TerraPay and Safaricom Improve Cross-Border Payments
Payments infrastructure company TerraPay has joined forces with Safaricom, a leading telecommunications firm in Kenya, to launch a groundbreaking cross-border remittance partnership, as reported by PYMNTS. The collaboration, announced on July 19, will leverage TerraPay’s remittance provider, Mobex, to enable over 30 million M-PESA mobile wallet-holders in Kenya to send real-time payments to Bangladesh and Pakistan. The program is set to expand to include India and Nepal in the coming months.
Ambar Sur, the founder and CEO of TerraPay, expressed excitement about the partnership, stating, «We believe this breakthrough collaboration with Safaricom will usher in a world of new possibilities for mobile financial service operators to directly scale globally and provide customers with the choice to send payments in a secure, transparent, and swift manner.»
According to a news release by TerraPay, M-PESA experienced significant growth in global transactions in volume and value in the six months leading up to March 2023, driven by the rise of cross-border transactions. Mobile payments in Kenya have been on the rise as the country’s central bank actively promotes the adoption of these services.
TerraPay stated, «Through this partnership, both companies aim to work towards creating a financially inclusive payments ecosystem while fostering financial empowerment and independence.»
In a recent conversation with PYMNTS, Praveksha Maharaj, director of partnerships, MEA at Entersekt, highlighted the remarkable growth of digital payments in Africa. She stated, «Most Africans have embraced technology at scale and managed to leapfrog into the future of digital payments,» citing Safaricom and other mobile money operators as digital frontrunners.
M-Pesa, which made its debut in 2007, is widely regarded as one of the most successful mobile payment systems in Africa and the world. It has played a significant role in driving financial inclusion, boasting over 40 million customers and more than 500,000 merchants accepting M-Pesa as a currency for goods and services within Kenya alone.
The remittance market is currently undergoing transformation due to digital disruption. As reported by PYMNTS in May, the World Bank estimated that remittances grew by 5% in 2022, reaching $626 billion. These funds play a vital role in supporting workers and individuals who send money back home to their loved ones. Given that an estimated 1.4 billion adults remain unbanked, there is a need to transcend traditional conduits, such as bank accounts, to facilitate the movement of money efficiently.
The collaboration between TerraPay and Safaricom marks a significant milestone in the evolution of cross-border payments in East Africa. By leveraging mobile payment technology, this partnership aims to empower individuals, enhance financial inclusivity, and revolutionize the remittance market in the region.