According to the World Bank, the African diaspora is made up of over 150 million individuals who jointly contribute about $45 billion in remittances back to Africa every year. For Africa, remittance flows are much greater than official development assistance, and they exceed foreign direct investment in some countries.
The process of sending money to Africa remains relatively difficult, however. Remittance costs are still above the United Nations SDG goal of 3% per transaction by 2030 (even within the continent). Moreover, sub-Saharan Africa is the most expensive region to send money to, and the costs are subject to wide variations.
Sending money to or from Africa usually involves lengthy, and frequently confusing processes. Users can get lost in the various steps, leading to delays or misunderstandings that cost them dearly.
But things are so much simpler if you have a roadmap to help you navigate the often difficult task of sending money overseas. Let’s have a look at everything you need to know when transferring money to or from Africa.
Check if you have the correct recipient details
Sending money to the wrong account can be costly and time-consuming.
Your transfer provider may be unable to trace and reclaim your money once it’s been sent to the wrong person. As such, you need to double-check that you have the correct recipient details before confirming a transfer.
The following are some of the common details you’ll need to check when making an international money transfer:
- Recipient’s full name, account name, account type, account number (check this twice!), and home address
- The recipient’s bank SWIFT code or Bank Identification (BIC) code.
- The amount of the transfer
If you do notice that you’ve made a mistake after starting the transfer, notify your transfer provider immediately as they may be able to cancel the transfer before it’s too late.
Check the exchange rates and transfer fees
Transfer fees and exchange rates are probably the biggest factors in deciding how much money you end up paying when making an international money transfer.
Exchange rates change constantly, and this affects your transfers.
If you make a transfer when the exchange rate is unfavorable, you could end up paying a lot more, especially if you’re sending a large amount of money. Exchange rates will also affect how much your recipient gets.
It’s important to keep an eye on the rates so that you can make your transfer at the best possible time (i.e., when the exchange rate is favorable to your currency). You can sign up for the daily exchange rate notifications that some money transfer providers send daily to help users determine the best time to send money.
Besides exchange rates, transfer fees will also determine how much you pay for a transfer and the final amount your recipient gets.
While some transfer providers won’t charge fees on transfers, others may charge extra fees in addition to their normal service fee. You must check the total transfer fees before confirming a transfer.
When choosing a transfer service, ask yourself if:
- you’re getting competitive transfer fees and exchange rates.
- you’ve read the fine print. Some services have hidden fees that will creep up on you.
Using the right service provider will help you cut costs when sending money overseas. And while we’re on the issue of service providers, remember that banks are not the only option.
Consider whether a bank is the best way to go
Although banks are trusted and long-standing institutions that can transfer your money internationally, they are not necessarily the best option.
Banks may not provide the best transfer fees and exchange rates, so it’s probably worth exploring other options including traditional money transfer companies and modern digital financial service providers such as Chipper Cash.
Digital financial service providers, in particular, are gaining a lot of traction these days for being a simple, straightforward, and largely reliable way to transfer money abroad. Also, a lot of them can transfer your money almost immediately, thus eliminating the inconvenient waiting period that’s common with bank transfers.
Before sending money overseas, shop around for a service provider that offers the best deal based on your budget and transfer destination. That said, be on the lookout for money transfer offers that are too good to be true.
Beware of transfer scams
Scammers are all too common wherever money is involved, and international remittances are no exception. Although the specifics may vary, scammers will usually have some telltale signs.
For example, a service provider looking to scam you may:
- pressure you into making a transfer (no legitimate provider will do this)
- ask for your bank PIN or similarly confidential information over the phone, usually using the excuse that they are offering you guidance
- offer a commission for sending large amounts of money
- ask you to send money through unusual means
It’s a good idea to have the following security checks when sending money overseas so as to avoid getting scammed.
- Only transfer money to people you know and trust.
- Never give out any confidential information on unsolicited messages or phone calls.
- Avoid sending large amounts of money all at once.
- Ensure that your chosen financial service provider is trustworthy. For instance, you can search for third-party reviews that prove the provider’s legitimacy and reliability.
- If you send money digitally, make sure that the device you use has malware protection to provide an extra layer of security against hackers and scammers.
Recognizing the red flags and taking proactive measures to avoid scams will help protect your money as you transfer it overseas.
Send money overseas the right way
Whether you choose to send your money via your bank or an online service provider, you need to do your research to ensure that you cover all the steps necessary to complete transfers successfully.
Fortunately, the availability of reliable transfer service providers means that sending money overseas is now easier and more efficient.
Chipper Cash makes it easy to transfer money quickly and securely across Africa as well as other parts of the world. Best of all, there are no transaction fees, and you can enjoy low cross-border rates.
Download the Chipper app today on Google Play or App Store and start enjoying fast, cheap, and secure transfers to and from Africa today.