The money transfer and remittance services industry is a big deal and it’s something we understand here in Africa because of the huge monetary inflows from the diaspora. At an annual figure of $64 billion for recorded inflows (this excludes well established informal channels) this industry has attracted a lot of investor attention.
On the local front we have had the likes of MoneyGram, Mukuru and Western Union successfully setting up shop. The likes of Mukuru have even integrated with current tech trends that focus on the mobile services such as a relevant mobile application. Just recently we heard how Facebook is headed into the business and we considered how this just might be the biggest challenge for local mobile money transfer giant EcoCash.
Econet jumped into mobile money remittances last year through an EcoCash remittances service for South Africa. Information gathered from Econet indicates that the South African launch was meant to be exploratory and the service has since been suspended. Despite this they have gone on to ensure that they maintain a presence in the business.
In February 2014 Steward Bank launched a set of Diaspora services, followed by an announcement made a month later of EcoCash Diaspora services targeted at users in the UK. Recently Steward Bank started posting adverts that featured the WorldRemit Logo. WorldRemit entered the Zimbabwean market in 2011 and have since then expanded their pay-out network to incorporate EcoCash and (surprise) Steward Bank.
According to the WorldRemit website 13 of Steward Bank’s 20 branches are part of their pay-out network for cash pickups. Added to this is the option to receive money in an EcoCash Mobile Wallet. The EcoCash option will at least give some form of relief to people who were used to picking up their money from Steward Bank branches and are afraid that they might close.
There’s money to be made in smart partnerships no doubt, and from the looks of things Econet has already put one foot forward and braced for whatever flood is coming. Perhaps this approach together with a resuscitation of EcoCash Diaspora will be how they intend on maintaining a spot in the money remittance sector.
If EcoCash Diaspora takes off in the UK Econet will have established their place in money remittance thanks to impressive figures on market potential. If that does not gain as much traction as they would have intended, perhaps the alliance with WorldRemit will keep them in the game?