New cell phone technology makes money transfers cheaper

Inter Africa and Mukuru.com have launched the first cross-border USSD-based money transfer service

Transferring money to a loved one back home in Zimbabwe.
Transferring money to a loved one back home in Zimbabwe.

“With so many Zimbabweans in the diaspora, we needed to use cutting-edge technology to resolve a complex issue for the developing world. USSD is the perfect platform for speed and cost-efficiency,” explained Carel van der Wath, financial director of Inter Africa .

The exodus of an estimated four million Zimbabweans during the socio-economic collapse created a huge challenge for many breadwinners are living and working outside the country but needing to send money home regularly.

The channels available were expensive, with commission charges as high as 20%, sometimes dangerous and often unreliable.

The new service allows cross-border money transfers using mobile technology. As a very basic text-based platform, USSD enables instant communications for less than the cost of an SMS.

“For many of our customers, their cell phone is their link to the world. The USSD platform is ideal: it’s fast, it can work on any mobile phone and its low cost allows us to keep our prices right down,” said van der Wath. Messages cost less than 30c a time.

The two companies have also developed a mobi application, to cater for the rising number of customers who use smart phones.

While the transfer process is quick and easy, South Africa’s FICA regulations add another layer to the transaction. To use the service, a customer in South Africa must first visit an Inter Africa branch to register their details.

Once registered, the customer can order a transfer on their cell phone from wherever they are in the country, in the same way as they would send an SMS. A series of prompts will take them through the process. They pay for the transfer over the counter at an FNB branch. Within minutes the recipient in Zimbabwe gets a message to advise that the money is ready for collection at a local CBZ branch.

Rob Burrell, who started Mukuru.com six years ago, explains the process: “Once the customer is registered, their money transfers take as long as it takes to deposit money at a bank. There’s no waiting and no clearing time.

“More crucial than the time issue is the fact that the recipient doesn’t need a bank account. They simply take their cell phone to the counter of the receiving bank, show their code to the teller and they get their money. It’s banking for the unbanked. In a way, we’ve leapfrogged the standard transfer processes and technologies,” he said.

Inter Africa have 16 branches, located in Johannesburg, Pretoria, Lephalale, Durban, Pietermaritzburg, Cape Town, Beitbridge, Stockpoort, Zeerust, Kopfontein, Groblersbrug and Hoedspruit.

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