popular.