Two in three (64%) consumers in South Africa prefer using digital-only platforms when transferring money internationally, according to Western Union’s inaugural Global Money Transfer Index. When asked about the future, being able to choose between digital and in-person platforms grows in importance.
South Africa has taken bold steps to rebuild the national economy and boost digital inclusion following pandemic lockdowns. As a result, it is increasingly moving to a remittance future that aims to realise financial inclusion and help grow the economy. Today, it is the largest ‘send’ market in Africa with USD 1.1 billion in outflows, and approximately 2.9 million expat residents living in the country.
The Global Money Transfer Index asks consumers how, when and why they use international money transfer capabilities today, as well as their expectations for tomorrow. The results bolster Western Union’s ‘Evolve 25’ strategy to combine high-value, accessible retail and digital financial services for all.
“South Africa is poised for notable change when it comes to digital money transfers. Digital convergence is allowing consumers to make use of services that they traditionally have not had access to in a user-friendly way,” said Mohamed Touhami El Ouazzani Regional VP, Africa at Western Union.
“While sending money through digital platforms will remain the most-preferred method in future, consumers also demonstrate a shift in balance: Almost half (42%) will want choice in how they transfer money, be it online or in-person. This speaks strongly to how consumers believe their day-to-day dynamics when managing their remittance transfers will shift, with many wanting to stay agile based on convenience and needs.”
Remittances set to increase
Consumers are being impacted by the global cost-of-living crisis, resulting in remittances increasing in importance for many. Sixty-eight percent of senders say they must now transfer more money. Receivers in the country agree, with 81% saying they need to ask for more remittances than they used to.
However, senders also struggle with a cost-of-living dichotomy, with more than seven in 10 (71%) stating that because of higher prices, they are not able to transfer as much as they used to. As they look to the future, 74% of senders state that their remittances will increase in the next 12 months.
A clear vision for the future
When choosing a money transfer brand, achieving greatest value is front-of-mind for consumers in the country. Getting the best exchange rate and keeping down the cost of transactions matters more than anything else to senders (22%), while almost one-quarter (24%) of receivers also seek providers that offer the lowest deductions as they collect their funds.
Consumers also have a clear vision of the types of money-transfer features they would like to use in the future. More than eight in 10 senders (86% including 88% of female senders and 82% of males) say a service to help them monitor currency fluctuations would be useful so they can plan money transfers accordingly.
Receivers are also keen on innovation. Eighty-one percent would like money-transfer brands to introduce a single mobile ‘super app’ that features the ability to move funds alongside other financial commitments such as paying utility bills.
“As the digital money transfer industry continues to evolve, brands that can meet the needs of consumers will be well positioned for success,” Quazzani added. “Western Union is committed to providing consumers with the best user experience in the industry and continually innovating to meet customer needs.”