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Mahindra Group‘s TerraPay, a mobile payments switch has successfully obtained regulatory approval from South African Reserve Bank to launch Cross-border money transfer services in the country enabling it to do cross border money transfers from South Africa to mobile wallets in Zimbabwe, Nigeria, Mozambique and Uganda.
According to Mr. Ambar Sur, Founder & CEO of TerraPay,”TerraPay is taking an aim to solve this problem of the migrants, by facilitating instant and cost-effective low value money transfers to mobile wallets. We are now open for business in South Africa and are actively looking to build strategic partnerships to further expand our footprint in the Southern Africa region.”
According to the World Bank, the global average cost of sending remittances was 7.43% of the amount sent by remitting customers. For remittances sent from South Africa, the average cost was 16.71%; more than double of the global average.
South Africa is a major send as well as a receive market. Apart from sending remittances to all neighbouring Southern African countries, the country also receives remittances from UK, Australia and US. TerraPay’s global network is expected to support the growing demand for instant transfers in the region.
TerraPay interconnects mobile wallet service providers, financial institutions and money transfer operators in key send and receive markets. The license enables the company to enter into cross-border low value person-to-person payments in South Africa. The bulk of remittance flows from South Africa are destined for Zimbabwe, Mozambique and Lesotho, with 85% of all migrants originating from these countries. Moreover, almost 70% of transfers to these countries are conducted informally, since the high cost of formal money transfers is a major barrier to accessing formal remittance channels. TerraPay aims to help solve that problem for immigrants.
