HomeSend and the Commercial Bank of Ethiopia, announced a new remittance service that will allow more than 100 million Ethiopians to send funds directly to any mobile number in the East African country. Launched in 2014, HomeSend is a joint venture of Mastercard, eServGlobal and BICS that enables business to business cross-border and cross-network transfers. Consumers can send money to and from mobile money accounts, payment cards, bank accounts or cash outlets, regardless of their location or that of the recipient.
It is free for receivers and is accessible to anyone with a mobile number, and empowers the sender to transfer funds at a low cost through the HomeSend secure network of money transfer operators and banks.
HomeSend will be available in Ethiopia before the end of the year, says Bekalu Zeleke, President of Commercial Bank of Ethiopia. “At the Commercial Bank of Ethiopia, we believe that embracing technology is integral to bringing the best possible service to our customers. HomeSend is an example of how, when working with the right partner, like Mastercard, a financial institution can improve the lives of its customers.”
Estimated to be a $3.5 billion industry in Ethiopia, remittance services provides citizens with access to a safe and convenient financial solution, bridging the gap for those previously excluded from the formal financial sector. According to the World Bank Global Financial Inclusion database, only 22% of adults in Ethiopia have a financial account with a formal financial institution.
In the 2016 Financial and Digital Inclusion Project Report, it was highlighted that the National Bank of Ethiopia has established several financial inclusion goals in areas such as digital financial services, financial literacy, and payment systems. In 2014, it established a Financial Inclusion Council to advance on inclusive financing and centralise the services offered by various bodies.
“We are committed to helping develop a more inclusive economy, and displacing cash in Ethiopia and across Africa. It is through digital payment solutions such as HomeSend that we are financially empowering people who need it the most,” said Daniel Monehin, Division President, Sub Saharan Africa, Mastercard.
“Cash remains the biggest barrier to financial inclusion in Africa. By empowering communities through technology, we provide access to formal financial services which brings with it the opportunity to prosper.”
Mastercard continues to rapidly expand the reach of its remittance efforts, including the HomeSend joint venture, with coverage expected to reach more than 70 markets in 2016. These will include a number of new mobile money markets, bolstering the interoperability of HomeSend’s network and providing consumers with the ability to send and receive remittances globally via a mobile phone.
HomeSend is a joint venture created by Mastercard, eServGlobal and BICS that enables B2B cross-border and cross-network value transfers through a single connection. It builds on the successful deployment of mobile enabled person-to-person transfers in emerging markets and the digitalisation of money transfer services.
The HomeSend service bridges the gap between finance and telecommunication service providers and enables consumers to send money to and from mobile money accounts, payment cards, bank accounts or cash outlets, regardless of their location or that of the recipient.
Previously, MTN and Airtel launched a landmark collaboration to allow MTN Mobile Money customers in Côte d’Ivoire to transfer money to Airtel Money customers in Burkina Faso. It was the first time two operators from different groups interconnected their mobile money services internationally to offer cross-border remittances.
Given their limited experience with international money transfers, MTN and Airtel were keen to work with HomeSend who serves as an intermediary between their two services. HomeSend provides two main services to MTN and Airtel: a real-time money transfer messaging platform and interface, and real time velocity checks to support anti-money laundering activities.
Technical integration was completed within four months. HomeSend also played a critical role in creating a commercial model that would be straightforward to implement and reward all parties fairly for their efforts. In doing so, MTN and Airtel decided to compete strongly on pricing, with fees averaging only 2.5% of the face value of the transfer. In fact, low-value mobile money remittances from Côte d’Ivoire to Burkina Faso cost the same for MTN users as domestic transfers.
The service has been a huge success and now represents more than 15% of total transfers between these two neighbouring countries.
