According to Western Union’s inaugural Global Money Transfer Index, which polled 30,600 customers in 20 countries in the Middle East, Africa, and Asia Pacific, people in Africa are placing greater demands on their families living overseas.
The index questioned customers about their aspirations for the future as well as how, when, and why they already use choices for international money transfers.
Five important marketplaces in Africa specifically were surveyed. South Africa, Kenya, Nigeria, Senegal, and Morocco are among them.
The statistics show that 62% of African consumers receive money transfers at least once a month or more, and 59% also send money across borders at that frequency.
According to the index, 78% of African recipients expect these remittances to expand over the next 12 months. The Global Money Transfer Index revealed that 81 percent of consumers throughout the African continent are asking for more money from senders due to economic issues like the continent’s higher-than-average cost of living (compared to a global average of 79 percent).
It emphasized the fact that 71% of senders globally and 72% of senders in Africa agreed they are sending more than they did earlier for the same reason. Despite the widespread belief that remittances are determined by when earnings are received, consumers claim that family needs are the main factor influencing the frequency and volume of remittances.
Western Union’s head of operations for Africa, Mohamed Touhami el Ouazzani, stated: “The Index tells us that the cost of living squeeze across Africa means consumers are relying on money transfers as their daily lives have become more difficult,” adding, “As consumers tell us that the remittances they receive will need to increase, it is imperative for money transfer providers to stay agile, and support consumers on their journey.”
Although providing for one’s family is listed as the primary reason for sending money, the Index asserted that consumers also believe transfers are important for future financial planning. The second most common reason customers send money abroad is to pay for their children’s education. Consumers also highlighted important factors including conserving for the future and defending domestic company interests.
Consumers also showed that they kept a close check on how their native currency performed, according to the Western Union survey. To take advantage of this opportunity, 67% of consumers in Africa (and 68% internationally) send more money when the value of the local currency declines. Sixty-five percent of recipients in the region concur that they get more money when currency prices decline.
It was revealed that consumers are concerned about currency swings. When questioned about the future, 84% (or 79% internationally) of senders said they would want to see money transfer companies provide an extra service that would alert them when important currency values start to change so they may schedule transfers accordingly.
According to the survey, consumers’ choice of money transfer companies is influenced by receiving better service and more value. The top three criteria include getting the greatest exchange rate, making sure receivers pay little or no fees, and getting transactions done quickly. The paper also stated that according to industry studies, there are currently more than five billion Internet users worldwide, and that number is rising at a rate of 1.9% per year. It was emphasized that developing economies experienced even higher growth rates. In line with this, the Index showed that more than half of African customers (58%) choose digital-only options for money transfers.
To achieve true digital fairness, however, much more work must be done because three billion people are still not online. Trust and customer experience, combined with a preference for face-to-face interaction, are the top barriers for both senders and receivers who decide not to utilize digital transfer services at all.
Conclusion
Yet, things seem different when customers consider the future. Consumers in Africa demand a choice of platforms when transferring or collecting, at 49% (globally, 52% percent). The survey claimed that combining digital and physical interactions will greatly expand the consumer finance ecosystem.
