Cross-border remittances - one of the main uses of mobile money services in SA - are set to become more affordable and convenient for migrants living in SA within coming months.
This comes after finance minister Nhlanhla Nene earlier this month signed the Financial Intelligence Centre Act (FICA) exemption for low-value cross-border money transfers, and the recent approval by the SA Reserve Bank (SARB) of Econet's mobile money transfer service for South Africans.
The FICA exemption effectively reduces the anti-money laundering and combating of financing of terrorism requirements that apply at the moment, and comes into effect on 1 July.
According to local independent trust Finmark, the exemption not only means a significant reduction in cost and less administrative work for financial institutions, but will also encourage remitters currently using informal and risky channels to use formal channels. "[This will improve] the lot of poor migrants and their families in the main corridors around South Africa."
Meanwhile, Econet, Zimbabwe's largest telecoms company, announced late last week that its mobile money service EcoCash had, together with its South African partners, "finally secured approval" from SARB to start a cross-border remittance service from SA.
The approval allows Zimbabweans living in South Africa to send money directly to any Econet Wireless number anywhere in Zimbabwe using EcoCash.
Econet says the new service - set to be available at the end of next month - will "fundamentally alter the pattern of remittances", which are currently characterised by large, lump sum transfers of around R1 000 being sent monthly or every several months.
"Econet is hoping this innovative 'micro-remittance' solution will stimulate increased remittances into Zimbabwe which will help ease liquidity challenges in the economy."
The SARB approval, which took more than 18 months to secure, will come as a major relief for Zimbabweans working in SA, as it removes the hassles and challenges of sending money to relatives. It will be as accessible, quick and convenient as making a "Cash-In" to EcoCash in Zimbabwe.
By making the process of sending money from SA highly accessible, quicker and more convenient, Zimbabweans living in South Africa will be able to send remittances of even less than R50 at affordable rates.
Founder and CEO of WorldRemit, Ismail Ahmed, said recently mobile money was "rapidly displacing cash" as a means of sending and receiving money to and from abroad. A partnership between WorldRemit and SA's second biggest mobile operator, MTN, in January, allowed the former's customers to send money instantly to MTN Mobile Money users.
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