Ria provides low-cost remittances and partnership for Postal Operators in Africa

According to the World Bank, it costs an average of 20 percent to send remittances within Africa, while the global average cost to send to Africa is around 12 percent. This is the highest average remittance cost in the world.

And these high fees are something that governments and agencies – along with Ria – want to see come to an end. Ria’s average cost to send to Africa currently sits at around 5 percent – although we’d like to see that figure reduced further.

High fees are also one of the reasons that the International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations, partnered with the African Postal Financial Services Initiative to organise the African Conference on Remittances and Postal Networks in South Africa. 

The event, which took place during March 4-5 in Cape Town, saw around 100 delegates discuss the role of the Post Office for delivering remittances to those in rural and hard-to-reach places. Four attendees from Ria took part in discussions and outlined how we can help to reduce cost and transaction times to, from and within, the world’s second largest continent.

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Ria’s MD for EMEA & South Asia spoke at the conference in South Africa about Postal Operators and Partners in the Marketplace.  © IFAD.

Ria’s General Manager for Africa, El Hadj Malick Seck, who attended the event said: “It was a great opportunity to discuss actions we can take now to improve money transfer services for the African people. The Post Office network is one of the most important for delivering remittances sent from loved ones to their families back home. More people need access to low-cost remittances and Ria can provide those where exclusivity laws or agreements do not prevent us from doing so. We will continue to inform central banks and banks on the benefits of non-exclusive contracts for the country, customers and correspondents.”

Ria’s Operations Director for EMEA & South Asia, Ignacio Reid agreed, adding: “We’re working hard to open more doors in Africa. Ria already has a very strong service for those sending money to Africa, but more can be done for those sending from and within Africa. This event was a good opportunity to discuss these issues and show our support for the goals to expand rural reach, and offer affordable and better transfer services.”

With remittances to and within Africa totalling more than US $60 billion in 2014, this market is attracting more attention. In 12 countries in Africa, remittances represent over five percent of GDP.

According to Universal Postal Union (UPU) data (see infographic here), around 80 percent of the Post Office locations in sub-Saharan Africa sit within rural and less-populated areas where banks are often not present. These locations are critical for those who rely on remittances each month.

While there are a lot of exclusivity agreements within the Post Office network, some governments are taking a firmer stance and abolishing exclusivity for money transfer companies – such as in Tunisia and Nigeria. Exclusivity directly hurts the people who benefit the most from these remittances. And we’d like to see this end.

We believe that competition creates more choice at the point of sale. This not only benefits the customer, but the business as well. And with our responsible remittance business, we feel it’s only a matter of time before the winds change and we see the orange wave spread further throughout Africa.

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L-R: Ria’s Ignacio Reid, Robert Kotei, Malick Seck and Sebastian Plubins took part in discussions at the African Conference on Remittances and Postal Networks.