Changing Remittances Forever - The Future

$556 billion was remitted across the world in 2019.[1] This is larger than the combined GDP of 41 of Africa’s poorest countries. $23bn alone was remitted into Pakistan in FY2020.[2] This is 8% of its GDP. Remittances play a vital role in churning the wheels of the global economy. But modern expats & immigrants, especially those living in developed countries, like myself, still face a multitude of problems when they remit money despite a plethora of service providers. The 3 main ones are:[3] 

  1.      No control of the money they send
  2.     Money mismanagement
  3.     High fees

Value Added Services (VAS)

Existing remittance companies - banks, Money Transfer Operators (MTOs) and startups - all operate the same business model; they take your money, send it from country A to country B and charge you for it. On the face of it, there is nothing wrong with this vanilla offering. However, it does not address the problems of the modern expat. Dig deeper and you will find expats & immigrants want more control of the money they send. They want to do more with the money they remit. They want to pay for VAS like home country bill payments, tax & govt. payments, donations, or online shopping. They want Uber or Airbnb integration. The lack of payment gateways or a developed tech infrastructure makes credit/debit card payments and integrations in such countries cumbersome. More importantly, existing remittance services are devoid of VAS. This means, for the expat, paying for such services is a multi-step process. They first remit the money and then pay manually or use their home country banks. This is tiresome and inefficient.  

Mismanagement

Money mismanagement is an equally bigger issue facing migrants. Essentially it means that the money sent is not spent wisely. There are many contributing factors for this. However, one of the major contributors is lack of control on the remitters part of their family’s expenses. This carries economic consequences for them. They resort to remitting money several times a month and pay fee’s each time. The poor ones often borrow to send money the second/third time round. 

Fees

High remittance fees costs Pakistan $500m each year. This is enough to feed 1 million Pakistanis for 1 year. It is enough to pay 50% of Pakistan’s circular debt. But this problem isn’t limited to Pakistan alone. It’s worldwide. The UN wants to reduce the cost of remittances to 3% from a staggering 7% by 2030.[4] I think 3% is still too high. But it is progress in the right direction at least.


The Future Reimagined

Imagine everything you know about remittances to the developing world and throw it away. Think radically. Think fresh. That’s the future Bayfikr imagines.

Bayfikr imagines a future where it will give Control, Convenience and Affordability to expats. It will give them a future where its users will sit in London and pay their utility bills in Pakistan or Nigeria. Users will pay their house taxes, renew car registrations, or buy flowers for their mother’s back home all the while using their existing UK debit/credit cards for as little fee as possible. Giving expats VAS will not only provide control and convenience, it will also help reduce mismanagement.

Bayfikr is giving a future where it will collaborate with and embed into existing services that are already established in the developing world. This means Bayfikr will have a greater and better outreach than any incumbent out there.

Bayfikr’s has already taken its first steps towards its future. Now is the time for others to join too. Together we can build a more prosperous world. 

 

 

Rascim K Khattak is the Co-Founder of Bayfikr ( www.bayfikr.net ). He graduated with an MBA from London Business School and has been remitting money to Pakistan for the last 8 years. He is on a mission to change remittances forever.

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