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A significant amount of money makes its way in and out of different African countries regularly. Consider these numbers from 2016, released by the Pew Research Centre. More than U.S. $5.6 billion was sent from the U.S. to Nigeria as remittances. Over U.S. $6.4 billion was sent as remittances from Saudi Arabia to Egypt.
Instances of funds moving out of African countries are not uncommon. In 2016, around $139 million was sent from Tanzania to India, around U.S. $14 million from Zimbabwe to the UK, and around U.S. $9 million from Mozambique to Portugal.
Given the volume of funds that moves in and out of different countries in Africa, it is normal for people to look for quick and cost-effective methods. While you no longer have to depend on banks or a handful of high-street forex brokers, selecting a suitable service provider requires that you pay attention to a few important aspects.
Sending Money to Africa
Where you and the recipient live might have a bearing on the company you may select, because this has an effect on the currencies involved.
XE Money Transfer, a branch of XE.com, accepts customers from the U.S., the UK, Canada, Australia, and New Zealand. The African currencies it supports transfers to include Botswana pula (BWP), Kenyan shilling (KES), Basotho loti (LSL), Mauritian rupee (MUR), Swazi lilangeni (SZL), Tunisian dinar (TND), and South African rand (ZAR).
TransferWise lets you register from most countries the world over, and it supports transfers in Egyptian pound (EGP), Ghanaian cedi (GHS), Kenyan shilling (KES), Nigerian naira (NGN), and South African rand (ZAR). OFX also accepts customers from different countries, and it lets you send money in South African Rand (ZAR), Egyptian pound (EGP), and Tanzanian shilling (TZS).
Sending Money From Africa
Not many prominent international money transfer companies accept customers from Africa yet, especially outside of South Africa. If you wish to send money from South Africa, some of the popular alternatives you get to choose from include OFX, CurrencyFair, Xend Pay, and Moneycorp.
Outside of South Africa, you mainstream options might limit to older companies such as Western Union and MoneyGram. Using the services of online companies such as PayPal, Payoneer, Neteller, or Skrill might also work well for you. However, they do not provide services in all African countries.
Cost of the Transfer
The cost of an overseas money transfer to or from Africa depends on two basic factors. These include the exchange rate that applies on the transfer along with all applicable transfer fees.
Most overseas money transfer companies add mark-ups to existing interbank rates. These are rates you get to see on websites such as Google and Yahoo Finance. In addition, you also have to account for the transfer fees you need to pay. An easy way to select the most cost-effective alternative is to compare how much the recipient stands to receive through different service providers.
Bear in mind that transfer fees may vary depending on the currencies involved, the mode of payment, and the transfer method.
Different Transfer Methods
Typically, the most cost-effective way to make an overseas money transfer is to send it directly to the recipient’s bank account. Bank account transfers may take two to five business days to process. This depends on where you and the recipient live, the company you select, and the recipient’s bank. Most companies that provide services in Africa facilitate bank account transfers.
Another way to make a money transfer to or from Africa is to get the recipient to collect transferred funds from a physical location. However, this tends to come at an added cost. Some of the popular companies that let people collect cash from agent locations in Africa include WorldRemit, Ria, Western Union, and MoneyGram. Western Union and MoneyGram are among the top companies that let you send money from different countries in Africa.
Depending on where in Africa the recipient lives, you may also consider topping off mobile wallets and mobile airtime. WorldRemit provides this service as does MoneyGram.
Most companies that facilitate money transfers to and from Africa let you pay via bank account transfers. This is typically the most cost-effective mode of payment. While there are companies that accept payments via debit and credit cards, these payments usually attract higher fees. Some companies accept payments via Google Pay and Apple Pay. If you wish to pay for your transfer in cash, your options limit to companies that operate out of physical locations. Depending on where you live, you may also be able to pay using methods such as ACH, CHAPS, BACS, SOFORT, Trustly, iDEAL, or POLi.
You get more alternatives from which to choose when sending money to Africa as compared to transferring funds out of the continent, no doubt. However, sending money from Africa is no longer as complicated as it was before the turn of the last century, and the options are set to grow. Either way, what’s great is that people now get to choose from different service providers after taking their individual needs into account.
Jon works as a researcher with iCompareFX. This online platform gives its users easy means to compare the world’s overseas money transfer companies. When he’s not working, Jon likes listening to music and cycling.