Money transfer services are prone to disruption by new technologies. Many people feel Bitcoin, and other cryptocurrencies are a legitimate threat to remittance services. But in Nigeria, MoneyGram will continue its operations, as they are officially recognised as a trusted money transfer provider. This news comes on the heels of various remittance platform shaving their licenses revoked two weeks ago.
It will not be easy to venture into the money transfer space in African countries, unfortunately. Nigeria is tightening its grip on the market by forcing companies to be officially recognised as money transmitters. The Central Bank of Nigeria recently changed its policy on how these companies can continue to provide services to Nigerians.
MoneyGram Remains In Business In Nigeria
MoneyGram lets users send and receive funds from Nigeria to the rest of the world and vice versa. Funds can be retrieved from a local agent, or have it deposited into their personal bank account. Given the status of the Nigerian economy right now, many companies were operating in the bylines of legality, forcing drastic measures by the government.
MoneyGram Anglophone Africa Head Kemi Okusanya stated:
“Lagos has been chosen to serve as MoneyGram’s hub for Anglophone Africa operations. In addition, we have invested millions of dollars to improve product delivery for remittances to Nigeria. We know the needs of our customers vary and we are always striving to provide them with a solution that is most convenient for them. For example, our cash-to-account service allows Nigerians to receive funds directly to the customer’s personal bank account.”
Keeping in mind how remittance transfers bring in US$21bn to the Nigerian economy every year, it is evident this business model is vital to the well-being of the country. In fact, Nigeria accounts for almost 60% of total remittance inflow to Sub-Saharan Africa. The majority of funds is coming from the US and the United Kingdom.
So What About Bitcoin Remittance?
This is both positive and negative news for Bitcoin remittance in Nigeria. The good news is how a lot of the competition has been eliminated, and only a few companies stand strong. The bad news is how companies looking into this business model will need to convince the Central Bank of Nigeria about their intentions. Moreover, it appears a conversion from Bitcoin to fiat currency will be necessary.