Simplifying US to Nigeria remittance with fintechs

6 mins
October 11, 2023
Simplifying US to Nigeria remittance with fintechs | Machnet Technologies

Digitization Challenges in Nigeria

Last March, the Nigerian government implemented strict cash withdrawal limits to its citizens with a maximum of 20,000 Naira per day in its efforts to digitize the country’s finances. This move meant to promote the digitization of the country's financial system, encouraging citizens to rely on digital currency for their daily expenses. While a lot of its population has gotten used to paying their groceries and bills through beep cards and e-wallets,  the majority of its low-income communities are still grappling with this transition - making it hard for them to access sufficient funds for everyday essentials such as food and water. 

Unlike many other countries that are moving towards digitization, Nigeria has a slower pace of innovation compared to its European and Asian counterparts. For instance countries like Switzerland, Singapore, and Lithuania, are seen as fast-adapting countries in the fintech world. This is due in part to the fact that digital alternatives are not as widely available in Africa. For example, there is limited access to global remittance platforms like WorldRemit, Wise, Paypal, and other household names.

Remittance Hurdles: Nigeria's Digital Dilemma

In fact, Paypal only allows Nigerians to send money through the app but not receive money nor does it allow Nigerians to credit those funds into their Naira-currency bank accounts. A similar story is told for WorldRemit, where Nigerians can only receive money from other accounts around the world but not be able to send to their loved ones back in Nigeria. And as if that isn’t troublesome enough, it can also take hours or even days to complete a single transaction, and the fees for sending money abroad can be as high as 9%. 

With pain points this prominent, the private sector has been stepping in and stepping up to start solving Nigeria’s financial situation and a major player in that mix is the FinTech industry.

FinTech: Bridging the Gap

FinTech companies are providing innovative solutions to everyday financial challenges faced by Nigerians. For example, they are offering mobile-based banking services, peer-to-peer lending platforms, and digital investment products. As a result of this innovation, the number of FinTech users in Nigeria is expected to reach 146.1 million by 2027.

The growth of the FinTech industry in Nigeria is being driven by a number of factors. These include the country's young population, which is increasingly internet-savvy, plus the fact that regulatory requirements in Nigeria are not as stringent as in many Western countries, which makes it easier for FinTech companies to operate. So while innovation alongside the rest of the world has been a seemingly upfront challenge, FinTech in Nigeria is leveling out that playing field through its digital alternatives.

Exploring Fintech Solutions

You’ll be glad the next time you come across a roadblock to your money transfer request to and from Nigeria, know that there are many alternative FinTech solutions already waiting for you:

Afriex

Afriex is a Nigerian blockchain-based Fintech startup founded in 2019 by Tope Alabi and John Obirije. This fintech solution allows for multi-currency transfers that lets Nigerians send and receive money from all over Africa, the UK, and the US. With the Afriex app, customers can transfer for as low as $1 to as much as $3,000 per transaction.

Kyshi

Kyshi is a FinTech startup with the moniker “The neo-bank for Africans.” Founded in 2020 by Ayo Akindele, the startup is known for its flexible and affordable fees, setting itself apart as one of the services that imposes no setup or maintenance fees. The company recently lauched "Kyshi for Business," through which it aims to help businesses transact across multiple countries, including the UK, U.S., Canada, China, and several African nations. Kyshi provides affiliate program, cashback options, as well as special deals from its brand partners through Kyshi Connect.

Grey Finance

Grey Finance is a FinTech startup that focuses on digital nomad Nigerians all over the world. Their platform allows users to open foreign bank accounts in United States Dollar (USD), British Pound (GBP), and Euro (EUR) all while receiving payments from over 88 countries. Praised as “the knight in shining armor for Nigerian remote workers” by one of their customers, Grey Finance is popular and seem to have really fulfilled a core need of its audience.

Financial digitization is a way forward for all of us. It empowers digital citizens to work and live the way they want to. To pay for their bills, everyday essentials, send gifts to friends and family back home, and basically be there from the other side of the border. And even if it doesn’t seem like it yet, the countries that find it harder to adapt are those who actually need it most. 

We believe more of such solutions are required to power digital transformation, but it facilitating cross-border money transfers remains a complex challenge. Machnet simplifies this daunting task, enables fintechs to build US to Nigeria money transfer fintech solutions. Whether you are envisioning a peer-to-peer money transfer solutions, seamless US to Nigeria bill payments system or efficient payroll services, our versatile solution serves as a foundation to build them all. If you are interested in learning more about capabilities of our solution get in touch with us.

Read our other Blogs.