New Technologies in Remittance Sending: Opportunities for mobile remittances in Africa

Abstract

Mobile remittances have a high development potential as they hold the promise of providing quick, easy and cheap money transfers. In Africa, mobile phone usage has increased sharply and mobile banking providers are extending their services, therefore offering opportunities for mobile remittances. The rise of mobile banking in Africa, however, differs substantially across countries, mainly due to a lack of financial infrastructure. Consequently, the opportunities that mobile banking offers for mobile remittances vary geographically. The services provided do not always meet the needs of remittance senders and the African remittance market is generally under-acknowledged as an important market by providers. Restrictive financial regulations play a key role as well. Mobile remittances have the potential to become an important and revolutionary tool for remittance sending in Africa. Effective policies should therefore address the limitations in the regulatory and financial infrastructure for mobile banking to become the foundation for mobile remittances.