Money transfer firm Wave extends M-Pesa services to the UK

Money Markets

A mobile money customer at an M-Pesa outlet. PHOTO/FILE 

By DAVID HERBLING

In Summary

• East Africans living in the UK can now use the Wave app to send money directly to Safaricom’s M-Pesa wallets.
• Wave’s local partner for remittances is Commercial Bank of Africa, which also banks for M-Pesa.

Wave, a New York-based money transfer firm, has expanded its M-Pesa-linked diaspora remittance services to the United Kingdom.

This means that East Africans living in the UK can now use the Wave app to send money directly to Safaricom’s M-Pesa wallets, as well as to Uganda and Ethiopia through MTN mobile money. They can also send to Tanzania’s M-Pesa.

Wave, launched in May 2014, was previously only available in the US and Canada. Remittance inflows from Europe, mostly the UK, accounted for nearly a third of the $559 million (Sh55.9 billion) Kenyans sent back home in the five months to May this year.

Drew Durbin, Wave co-founder and chief executive, said the money transfer firm is banking on the fact that it does not charge any commission to send cash to win market share.

“Wave now supports instant transfers from United Kingdom debit cards to Kenya, Uganda, Tanzania and Ethiopia,” Mr Durbin said in a statement.
“The rest of Europe is coming soon,” he said without offering any timelines.

The Wave app is available on both Android and iOS. It does not levy users a fee to make diaspora remittances, but earns from foreign exchange.

The US firm’s local partner for remittances is Commercial Bank of Africa, which also banks for M-Pesa.

READ: Safaricom targets diaspora cash in deal with UK firm

Wave is spoiling for a fight with Western Union and MoneyGram — the two dominant players in the East African market — with displays of live price comparisons with competitors on its app, offering consumers a chance to rate offerings by different providers.

“Western Union and MoneyGram make money on both currency exchange and fees. Wave only makes money on our exchange rate,” the firm claims.

Sub-Saharan Africa remains the most expensive region to send money to with remittance costs estimated at 9.74 per cent of the principal, according to latest data from the World Bank.

The Wave app joins a list of other online platforms such as WorldRemit and mHITs as well as traditional diaspora remittance firms such as Western Union, MoneyGram and Xpress Money, which are all turning to mobile money services to offer end-to-end money transfer services.

A number of Kenyan banks have also entered the business.