19 Oct 2023
Nigeria is not an exception to the rule that remittances are essential to the economic health of many nations. Nigerians overseas frequently send money home to assist their family and make investments in their communities because of the country's sizable diaspora dispersed worldwide. After the United States, the UK is Nigeria's second-largest source of remittances. According to a World Bank estimate, the UK sent 3.53 Billion USD in remittances to Nigeria in 2022. These remittances are typically transmitted via official channels like banks and money transfer companies.
However, the introduction of mobile wallets has changed the remittance culture by providing a quicker, less expensive, and more practical substitute. Currently, immigrants send money from the UK to Nigeria via mobile wallets. The widespread usage of mobile wallets has fundamentally altered how money is exchanged, especially in developing countries like Nigeria. Given their increasing use, senders and recipients must understand how these digital payment systems affect remittances. This article will go into an in-depth analysis of how mobile wallets have impacted remittances from the UK to Nigeria.
Mobile wallets' convenience and cost-saving benefits have resulted in a shift in remittance methods. Many Nigerians in the United Kingdom now prefer digital platforms over traditional channels such as banks, money transfer operators (MTOs), and informal channels such as friends or family.
Traditional remittance networks were the central mechanism through which Nigerians received money from relatives working abroad for decades. Physical trips to banks or MTOs were frequently required, as were documentation, exorbitant fees, and lengthy processing periods. Because of the difficulties involved with these approaches, both senders and recipients experienced difficulty, necessitating the need for a more efficient alternative.
The introduction of mobile wallet technology resulted in a paradigm shift in the remittance sector. Mobile wallets are digital systems enabling users to store, transmit, and receive money via smartphones. Numerous mobile wallet providers have entered the Nigerian market, offering innovative solutions that streamline the transfer process. With the help of mobile wallets, it is easy to receive and send money to Nigeria.
One of the primary reasons for the shift to mobile wallets is the ease of the remittance process. Unlike previous systems that required physical visits and documentation, mobile wallets enable recipients to accept payments directly into their digital wallets, eliminating the need for intermediaries. This convenience allows users to access their money anytime and anywhere, eliminating the need to travel to physical places.
A mobile wallet is a digital wallet that is on smartphones or other mobile devices to store credit cards, debit cards, and other payment details. A mobile wallet lets you pay in physical places, online, and within apps.
Mobile wallets transmit payment data from the device to a contactless payment terminal using near-field communication (NFC) technology. With a mobile wallet, you must close the device to the payment terminal to complete the transaction. The device's payment information will be read by the terminal to complete the transaction.
These wallets provide several services, such as peer-to-peer transfers, bill payments, and even access to other financial products. If you are a Nigerian expat who is looking to send money to Nigeria from the UK, then here is a thorough explanation of how mobile wallets work:
You can send and receive money from friends and family using some mobile wallets. This can be accomplished fast and easily without the use of a bank or other financial institution.
People can save their credit cards, debit cards, and other payment information on their mobile devices using a mobile wallet. This allows them to make payments without carrying cash or credit cards.
Payments can be made with mobile wallets in stores that allow NFC payments. Place the phone near the merchant's payment terminal to make a payment.
Online payments can also be made using mobile wallets. Pick a mobile wallet as a payment method and input the PIN or fingerprint while checking out at an online retailer.
Mobile wallets can assist people in keeping track of their spending habits. This can be beneficial in terms of budgeting and saving money.
Mobile wallets have transformed how people handle their money and conduct transactions. Mobile Wallets provide the following benefits:
Mobile wallets are less expensive than traditional remittance systems. Banks and MTOs frequently demand exorbitant fees for transferring and receiving money. Mobile wallet providers often charge lesser fees and offer competitive exchange rates, ensuring that more of the sender's money reaches the receiver in Nigeria. Both parties participating in the remittance transaction profit from this cost-effectiveness.
Also, read Understanding Exchange Rates In 2023 And How To Get The Best Deal.
Mobile wallet transactions are handled rapidly, allowing Nigerian recipients to get payments nearly immediately.
Mobile wallets are a safe and secure method of payment. However, they must be used correctly and with awareness of the risks involved. Some of the security features of mobile wallets are mentioned below:
To protect payment details, mobile wallets employ encryption technologies. This indicates that the information has been jumbled so unauthorized parties cannot read it.
Some mobile wallets use biometric identification, such as fingerprint scanning or facial recognition, to authenticate identity. This provides an additional layer of security for your payments.
Mobile wallets provide fraud protection features such as purchase limitations and notifications.
Mobile wallets have given Nigerians the tools to manage their funds and participate more fully in the formal economy.
The UK to Nigeria money transfers are cheap with mobile wallets. Fees are lowered by eliminating intermediaries, and consumers can benefit from favorable exchange rates supplied by mobile wallet providers.
Remittance transactions are now faster and more safe thanks to mobile wallets, which eliminate long wait times and the risk of physical currency handling. Users can send money instantaneously with 24/7 access to mobile wallet services, giving financial assistance for emergencies and helping families back home.
Mobile wallets give more control and transparency over money transfers. Users can monitor their transactions in real-time, ensuring that monies reach their intended receivers as soon as possible. Increased transparency fosters trust and strengthens relationships between senders and recipients.
Mobile wallets have also contributed to greater financial inclusion in Nigeria. Many Nigerians, especially rural ones, lack access to traditional banking services. Mobile wallets offer a digital financial solution, allowing even the unbanked to receive, store, and manage money safely. Inclusion in the official monetary system benefits individuals and communities by promoting economic development.
Mobile wallets allow receivers to access sent monies easily. The existence of agent networks throughout Nigeria allows for simple cash withdrawals or the usage of digital money for various transactions, such as bill payments and online shopping.
Mobile wallet remittances enable users to make intelligent financial decisions, save money, and invest in education or enterprises. This can contribute to Nigeria's economic growth and long-term development.
ACE Money Transfer is dedicated to providing excellent customer service and smooth money transfers. As a reputable remittance business, ACE Money Transfer goes above and beyond to ensure that your funds are moved quickly and safely, providing you with peace of mind and the ability to support your loved ones.
Expats used to send remittances through official channels such as banks and money transfer agencies. Now, people use mobile wallets to send money to Nigeria from the UK. In Nigeria, the transition from traditional remittance routes to mobile wallets represents a significant shift in how financial support from the Nigerian diaspora is received and managed.
Mobile wallets simplify the procedure, boost efficiency, reduce expenses, and encourage financial inclusion. Despite certain obstacles, this transformation has had a beneficial overall impact, providing a more simple and accessible means for Nigerians to receive remittances from overseas. As technology advances and mobile wallet acceptance develops, the Nigerian remittance landscape is set to evolve further, boosting the financial well-being of its beneficiaries.
In 2022, digital and mobile wallets were the payment methods used in 7% of Nigerian e-commerce sales. POS shopping, on the other hand, accounted for 14% of all digital and mobile wallet transactions.
Digital wallets for cross-border remittances allow businesses and individuals, banked and unbanked, to transfer remittances with greater transparency, lower costs, and faster delivery.
It removes the need to carry cash or cards by storing debit and credit cards, loyalty cards, and other forms of payment. NFC (Near-Field Communication) technology powers mobile wallets, allowing your device to communicate with another device to transmit data.
