• Wednesday, February 28, 2024
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BusinessDay

“We offer same-day transfers to major banks”

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WorldRemit, a London based online money transfer service firm has processed hundreds of thousands of transfers to Nigeria since inception. Ismail Ahmed, Founder/CEO, shares his experience in United Nations Remittance Programme and other issues in this interview with Hope Moses-Ashike. Excerpt.

About WorldRemit

WorldRemit is an online service that lets people send money to friends and family living abroad, using a computer, smartphone or tablet. We offer an easy-to-use and low-cost alternative to traditional, offline money transfer companies which charge exorbitant fees.

I got fed up with having to travel across town and queue up at money transfer agents to send money home, so I decided set up WorldRemit in 2010. Today – just five years later – people in 50 countries can use WorldRemit to send money to more than 120 countries in the world.

At WorldRemit, we are dedicated to making money transfers as quick and convenient as possible. The majority of our customers already use their mobile phones to make transfers. You also have full control of how you want your recipient to receive the money: Either as a bank deposit, cash pick-up, Mobile Money, or a mobile airtime top-up.

Your experience as a remittances expert and compliance advisor

Working at the United Nations Remittance Programme was an incredibly insightful experience for me. I gained a deep understanding of how important remittances are as a lifeline to millions of people around the world. Global remittances amount to three times as much as all international aid budgets combined – that’s more than half a trillion dollars every year.

At the UN, I also realised that only a digital remittance service like WorldRemit can meet the high compliance standards and regulations in the money transfer sector. Being online only, all transfers on WorldRemit have an audit trail and can be accounted for. The traditional agent-based model of firms like Western Union or MoneyGram leads to increased operational costs, a greater compliance burden and a higher potential of suffering fines from regulators – all of which leads to higher fees for customer

The number of Nigerian that have so far transacted businesses with you

Nigerians are among our most important customers and we have processed hundreds of thousands of transfers to Nigeria since we launched our service. The World Bank estimates that more than $21bn in remittances were sent to Nigeria in 2014.

Uniqueness of your service

For a long time now, we have been observing how people are changing the way they communicate with one another. For friends or relatives who go abroad, staying in touch with loved ones at home has become easier – services like Skype, Viber, or WhatsApp mean that people connect more easily and more often.

At WorldRemit we want to make sending a money transfer as easy as sending an instant message. More than half of our customers send money from a mobile device, and the vast majority of our transfers are processed same-day or instantly. For Nigerians, we offer same-day transfers to all major banks.

The cost of remittances in your organization compared with banks

Banks and traditional money transfer companies have long overcharged migrants, especially for transfers to Africa. The Africa Progress Panel, chaired by former UN Secretary-General Kofi Annan, has condemned this “Remittance Super Racket” for imposing a “super tax” on remittances, which costs Africans almost two billion dollars every year.

WorldRemit offers highly competitive fees and our service generally undercuts banks and traditional money transfer companies. For Nigerians in Europe, for example, our fees start at less than 1.00 GBP/EUR for a transfer, which means people can send smaller amounts more easily where they previously had to pay large minimum fees with other companies.

How much have you so far received from Nigerians?

We’ve processed several hundred thousands of transfers from Nigerians abroad to date.

Rating Nigeria’s remittance compliance index

Nigeria has made significant progress regarding anti-money laundering and counter-terrorism financing regulation. In fact, the international Financial Action Task Force (FATF) has recently praised Nigeria for revised AML/CTF regulation and the progress made in these areas. For any international remittance service working with partners in Nigeria today, technology, strong governance and quality compliance staff are key to ensuring that fraud is minimized.

Do you have office in Nigeria? If no, when do you intend to set up one?

As of today, we don’t yet have an office in Nigeria. At the same time, our international business development team is already working with partners in Nigeria and elsewhere in Africa. We will most likely devote more resources and representatives to important markets like Nigeria.

Likely risks involved in financial transactions in Nigeria vis-à-vis sub-Saharan Africa

It’s safe to say that financial transactions to Nigeria were subject to high fraud risks in the past. In fact, however, Nigeria has gone a long way in terms of mitigating risks by taking steps towards a cashless economy, not unlike other Sub-Saharan countries like Kenya or Somaliland. In our case, all transactions to Nigeria through WorldRemit are 100 percent digital on the receive side, which means there will be an audit trail to both sides of any transaction.

About Ismail Ahmed

Ismail is the Founder and CEO of WorldRemit – the world’s leading online money transfer service. For Ismail, founding WorldRemit was the culmination of 20 years’ experience in the money transfer industry – spanning academic, consulting and in-house roles. Before setting-up his own business, he worked for the United Nations East Africa Remittance Programme, helping money transfer companies comply with tough anti-money laundering rules introduced after the 9/11 attacks. Ismail has published widely-cited research on the effect of remittances in Somaliland following the country’s civil war.

He holds an MSc and PhD from the University of London and an Executive MBA from London Business School.

Hope Moses-Ashike