* Updated June 2022, originally published February 2021
With money transfers accounting for 6% of all VAS (value-added services) purchases in South Africa, it is important to offer a robust and scalable solution to consumers. Remember to evaluate these seven aspects of any cross-border payment service, to ensure you implement an effective solution that benefits both your business and your customers.
1. Anti-money laundering
Money laundering can be curtailed by using a platform flagging suspicious transactions and completing identity verification easier. Your internal investigators can report suspicious transactions or trends to the South African Reserve Bank.
2. High transaction costs
According to our money transfer factsheet, Africa carries the highest costs for remittance globally. Research also shows that, on average, banks charge 18% of the transaction value compared to 5% by MTOs (money transfer operators). Your business can attract more customers by offering more competitive fees. Solutions with a lower cost of ownership and multiple retailer integrations can help to achieve these lower fees.
3. Limited cash-out points
Having multiple cash-out points gives money transfer users more choice for redeeming orders. Expanding cash-out channels can drive mobile app adoption, a wider customer footprint, and an increased number of transactions. A solution that offers multiple integrations to retailer networks will expedite speed-to-market and help your business achieve this quickly.
4. Efficient identity verification
Limited, or no, authentication creates opportunities for theft and fraud of money transfer orders. If authentication is a requirement for your business, this can be a very manual process, so be sure to look for a solution that removes part of the effort.
5. Expiry dates
Shorter expiry periods lead to unredeemed money transfer orders. This generates an increase in transactions that need to be refunded, leading to higher operational costs. Consider implementing practical expiry dates for orders to avoid unnecessary refunds.
6. User-friendly platforms
Remittance platforms with limited user permissions and access may result in challenges for both your business and customers. Restricted permissions can make it more challenging for your customers to search for valid vouchers sent to them, making it difficult to manage their vouchers. This can result in more manual work for your business with support teams having to respond to queries and assist customers. Lower your operational costs by creating a user-friendly platform for your money transfer offering.
7. Money transfer PINs
Set up your money transfer system to allow customer-selected PINs in a mobile app instead of generating it on your money transfer system. A system-generated PIN needs to be communicated to the user via less secure channels such as SMS and USSD compared to an encrypted PIN on their mobile app.
If you’re interested in building a money transfer solution with a low cost of ownership and existing integrations with a large retailer network, chat to us.