Courtesy Photo: Varghese Thambi, Managing Director, Diamond Trust Bank and TerraPay’s Muyingo
A new partnership between Diamond Trust Bank and payment services company, TerraPay, could cut by more than half the cost of sending money from other countries to Uganda.
Currently, it costs an average of 6.2 percent to send money between countries, and about 7.3 percent to Uganda, excluding transfers from Tanzania which pushes the cost to 11 percent, according to the Global Forum on Remittances, Investments and Development.
The United Nations under the Sustainable Development Goals as well as the G20 group of countries have set a goal to reduce the costs to 3 percent or less by 2030.
The deal between Dutch-based firm, TerraPay (Terra Payment Services) and DTB is poised to significantly narrow the financial inclusion gap, streamlining the processes of money transfer, savings, and credit accessibility for individuals.
It will enable the money sent from anywhere in the world to be directly deposited to the recipient’s DTB bank account almost instantly, according to Samuel Muyingo, TerraPay Country Manager, East, and Southern Africa.
He says that with TerraPay, money can be sent to Uganda from at least 210 countries, and the transaction is completed in a minute, which makes it convenient for those in the diaspora to send money back home.
On the cost, Muyingo said their costs are flat, at not more than 1.8 dollars per transaction irrespective of the value, which makes it even less than the targeted UN average of 3 percent per transaction.
This initiative is mainly expected to benefit customers residing in Qatar, Canada, Europe, Kenya, Germany, the United Arab Emirates, the United Kingdom, and the United States, and grant them the capability to execute real-time money transfers to recipients in Uganda.
Varghese Thambi, DTB Uganda Managing Director said they now have partnerships with four money transfer firms, but that this adds another advantage of low cost and swift completion of the transaction.
He said that many Ugandans find the fast transfer services too expensive, yet they are also limited in reach, while with this, the recipients can get money from any of the DTB branches and bank agents.
This strategic partnership is set to fuel the anticipated growth in digital transactions within Uganda, a market projected to surge to a staggering 1.3 billion dollars by 2027.
Thambi says this is also expected to encourage more people to open bank accounts because it makes even withdrawing money cheaper, unlike the other services and systems which take long processes and paperwork.
“We are confident that this partnership will be a success and will help promote financial inclusion in the region by simplifying global money movement for both individuals and businesses, making it easier than ever to connect with loved ones and also, empower global commerce,” said Willie Kanyeki, TerraPay’s Vice President East and Southern Africa.