Recently launched online money transfer operator Mama Money says it wants to disrupt the money transfer market‚ which could lead to a significant drop in the fees migrants pay to send remittances.
Mama Money‚ based in Cape Town and launched last week, said it wanted to compete with the big money transfer operators such as Western Union and Moneygram.
Mama Money differs from the traditional money transfer operators that run predominately cash-to-cash models‚ which tend to be expensive‚ slow and antiquated.
The company offers a cashless system where customers have to pay in South Africa via a bank account. Mama Money then pays out in the receiving countries using mobile money.
Mama Money said its rates were set at a no-hidden fee of 5%‚ with no margin charged on the exchange rate.
South Africa is one of the most expensive countries from which to send low-value remittances‚ specifically to its neighbouring countries in Southern Africa.
The World Bank said that an average rate of 18.69% was charged to send the equivalent of $200 (R2 300) from South Africa to neighbouring Southern African Development Community countries. The global remittance price average is 8.9%.
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