The South African Reserve Bank has approved TerraPay to launch cross-border money transfer services in South Africa.
In the initial rollout, the mobile payments switch will enable money transfers from South Africa to mobile wallets in Zimbabwe, Nigeria, Mozambique and Uganda.
Its global payments infrastructure interconnects mobile wallet service providers, financial institutions, and money transfer operators to facilitate low-value cross-border transactions in key send and receive markets.
TerraPay Founder and CEO Ambar Sur noted, “As per a report from FinMark Trust, the bulk of remittance flows from South Africa are destined for Zimbabwe, Mozambique, and Lesotho, with 85 per cent of all migrants originating from these countries. Moreover, almost 70 percent of transfers to these countries are conducted informally, since the high cost of formal money transfers is a major barrier to accessing formal remittance channels.”
Sur added that TerraPay aims to mitigate this challenge facing migrants by facilitating instant and cost-effective low-value money transfers to mobile wallets.
The license also enables the company to enter into cross-border low-value person-to-person payments in South Africa.
According to TerraPay, South Africa is a major send as well as a receivers market. Apart from sending remittances to all neighbouring Southern African countries, the country also receives remittances from UK, Australia, and US.
The company is also looking to build strategic partnerships to further expand its footprint in the Southern Africa region.
TerraPay’s global network is expected to support the growing demand for instant transfers in the region.