Remittances from Kenyans in the diaspora are a vital source of funds for many families around the world and are an area of payments where, for all parties involved, time is of the essence and every cent counts.
Low- and middle-income countries make up the bulk of receivers of these inflows – representing $605 billion of the total $773 billion of incoming remittances in 2021, according to the World Bank.
Thirty poor countries received more than 10 percent of the GDP in remittances, with eight receiving over a quarter of GDP through these inflows.
Meanwhile, when consumers have access to sufficient information, the figure drops to just 3.35 percent.
The past six years have seen substantial progress in the transition from cash- to digitally initiated and digital end-to-end remittances.
In the second quarter of 2016, 93 percent of remittances worldwide were cash-initiated – six years on, the figure had dropped to 66 percent, with digital end-to-end and digitally initiated transactions at 13 percent and 21 percent respectively.
By launching two innovative products that make cross-border person-to-person (P2P) payment transactions significantly faster and cheaper, Visa has also introduced sub-Saharan African consumers to a global financial network of billions of users.
In the region, Nigeria received the largest sum of remittances, at $19.2 billion, followed by Ghana ($4.5 billion) and Kenya ($3.7 billion) in 2021.
In Kenya, in a first-of-its-kind market solution in sub-Saharan Africa, Visa has partnered with Absa Bank Kenya to launch a domestic and cross-border remittance service via the Visa Global network that will allow seamless money transfers and payments to any of the two billion-plus Visa cardholders in over 100 fast funds-enabled markets, in near real-time with the complete security and reliability associated with Visa cards.
In the Democratic Republic of Congo, meanwhile, it is estimated that in 2021 citizens received remittances valued at more than $1.33 billion– in an economy where only an estimated 26 percent of the population is part of the formal financial system.
With around 650 million mobile phone users, sub-Saharan Africa is home to some of the fastest-growing economies across the globe and is a leader in the adoption of mobile digital payments, according to the World Bank and African Development Bank.
Africans are making frequent transnational payments related to trade, education, and healthcare, among other things, and this service is giving them a powerful, efficient new option for transacting across borders.
With these products, Visa is not just making the remittance process more efficient but is introducing millions of people to connected, global platforms and accelerating financial and digital inclusion in Sub-Saharan Africa and around the world.
Khan is the senior vice president, head of new payment flows for CEMEA at Visa.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
