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Category: Remittance

Wire money to Nigeria – What are the Problems in International Transactions?

Nigeria – the “Giant of Africa” – situated in the Gulf of Guinea in West Africa, is a densely populated country, is termed as a “mixed economy emerging market”. According…

Nigeria – the “Giant of Africa” – situated in the Gulf of Guinea in West Africa, is a densely populated country, is termed as a “mixed economy emerging market”. According to the World Bank, Nigeria has already reached the lower middle-income status with abundant natural resource supply, well-developed financial, legal, communications, transport sectors. The Nigerian Stock Exchange, which is the second largest stock exchange in Africa, has contributed a lot to cover this journey and most of the credits go to the agricultural department. As of 2010, 30% of the total population has been employed in the agricultural sector. But there is something that links remittance and the people of Nigeria. People wire money to Nigeria online nowadays through many websites that have reduced the power of banks and MTO’s in money transfer. But despite the development, there have been some problems in the money transfer services of the Nigerian government.

Nigerian government suspends Wire Money to Nigeria Online Services

The Central Bank of Nigeria recently appealed to the localities to beware of the unwholesome activities of some unlicensed International Money Transfer Operators in the country. This advisory became important as there were unregistered and illegal International Money Transfer Operations that came into notice by the government there and had the potential to harm the Nigerian Economy. The Acting Director, Corporate Communications Department, CBN, Isaac Okoroafor, in a statement, asked the Nigerian financial service providers to be duly licensed. He added, “their objective must be to protect the customer and the financial system as well as to ensure the credibility of financial transactions in Nigeria.”

They also added to beware of unregistered IMTO’s. This move by the Nigerian government has become a big problem for the migrants and this has now put the public works, in Nigeria, on a stand-still. But, until the entire matter of unregistered IMTO’s doesn’t settle down, the development work cannot stop. Therefore, what can be done at this point in time is the big question.

Healthy Public and Private Sector Competition

This can aid the need for an overall economic and social development of the country. The Nigerian government has direct control over the social and economic sector. However, their policies affected Nigerian foreign aid. And to overcome this severe blow, CBN relicensed multiple derisked bank accounts. But at the same time, the government has to take the support of the Private Sector. However, this can only be achieved if there is healthy competition between the two major sectors. So, basically, the new government needs to facilitate the competition instead of completely eradicating it. And we are hopeful that they will do it!

Dollar deficiency

Oil production and export is one of the major economic drivers for Nigeria. But most of the Nigerian household items and the basic supplies are not available in Nigeria. Hence, they import them from foreign countries and to make this exchange, they require foreign currencies which is a challenge considering the dropping value of Naira in the international market.

At the same time, various Nigerians saved dollars looking forward to exchanging them when it would hit a higher limit. This is why Nigerian individuals even offered a low exchange rate to the foreigners visiting their country. Apart from the individual stories, the Nigerian government is on the verge of a severe dollar shortage-crisis. In case of a global dollar shortage, it is a high possibility that developing nations and especially countries like Nigeria could take the worst hit!

However, when it comes to exchanging the extra amount back into dollars, it gets difficult for them. Because of this dollar deficiency, exchanging money has been quite difficult.

Along with these, there are some common problems like:

High level of transmission fees

Because of these increased exchange rates, it has been quite difficult for the Exchangers to maintain a constant transmission fee. So most of the banks and MTO’s charge a huge amount for international transaction fee. The transaction fee varies from bank to bank and in MTO’s also. Even when a money exchange offers a transaction fee-free program, the diluted exchange rates make up for the lost money.

The banks and MTO’s have been ruling the world of international currency transaction for many years until the online transaction websites came into existence. These online websites have made transactions easier and predictable. So people can now send money to Nigeria online without paying a hefty price.

Tracking problems

One of the major problems occurring continuously in this type of international payment system is the inability of the regulators to track their payment. Online money transfer platforms like FAZRemit ensures that the customers are able to know the exact status of their transaction. At the same time, it gets convenient for the regulators to audit the functioning of the platform. 

Prior to this, banks and IMTOs didn’t have this amount of accountability. Although they are evolving too but still, their operational cost seems to take a toll on them now.

Fraud services

Online money transfer industry is by far one of the highest genres of online scams. There are hundreds of online websites who claim to do the transactions instantly. But only some of them are licensed. This is one of the major reasons why customers opt for big names in the industry. However, since the past decade, people have started intense research before opting for any product or services. And this is what FAZRemit recommends!

A proper solution – Wire Money to Nigeria Online

Sending money to Nigeria to your loved ones and making business transactions have become much easier nowadays!

As compared to MTOs and bank transfers, online transactions have paved a new future for the financial sector. With a low transmission fee, faster transactions, secure documentation, and overall accountability, people rely on online money transfers to wire money to Nigeria more than the traditional methods.

Like any other business, online money transfer is also a business. The world bank reported nearly 689 billion US dollars worth remittances in 2017. So, it is important that platforms like FAZRemit take on this responsibility and get ready for the future. Because the baton is changing hands and soon they will be running with it!

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Banks, MTO’s, and now, FAZRemit | Money Transfer to Nigeria from US

People have many alternatives to transfer money from one place to another in the entire world. A majority of them prefer the ones with low transaction fees. As a result,…

People have many alternatives to transfer money from one place to another in the entire world. A majority of them prefer the ones with low transaction fees. As a result, they forget to estimate all other benefits that they could be losing out while yielding in that direction. Let us consider the money transfer to Nigeria from US. Suppose we need to transfer the amount, we will look for all the alternatives. There are banks and then there are International Money Transfer Operators (IMTOs).

Now what we will do? We will start research on both the ways and their exchange rates and how secure the transactions are in all alternatives. Let us consider both the cases – what features do Banks provide and how MTO’s are challenging them.

Bank Transfers – The Traditional Way…

International bank transfers are like normal bank transfers within the country. But as the currency differs from one country to another, exchange rates apply. International money transfers bear a transaction fee which includes exchange rates and processing fee. On average, to wire money from USA to Nigeria, generally, banks charge an overall transaction fee of around 8 to 10%. This charge may vary from one bank to another. However, it is absurdly high!

This may sometimes include processing charge. That differs from one bank to another. The next factor which we consider is the speed of the transaction. There will be many intermediate bank transfers before they deposit your funds to the recipient’s bank account. This may take 2 to 3 working days. This delay might be because of the remitting platform(s) or the respective bank’s technical infrastructure.

Money Transfer Operators – International Transactions 2.0

Apart from bank transfers, the other option of money transfers is MTO’s.

When it comes to Money Transfer Operators, it is essential for an MTO to get a license from both the source of origin of a transaction as well as the termination point. Generally, international transfers are charged anywhere from 2% to around 9% of the total transaction amount. However, this entire process of online funds transfer is not only tedious for an individual but could also burn a hole in his or her pocket.

So, Whats’ the Alternative?

Online money transfer service provider – FAZRemit – is licensed by the New York State Department of Financial Services to send money to Nigeria from USA. They not only guarantee the most affordable international transactions but also 100% security and fastest international transaction processing speed.

Initially, banks were the only source of sending remittances. However, with the emergence of Money Transfer Operators in the online market, the trend changed. And now, it seems like the stage has been set for yet another big player to come and take over. And it is – online money transfer services! Apparently, this is the reason why people are turning from traditional money remittances to the new and evolved ones.

Read: Online Money Transfer to Nigeria – Evolving Remittance Trend

Online Money Transfer to Nigeria from US

Coming back to the topic, it’s quite obvious that we will choose one of the money transfer operators. On the papers, transferring money through an MTO sounds like the best alternative but there are many who would always look for something better! After all, we are paying for it!

There are many operators and online service providers who offer zero percent transaction charge. But here’s the catch!

In the same market, some other service providers would say that they provide the services at zero percentage exchange rate margin.

So, what are they doing?

They either increase the exchange rate or the processing fee and market their service by leveraging the other. And why is it working out for them? Simply because we are falling for it!

Read: FAZRemit’s Lowest Transaction Fee for Money Transfer Nigeria. But How Much?

How FAZRemit stands out?

Without any hidden fee, FAZRemit charges a straight overall processing fee. The best part – unlike the IMTOs who charge at least 2% of the overall payment (now we’re talking about what you, as a user, would have to pay), FAZRemit’s transaction rates are capped at a maximum of 2 percent.
Dealing with high-risk locations while strictly adhering to global AML/CFT compliance and committing to proper KYC is not an easy thing to do as a business.

Guaranteeing that the funds one transfers reach to the right individuals within the right time at the right price, FAZRemit strives to create the overall experience of the users highly convenient.

More About Online Transfers…

At present, using FAZRemit, you can send up to $950 (excluding transaction charges) in one transaction. The maximum limit is $10,000 for a month.

24×7 live chat and prompt email responses enable customers to get their queries resolved instantly. Apart from online money transfer services to Nigeria, FAZRemit also provides the facilities to transfer money to Ghana and Kenya from the USA.

FAZRemit meets all the customer requirements like lowest transaction charges, highly secure and fast transactions, and convenient experience.

So, we have an option, a better one! Yes, it is yet to make its mark in the international market but it does promise a lot that we are getting from MTOs. But if we would have been content with the banks, there would have been no IMTOs. The same should apply for the present market!

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Online Money Transfer Services – Are They Better than MTOs?

Although IMTOs provide more affordable money transfer services to the customer, there is another side of the story. Central Bank of Nigeria (CBN) terminated the license of multiple IMTOs. Their…

Although IMTOs provide more affordable money transfer services to the customer, there is another side of the story. Central Bank of Nigeria (CBN) terminated the license of multiple IMTOs. Their biggest concern on papers was the illegitimate transfer of economy. At the same time, banks received tough competition from the International Money Transfer Operators.

But even today, in Africa’s biggest remittance receiving nation – Nigeria – banks are charging a very high transaction fee. Furthermore, banks take anywhere from 2 days to a week, and sometimes, even more. This is why Nigerian migrants are turning towards platforms like FAZRemit that facilitate online money transfer services to Nigeria.

In this blog, we will discuss how such online platforms are overshadowing the reign of IMTOs. We will enlist all the claims made by IMTO’s. While we do so, we will be critically arguing with their points.

Let’s Debunk Some of IMTOs’s Arguments

1. Deregulating IMTOs will give way to a completely unregulated economy

IMTOs have been accepting cash payment for a long time. This threatens security and has the potential of violating AML/CFT. Now that KYC is mandatory, it affects the instant registration service of the IMTOs. However, under the umbrella of IMTOs, financial transactions are unable to be tracked. Even if it is not true, this is used by financial regulators to undermine the advantages of IMTOs and question their business.

On the other hand, online money transfer services partner up with the banks. The unregulated economy, as claimed by the IMTOs, is a major concern for the Nigerian economy. But this is the reason why FAZRemit strongly recommends customers to avoid international cash transactions.

2. IMTOs have the best technical infrastructure

Yet IMTOs are charging a considerably high transaction fee. When compared to banks, apparently, it is very low. However, when it comes to online money transfer services, this fee is cut down by a considerable margin.

Read – FAZRemit’s Lowest Transaction Fee for Money Transfer Nigeria. But How Much?

Simply put, IMTOs take a longer time to complete KYC verification. Moreover, time and again, their system has proven inefficient to ensure that all their registered users are legitimate. This ends up in the organization committing mistakes and allowing fraudsters, money-launderers and terrorism-funding parties to do the transaction. Even if an IMTO’s intentions are right, they are paying more heed to convenience than security.

3. An international wire transfer cannot be cheap for users

Yes, overcoming this problem is what a unique service – online money transfer – does! Unlike all the banks, IMTOs and even other international money transfer service providers, FAZRemit’s processing fee never exceeds 2% of the total transaction amount. This is why FAZRemit claims to provide the cheapest money transfer to Nigeria from USA.

ReadFAZRemit’s Wire Transfer Fee – Rate List.

Why Are We Far From All-around Digital Remittance?

The world is moving towards digitization and at an explosive pace. Yet, around 100 million Nigerian adults are unbanked. The worse part is – this number is increasing at an alarming rate. There are multiple advantages of digital transactions but some limitations as well. And undoubtedly, now with poverty and more stringent international KYC laws, scalability will be a huge problem.

There is a lot of competition in the market. And this competition gets even fierce when financial transactions are involved. But with the emergence of revolutionary ideas and implementation, there is one party that always wins – You, the customer! But the question is – How many?

To put it in the most relatable words, we are uncertain of who will be sitting on the throne of international remittance. But among the characters that we know today, online money transfer services surely is the favourite. To experience fastest online money transfer to Nigeria from the USA, register on FAZRemit today!

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What Do I Get If I Remit Money To Nigeria Using FAZRemit?

What is the best way to remit money to Nigeria? How convenient is it? Does the online money transfer platform offer its services at affordable rates? Is it the fastest…

What is the best way to remit money to Nigeria? How convenient is it? Does the online money transfer platform offer its services at affordable rates? Is it the fastest online service to send money to Nigeria? Some FAZRemit users, after registering and completing the document verification, or in some cases, before that, have the question of what do they get while sending remittances or paying bills in Nigeria from USA using FAZRemit.

No Cash Involved!

First of all, because of stringent security protocols, FAZRemit does not allow any sort of cash transactions as there are multiple risks involved in it. Moreover, being a licensed and responsible online money transfer platform, we also encourage our registered users as well as all the online remittance senders to avoid international cash transfers.

100% Security Guaranteed

For both, our customers as well as banks in Nigeria, FAZRemit ensures that every single transaction is 100% legitimate. Our comprehensive document verification for remittance senders ensure that every verified FAZRemit user has no possibility of creating a high-risk transaction. At FAZRemit, we strictly abide by AML/CFT regulations. From the user’s end, we verify the beneficiary. This ensures that every transaction is as safe as it can be. If because of any reason, a transaction is not completed, there are no deductions at all. So, with FAZRemit, either the users get 100% satisfaction or 100% refund.

Lightening-fast Money Transfer to Nigeria

Once the documents are verified, and a transaction is created by the user, it only takes an instant to send money. Currently, users can get this service only during business hours, i.e. Monday to Saturday, from 9.00 AM to 5.30 PM EST. All the transactions created at any other time are catered by our team on the next business day. Currently, you can send up to $995 in a single transaction and send up to $10,000 per month using our instant money transfer.

Round-the-clock Chat & Email Support

Whatever may be your query. Be it regarding our services, registration on FAZRemit, document verification, sending remittance to Nigeria, or any post-transaction query, we have everything sorted out. You have the option to contact us via E-mail at Also, if you want to have a real-time conversation, all you need to do is – visit Our 24×7 online chat support will attend you. Talk about convenience in money transfer!

Cheapest International Money Transfer

While banks may charge you up to 10% of the total transaction cost and IMTOs charge up to 5%, FAZRemit has specific transaction slabs. Thus, if you transfer 499.99 USD to Nigeria, you will just pay US$8.99. This makes FAZRemit the most affordable platform to remit money to Nigeria at just 1.7%. Even if you make the maximum one-time transaction (i.e. $995), you still pay a maximum of 2% of the total amount.

Furthermore, there is a very high maximum limit of $10,000 per month. Considering the affordability and the accountability FAZRemit provides, our recurring customers choose us to remit money to Nigeria from USA.

Information is the Key…

Apart from just providing the best online remittance services from USA to Nigeria, FAZRemit dedicatedly works towards keeping the customers updated with the latest trends. Through our regular blog posts and active social media presence, we connect with our audience personally. We give them the most relevant information in the field of remittance, finance and banking in Nigeria. Our blog posts also cover Ghana, Kenya and all other African nations.

Furthermore, we are well aware of our audience that mostly consists of immigrants residing in USA. Therefore, it is our responsibility to provide them with unbiased and analytically backed information.

Shouldn‘t This Be The Best Way to Remit Money to Nigeria?

Apart from all the above perks, we are overwhelmed by the positive feedback of our customers. At the same time, as soon as we implement their suggestions, we also send them a special letter of thanks. Our customers make FAZRemit the best online money transfer platform, and we do everything best to become their most preferred option to remit money to Nigeria from USA.

To experience all of the above and more, register on FAZRemit and instantly send money to your loved ones in Nigeria from USA at the most affordable rate.

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IMTOs VS Banks – How IMTOs are Revolutionizing the Remittance Market?

International Money Transfer Operators (IMTOs) mostly use international banking network to carry out high-speed transactions. Licensed IMTOs, in their initial stages, were considered as a subsidiary of banks. However, because…

International Money Transfer Operators (IMTOs) mostly use international banking network to carry out high-speed transactions. Licensed IMTOs, in their initial stages, were considered as a subsidiary of banks. However, because of multiple factors, migrants, NGOs, businesses are turning down the banks. In this blog, we will put 7 reasons why IMTOs are being preferred over international money transferring banks.

1. Alternative to High Cost and Processing Time

Banks used to levy a ridiculously high transaction fee (8-10%) for international transactions and also, take a week to send money to Nigeria from USA.

But banks are not the only option to make international transactions anymore.

After complying with the KYC regulations, registered money transfer operators like FAZRemit facilitate instant transactions at the most affordable prices.

2. IMTOs Provide More Personalized Experience

Since IMTOs cater to a very limited audience, as compared to banks, they can easily make considerable changes in their operations. Banks, being process-oriented organizations, are more likely to follow a specific protocol and are adamant to any drastic changes.

So, basically, it is the difference between a traditional legacy and innovation.

Right from improving the mobile experience to timely tweaking the platform, and giving better customer support, IMTOs have the capacity to use their innovative ideas and strategies to overcome the incumbency. Actively participating in reforms and giving value to customer feedback allows IMTOs to explore the market. They are overcoming the traditional methods by proving them as tangible differentiators to become better. Consequently, the ultimate beneficiary is the customer, who can select from a pool of competitors dedicatedly trying to upgrade their game.

3. The Derisking/De-banking Blunder

Derisking pushed millions of formal transactions from a regulated environment into an opaque space. Most of the licensed IMTOs were asked by the Central Bank of Nigeria to discontinue their services which created a lot of uproar from not just the businesses but also common people. The common people stood by the side of IMTOs and the CBN then had to reform its policies.

It is evident that online money transfer scams have increased multi-fold in the past decade. And this was one of the major reasons to take such a drastic step. However, there were more side-effects than the advantages of this step.

De-risking or de-banking caused a notable ripple in the ongoing process of a global objective. Low-Income individuals from poverty-stricken nations such as Latin America and Carribean countries faced a huge blow as remittance is one of the major sources of their overall income. So, the only way is to find a solution instead of taking a drastic action like de-risking and creating more problems when there are already many.

It is, therefore, the responsibility of money transfer services to take banks and financial regulators into confidence. Both need to work in synergy to avoid such scenarios in the future.

This is where AML/CFT laws can ensure that every individual or business making an international transaction is identified and verified. This would help achieve the ultimate objective – to curb Money Laundering and Terror-funding.

4. Distrust in Banks

With 40% Nigerians underbanked and more than 60 million unbanked individuals, the Nigerian population is yet to actively participate in the mainstream Nigerian economy.

Underbanked individuals simply use their bank accounts to receive salaries and then transact the money all at once. On the other hand, unbanked do not own a bank account at all.

Because of the high level of corruption and political instability that keeps hovering above Nigerians, it is difficult for them to get over the past. However, IMTOs give them a ray of hope. MTOs ensure that the middlemen are cut short altogether. Additionally, if one is formally associated with an MTO by providing proper documentation, he or she can rely on the organization itself that it would safeguard his or her personal and financial interests.

Authorities and banks, in collaboration, have always been opposing the rise of IMTOs. I have thoroughly debunked their arguments in multiple blogs.

Read: Debunking Myths About Online Money Transfer to Nigeria

It’s not that the Government of Nigeria (GOK) and CBN are not doing their parts. In fact, CBN has claimed to bring the underbanked rate to 20%. Even this is not a very good number for a promising nation like Nigeria. However, it is, apparently, much better than 40%.

5. The Fear of Missing Out (FOMO)

The digital age has brought with it – Peace, prosperity, and convenience. However, its a shame on the part of the government as well as the MTOs that they have not been able to spread awareness of the benefits that economically and socially backward countries are missing out on.

Because of the internet boom, it is not easy for even poorest societies of the world to stay completely unaware of the important discussions, especially the ones affecting them. Still, this section of the population deserves to get the information. Banks and government institutions have got a long way to go to earn the trust of the general public.

And this benefits the IMTOs too. Overcoming the incumbency of banks, IMTOs have indeed made a mark in the remittance market. And the FOMO effect is encouraging more people to sign up for something better than what they already had. Reason being, those who have opted for this change, a majority of them, if not all, availed the benefits much more than they had expected.

6. IMTOs Focus on Details

Banks have a specific policy, i.e. to expand their horizons and audience. On the other hand, the primary objective of emerging MTOs, like FAZRemit, is to enhance their verticals.

Instead of tapping into multiple countries, FAZRemit, at present, caters to specific demographics and operated within limited remittance corridors. For all the individuals who want to transfer money from USA to Nigeria, Ghana or Kenya, the online money transmitter provides a flexible (customer-driven) yet highly secure platform.

This strategy, when implemented in the best manner, earns the trust of a specific community. In the long run, it helps emerging organizations to repeat the same feat while expanding. On the other hand, banks already have widespread connectivity and affiliation due to which most of them have similar market penetration. It could be good for business and even the stakeholders. But now, the trend is shifting.

7. Competition Among MTOs

IMTOs are constantly competing with each other. For every single international financial corridor, there are hundreds of online money transfer services. While they cut down their operational costs with the help of technology, their primary emphasis on Research and Development enables them to take a step ahead. Instead of choosing between a well-established IMTO and a bank, a customer sending money to Nigeria deserves more. He or she needs instant money transfer from USA to Nigeria at the cheapest rates with the ease of accessibility plus an assurance of high-grade financial security. This is where FAZRemit stands out of the rest.

Furthermore, an exponential increase in entrepreneurship and innovation has accelerated our progress. While some of the big names in the industry always try to set their monopoly, there are some who are different.

The virtual reality is taking over all the businesses and making them accessible to everyone instead of a specific set of people. Therefore, making an argument that in the future, all international transactions will be as convenient as opening a browser, is not a far-fetched estimation. We are on the way to make bill payment in Nigeria, and all sorts of funds transfer extremely accessible without compromising with global security. It may take time to reach that point but it’s not too far away!

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You Must Know These Points Before Sending Money to Nigeria from USA

Is this a scam? How much do you charge? Why is the Document Verification taking so long? Can I be sure that my funds will reach the correct recipient? Why…

Is this a scam?
How much do you charge?
Why is the Document Verification taking so long?
Can I be sure that my funds will reach the correct recipient?
Why is it taking this long to process the transaction?
When can I get a response to my queries?

Before sending money to Nigeria from USA, a majority of customers are skeptical about money transfer services. Moreover, this is worth it considering that there are hundreds of Ponzi schemes and platforms online. Awareness about the subject could mean the difference between making the right choice or getting scammed. Discovering new offers, benefits and services can get you the best deals and everyone would recommend it. However, scammers are also looking for such targets. This does not mean that you should drop the idea of exploring completely.

Which is the best alternative to transfer money to Nigeria online?

Instead of this, a better question would be – ‘Which is the best online money transfer service for you?’ because the answer to that depends on multiple factors. There are several platforms and IMTOs who would provide their service at a cheaper cost while others may have faster transaction processing time. Some may claim to have the best security protocol whereas others may claim convenience as their USP.

So, the question is – What do you want?


Let us discuss all the problems you may come across while searching for a reliable platform to transfer money to a Nigerian bank account from the United States of America.

Is the Operator Hiding Anything?

The credibility of online money transfer platforms has undoubtedly been compromised publicly because of the widespread active network of scammers seeking opportunities to lure in people. According to Washington State’s Attorney General, US citizens lose millions each year to wire transfer scams. So, examine the operator, its claims, cross-verify, and then avail the services with precaution.

Another prevalent method of making immoral profits in the money transfer industry is – Hidden Charges. In this case, companies or online platforms do not reveal a complete payment breakdown. Once a transaction is made, a significant amount gets deducted from the ill-informed customer.

Here’s something to ‘enlighten’ you about this topic…


While sending money to Nigeria from USA, or making an international transaction, exchange fee and transaction fee are always levied. So, make sure you are well aware of the total breakdown of the total transaction charges beforehand.
One of the recommended ways to examine a promising platform is to make a minimum transaction instead of directly going with the big numbers because of the offer you are getting. Just don’t get manipulated. Give the platform a try by taking a calculated risk. On the basis of your experience, judge whether you want to continue with it.

Is the Response Appropriate?

Almost every single money transfer platform claims ”fastest transaction”. Others would do it at the cheapest fee.
So, compare a few platforms, read about the experience of those who have availed the services. There is no point in sending money if it does not get to the right person at the right time, especially in emergency situations. Same can be said about paying absurdly high transaction costs. As per your personal preference, you need to strike a proper balance between both options.

Going a step forward, what matters more than this is the response time by the operator. Due to unforeseen technical problems, at times there could be delays in the process, however, it’s the responsibility of the service provider to address the query without any delay.


Good customer support is a major parameter to determine reliability. In case you put across your query and the service provider doesn’t respond or takes a lifetime to satisfy the customer, consider this a red flag.

How Does the Platform Ensures Security?

When it comes to financial services, security is a must. To ensure that the funds you transfer reach to the correct bank account(s) and that not a single step violates any AML/CFT regulations, a responsible money transfer service provider must have proper documentation protocol.


The money transfer operator must ask for KYC documents from you. Also, the company must verify details of the beneficiary or recipient’s bank account.
This system not only secures a user’s hard-earned money but also ensures that the platform has strict guidelines against unlawful exercises.

How Serious Are They About Accountability?

Having a personal dashboard certainly makes the money transfer experience extremely convenient. But at the same time, you must have a recorded transaction statement from the service provider as your personal copy.
There have been multiple instances in the remittance market that while wiring money to Nigeria from USA, the money gets deducted from the user’s account but does not reach its required destination. Therefore, it is important that you keep a copy of the transaction until the funds are completely processed.
You can use that receipt to put up a strong case for your refund. And if the platform does not, you can easily get your funds through the legal channel.

Therefore, it is important that you look for a service provider that respects and encourages customer empowerment.

FAZRemit, the one-stop online money transfer platform, ensures that anyone and everyone sending money from USA to Nigeria, Ghana or Kenya, gets the best overall experience.


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What are the different ways of money transfer to Nigeria from US?

In this era of technology, completing the basic banking deeds have become an easy task. Today one can transfer money not only from one state to another but from any part of the world to another…

In this era of technology, completing the basic banking deeds have become an easy task. Today one can transfer money not only from one state to another but from any part of the world to another. With the help of banks and money transferring platforms, it has become very easy to transfer money and to complement these transfers, a complementary currency conversion (or in some cases, as additional charges) with the basic transaction is also available. In this article, we’ll discuss the ways to money transfer to Nigeria from US.

Types of International Money Transfer Services

International money transfer is a broad topic and it is divided into various segments. Generally, international transfers are made either for personal use or for professional and/or business use. Basically, if someone wants to send money to Nigeria online, it is best to use interbank transfers, through wired transfer, private money transferring platforms or through bidding sites. Let’s take an overview of these options –

Bank Transfer

Generally, every bank has its own rules and regulations to transfer the money. Since, in the general population, there is a fear of fraudulent activities by private organizations, therefore, for big transactions, especially for FIAT currency exchange, banks are considered the most reliable option by the most.

However, because of the strict and in fact necessary policies by the government, such institutions can be tracked down and are accountable for any illicit activity on their platform. This has empowered the individuals and businesses who have the options to choose from the three most common ways to send money, namely, ACH which is the cheapest, wire transfer – the fastest and bank transfers that are considered as compared to be secure. Next on the list are

Private Platforms

Platforms like PayPal, Swift wire charge a fixed percentage or cut and transfer money from one country to another. These platforms operate on their own and provide comprehensive security throughout the entire process. These platforms are used for any country, for instance, if one seeks out for money transfer to Nigeria from US or wants to make a transaction from any part of the world to another, he or she can do easily it through online payment systems. FAZRemit, being one of those sites not just provides the fastest platform to wire money to Ghana, Nigeria or Kenya from US, but also ensures that the transaction cost is the lowest, and that only verified entities, be it individuals or businesses, are involved, thereby making the process highly reliable and secure from the point of view of both, the customers as well as legal entities.

Bidding Sites

This option is not so popular among the international money sending customers but it can surely help in achieving the task. All that one needs to do is create a task and all the money transfer operators bid on it. Although it provides a competitive rate for the customer, at the same time, this is a rarely used option because of the additional cost involved due to the involvement of a middle-man.

What is IMTO?

In the overall International money transfer market, which is currently worth more than a trillion dollars, there are a few fraudulent money transfer platforms that are luring in individuals with schemes that are too good to be true.

To stop such activities, financial regulatory bodies such as Central Bank of Nigeria has licensed only a few IMTOs, and it is highly recommended that one chooses from them. Few of these registered IMTOs facilitating money transfer to Nigeria from US in the US-Nigeria corridor include:

  • Smallworld Financial Services (licensed partner of FAZRemit)
  • TRANS-Fast Remittance,
  • WorldRemit limited,
  • UAE Exchange Centre LLC,
  • Wari limited, and
  • Home Send S.C.R.L.

Nigerian Banks v/s IMTO

Generally, it is recommended that one must choose banks over IMTOs but there are multiple reasons why the latter is steadily gaining its speed and the global market is undergoing the paradigm shift. First is the scale at which they can operate. Unlike banks, IMTOs are constantly upgrading their services based on the customer feedback while on the other hand, there are no groundbreaking upgrades in the banks’ functioning which, in the long run, could prove fatal for the banks. Secondly, the significantly low processing time plus the overall charges levied by IMTOs has always been much ridiculously low as compared to banks.

In Nigeria, this list also includes one more problem, i.e. distrust among the common people for the banks and especially government agencies which although have gone through challenges over the years but have not delivered on their promises of providing the most basic amenities to the common people. This perception is also shared by the immigrants and remittance senders.

How to find the best money transfer to Nigeria from US?

Money is an essential and hard-earned commodity, and it is one’s obligation if not the only option to check all the criteria before opting for any money transfer providing services. To put it in a simple manner, there are just 4 criteria to find the best money transfer options –

It is easy to go on any platform and get a persuasive webpage that would try to attract a user. Basically, this is the purpose and the sole objective of creating any website, moreover, any online content but it in the end, what matters the most for a user is to find ‘value’ that can only be achieved through a balanced and analytical approach to make the final decision.

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Wire Money Nigeria – Millennials Shaping The Economy

The millennials have the responsibility to correct the mistakes of the past to lay a strong foundation for the upcoming generations and it all starts with education!


  1. Nigerian diaspora is the most successful ethnic community in the United States of America.
  2. The Nigerian government needs to make policies that encourage formal remittance services that wire money to Nigeria.
  3. The educated young Nigerian immigrants have the responsibility and show a promising ability to drive the wheel of global socio-economic welfare.
  4. Remitters need to understand all the options before availing any online money transfer service offered by banks or IMTOs.

“Migrants are bringing down the economy. They are a threat to the United States. They undermine the All-American lifestyle. Migrants are – very bad!”

You must have heard similar language or context if not exactly the same sentences used for migrants even by “some of the most powerful people in position of authority” but the question arises –

  • Is it true?
  • What are the immigrants doing in a different country?
  • What is their own country doing to stop the migration?
  • How are the millenials contributing to the development of their native country?

To get answers to all the questions one by one, it is strongly recommended that you continue to read this blog. Putting it in the most simple terms, the hypothetical threat imagined from even legal migrants by the general population is a clear indication of lack of knowledge of the perceivers. The ones who claim migration as evil, first of all, need to understand that the most powerful nation, United States, as we know it today, is a land of immigrants. In fact, there is no ‘American culture’ so to speak. The amalgamation of cultures, rituals, celebrations, ideas, opinions, dissent, and the diversity has led the country to acquire its current status and for that, a huge amount of credit goes to the 13.5% population consisting of migrants from across the world. Among them, one of the most successful ethnic group is the Nigerian diaspora – the young community which, as per the World Population Review, has a median national age of just 18.4 years. Apart from providing a highly educated workforce to the migrated country, the Nigerian diaspora currently contributes US$22 billion to their own nation’s GDP by wiring money to Nigeria.

Value of Remittance in Nigerian Economy

To understand the importance of remittance, we can take a look at the inflow of remittance in Nigeria that has a 9% share in the overall global International remittance market and more than 6% of its own Gross Domestic Product relies on it. Moreover, the total money transfer to Nigeria from all over the world is estimated to cross $42 billion by 2022. Further, this sub-Saharan country has a 75% share in the total remittance inflows within the African sub-continent.

The Federal Republic of Nigeria, being a steadily developing country in West Africa, spends almost $1.15 billion annually to overcome poverty through public programmes. In 2006, Nigeria became the first African nation to repay its debts (which is estimated to be $30 billion) owed to the Paris Club in which the international money wire transfer contributed a significant amount as the total transactions went over the roof from $1.063 billion in 2003 to $16.932 billion in 2006.

So, in this article, we will discuss how the remittance market has become a major source of income for the Nigerian population and how it is acting as a gateway for high-end investors. We will shed some light on the steps that the government must take for the upliftment of this sector and the challenges they are likely going to face along the way. Further, we will understand the role that the Nigerian youth has to play and how they can take the first and the most important step in this direction.

Underperforming Nigerian Government

Nigeria has 82 million hectares of arable land out of the 91 million total land area with 30% of its population involved in the agriculture sector. However, lack of tools and infrastructure has led to a highly underperforming agriculture sector, because of which the Ministry of Agriculture and Rural Development claims to spend more than US$23 billion on food imports to feed its 186 million population.

Figure: Underperforming Nigerian agriculture

Furthermore, in 2005, Nigeria had the highest deforestation rate in the entire world. Because of the lack of resources and the exploding population, young Nigerians are moving out of the country seeking better opportunities. Because of this trend, famously known as Brain drain, Nigeria has also become one of the developing nations witnessing a high deficit of experts in medical, engineering, academics and other professional sectors. But that being said, the multinational state comprising 250 ethnic groups with the third-largest youth population after India and China, undoubtedly has an immense potential to spearhead the next agricultural revolution.

Although the country is struggling to keep a hold of their talent and minds, the same migrants are contributing in a different manner. In 2007, the International Organization for Migration announced a fresh data pointing to the dramatic increase in Nigerian remittance inflow from $2.3 billion to a whopping $17.9 billion within just a short span of 3 years. But these numbers do not give a detailed account of the problems that this trend entails which includes the channels being used for sending money internationally.

Why Nigerian Formal Remittance has been on the Back Foot?

Since the last 50 years, as stated in the World Bank’s Excerpts for International Conference on Migrant Remittance, Nigerians have been relying heavily on the money sent by migrants residing in developed countries such as the United States of America and the United Kingdom. Because of the distrust in the Nigerian formal financial institutions that have been unsuccessful in providing the general population with minimal requirements such as competent transportation and communication facilities, both the Nigerian senders as well as receivers prefer the informal international transactions which currently dominate the US-Nigeria and UK-Nigeria remittance corridors.

So what should be done about that?
– Improve public policies especially targeting the millennials’ needs.

Education – The Fundamental Change

After becoming a republic in 1960, lack of stable policies because of 30 years of intermittent governance and military rule crippled multiple sectors of Nigeria including education, health, and economy.

Without a unified set of education policies for the booming population, as per the UNICEF’s Nigerian Education Statistics, 45% of Nigeria’s 171 million population is under 15 years of age. With a concerningly gigantic number – 10.5 million – Nigeria has the world’s largest out-of-school youth population. Only 20.1% education accessibility because of lack of government funding along with social factors like early marriages and low perception of the value of education among the general population has resulted in, as education activist Malala Yousafzai puts it,

“An education state of emergency in Nigeria”

Economic prosperity can only be achieved through proper education and administrative support. Nigeria is in a dire need of government-funded education for which the Ministry of education needs to implement an inclusive and functional education system. With the 3rd largest youth population in the world, the country is not short of any potential but the question arises – how can Nigeria plan for their future while it is heavily dependent on Oil trade that does not seem to have a very bright future.

The Future of Nigerian Oil and Gas Export

Nigeria relies on oil and gas trade as 83% of its export revenue, two-thirds of the public revenue, and 9.4% of its GDP depends on it. Although the myth – “oil is reaching total depletion” – has been critically refuted by several environment scholars but the research and development in ‘clean and renewable energy sources‘ have been showing promising results with a welcoming global response which could affect the oil trade. This implies that it is high time for the Nigerian government to prepare for an oil-less future even if not because of the lack of gas then because of the undergoing paradigm shift which was noticed in the third quarter of 2018 with a 4% contraction of oil sector as compared to the previous year.

Meanwhile, it may seem from the outside that the Nigerian economy is highly dependent on oil exports, which it currently is, however, it would be wrong to underestimate the diversity of a country that, as per McKinsey Global Institute’s ‘study of the country’ report, can become the 26th largest global economy within the next 12 years. The steady improvement of 1.5% in the non-oil sector in the second quarter of 2018 followed by 2.3% in the third quarter indicates remarkable efforts by the Nigerian government to achieve economic and fiscal stability by constructively using their abundant resources and a strategic geographic location.

Figure: Nigerian Government Emphasis Shifting towards Economy

The constantly growing consumer class paired with an energetic youth fueled by a high entrepreneurial spirit are also attracting investments from across the globe. The developing trend in Nigeria is being viewed as an emerging business opportunity for the investors who are envisioning to tap the largest African economy estimated to provide a $1.4 trillion market by 2030 for food and non-food consumer goods. Even in this sector, however, the government needs to facilitate the ease of doing business.

How can they do that?
– By NOT de-regulating MTOs and other businesses.

Instead of hindering the success of the emerging industries, if the Nigerian government provides adequate support for the taxpayers and public beneficiaries, and formulates modern trade policies, it can pave the way and could significantly accelerate the process of leading multinational corporations contributing to the Nigerian economy and social welfare. Apart from foreign endeavors, a long-term and stable federal budget allocation for education, healthcare, infrastructure, and security can also check brain-drain. Moreover, positive steps could also be a boon for Nigeria reversing the brain drain to return-migration, thereby brain-gain.

Now that we know the extent of the impact that good governance can have, especially for the Migrant nation, let us take a look at some of the numbers showing how despite facing multiple challenges, the Nigerians have made their mark in the world.

Contributing More than the Natives

Immigration has always been a debatable topic but for a nation’s economy, especially when we consider the United States of America, migration has brought a fortune. Simulations by ProPublica show how immigrants can further escalate the American economy by supplementing approximately US$54.5 trillion.

Figure: Simulated contribution to US economy by immigrants

You be the Judge…

Further, let us have a look at some of the statistics about the performance of Nigerian migrants who are doing pretty well in the United States,

  • The average household income of a Nigerian-American is $62,351 as compared to the overall average of $57,617.
  • 37% of all the Nigerian-Americans hold a bachelor’s degree and 17% have master’s.
  • With just 1% of the total black population in the US, 25% of Black Harvard students are Nigerian natives.
  • Other than holding reputable positions in medicine, law, and engineering professions, non-conventional career choices including NFL and Hollywood have also welcomed and embraced Nigerian-Americans.

This trend is similar in European nations such as the United Kingdom, Italy, Spain, Germany, Ireland and all other destinations across the globe where 33% of the total Nigerian migrants move to and send remittances from. Consequently, overcoming discrimination and racism, the Nigerian diaspora has excelled and contributed to both the migrated country as well as Nigeria, directly or indirectly. In line with that, the eventual beneficiaries, i.e. the general population, especially the youngsters, are responsible for the development of the country and as mentioned earlier, education has been and will continue playing a pivotal role in uplifting Nigerian socio-economics while repaying what they owe to the migrated country better than their own natives.

Being part of an unstable and war-stricken nation, Nigerians and especially the millennial generation has come a long way as compared to other nations like Syria, Iraq, and Afghanistan. Also, migrants, in general, are able to sustain themselves on their own, however, for some people living in their home country (Nigeria, Mexico, India, China et cetera), remittance could be the only source to survive and/or to overcome personal problems, financial setbacks, political instability, terrorist attacks or even natural disasters.

Although currently there is no authentic data classifying the remit senders on the basis of age, education profile or financial status, the purpose itself makes a compelling case why all the migrants who send money to Nigeria should understand how they can take the full benefit of international online money transfer services.

How to Select the ‘Best Money Transfer Nigeria’ Service?

Online research and analysis of the remittance market by FAZRemit provided a list of the top 5 search queries used by the customers on different search platforms so as to wire money online, namely,

  1. Money transfer to Nigeria
  2. Wire money Nigeria
  3. Send money to Nigeria online
  4. How to send money to Nigeria
  5. How to wire money online

To address all the aforementioned search queries, let us discuss how one can select the best money transfer service to send remittances to Nigeria. The US$689 billion worth global remittance market has been prompting IMTOs from across the globe to dive into this huge financial pool that carries unparalleled opportunities for small to large scale businesses. To increase their clientele comprising of individual remittance senders and even MNCs conducting online money transfers, banks and IMTOs have been constantly upgrading their services to provide a wide range of international money transfer services. With so many choices, the customers thus have the advantage to select the best option on the basis of 4 major factors:

1. Is it affordable?

This is the reason why most of the remittance senders are turning towards IMTOs instead of banks as the average transaction fee levied by banks to send money to Nigeria from the United States has always been much higher. As per the last survey conducted by the World Bank in June 2017, international money wiring via banks is currently 1.47% higher than the global average whereas most of the IMTOs charge 3.06% lesser than the banks.

The cheapest wire transfer includes the international Automated Clearing House (ACH) payments, also known as a direct debit or electronic transfer, in which the transaction fee is the lowest, and the service provider, most of the time, provides additional discounts to the recurring customers. At the same time, however, there have been instances where operators charge an additional fee without giving any further notice to the customers which could result in overdrawing money from your account making this a huge downside of the ACH payment.

2. How fast is the money transfer?

While ACH is the cheapest, it can take anywhere from a few hours to seven business days to complete the transaction. Overcoming this problem is wire transfer which is the fastest in the ‘international money transfer’ section.

Figure: ACH Payments VS Wire Transfer

Although this digital money transfer is more expensive, one may find it comparatively much more difficult to deal with the bank for this service because of the stringent documentation and tedious verification. Moreover, some overseas banks and credit unions could also charge an additional fee to receive such transactions. This is where IMTOs can help one to avoid such problems.

In case of emergency, when one requires his or her money to be transferred instantly, just like wire transfer, there are several other options available for everyone. All one needs to do is – look at the right place.

3. Is it a safe money transfer?

Wire transfer is fast but possibly the only disadvantage with this type of transaction is the inability to reverse it. Even if some agencies including banks and IMTOs could provide such a facility but this could result in you paying a hefty fee for the same. Meanwhile, it is crucial for a customer to conduct a background check of service providers before availing their service. Due to strict AML laws, the Nigerian government has licensed only certain IMTOs. So, even if you are getting alluring discounts, you must either choose the certified institutions or their subsidiaries. It is important to notice the documentation and verification that is being done by the service provider. In case the MTO does not ask for mandatory documents or gives you an offer that seems ‘too good to be true’, it becomes even more important that you get your query resolved.

This is one of the main reasons why individuals prefer banks for large money transfers. However, even if you are using a certified Money Transfer Operator, you are more likely to get similar reliability if not better but without any doubt, considering the lack of investment in infrastructure and outdated mechanism in the public sectors in Nigeria, you can be guaranteed a better service right from the first point of contact to the final transaction and even beyond.

4. Are there any hidden charges?

To put it in a simple manner, no business can be conducted without any benefit. So, if you see any free international money transfer option, you must know that the concerned operator, in advance, has combined the exchange rate and transaction fee in the total charges. So, it is important for the customer to search and then verify the service provider claiming to provide you with the most affordable service. In simple terms – Save yourself from the ‘hidden fee’ trap.

Referring to all the aforementioned factors before actually transferring money can assist anyone to make a safe, secure and fast international money transfer at the most affordable price.

The baton of ‘economic change’ has already been handed over to the next generation – the millennials – and it is their responsibility to make analytically sound decisions by gaining impartial knowledge while minimizing the risks and avoiding the mistakes committed by the previous generations in order to avail the full benefits of each and every opportunity.
And this is how millennials can revolutionise the future by actively taking part in one of the most beneficial trades that has a promising future for the Republic of Nigeria.

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Online Money Transfer to Nigeria – Evolving Remittance Trend

Sending money to Nigeria through reliable IMTOs is fast and easy but such businesses struggle to operate without the cooperation of the authorities.


  • Migrants using international remit services contribute to 9% of the overall global GDP.
  • Online money transfer to Nigeria, Ghana, Kenya, and several other developing nations is the backbone of their economy.
  • Instead of introducing de-risking laws, banks and International Money Transfer Operators (IMTOs) need to work together to develop the global economy.
  • The blockchain is on its way to bring the next financial revolution.

In the annual year 2018, as per the Prospectus – Migration and Remittances Data, the global market has witnessed a remittance flow of up to US$689 billion which is already an increment of 10% from 2017. Moreover, it is estimated that this flow would at least increase by 3.7% by the end of 2019. To genuinely assess the large scale of global participation in international money transfer, we can see that the list of countries receiving the highest remittances in the world includes the world’s fastest-growing economy – India, and the most populous nation – China. Followed by the Philippines and Mexico, comes the democratic secular country of Nigeria around which, in this article, we will be discussing the recent trends in International remittances, along with the problems that this industry is facing, and lastly our data-driven predictions.

The Nigerian Diaspora

Almost 67% of the total remittances sent from across the world to Africa are targeted to just one country – Nigeria. World Bank studies show that international money transfers make a total of 6% of the total Gross Domestic Product (GDP) of Nigeria.

Figure: Contribution of remittances in total GDP for Nigeria, Algeria, China and Venezuela from 1981 to 2015.  

This money is sent by thousands of Nigerians among the 17.5 million migrants who have migrated to a different country for a better opportunity to secure a decent income source and a better lifestyle. With those numbers, it can be implied that the Nigerian population is spreading across the globe and while there are hundreds of extremists opposing the migration, it is imperative to understand the ground reality and basically an answer to the question –

Why do they have to migrate? How the remittances sent by migrants or in fact, any third-party can affect an entire diaspora?

The need for International Remittances

International Organization for Migration records shows that Nigerian migrants living in the United States make the largest portion of the remittance money, followed by the United Kingdom, Italy and Canada. A whopping total of $22 billion, as per the 2017 study, was part of international money transfer to Nigeria from all across the globe.

Figure: International remittance corridor

Remittance Prices Worldwide Database has identified multiple authorized corridors for 32 countries to send remittances to 89 developing countries that require monetary help to develop themselves. But there is a general misconception about remittance.

A majority of the population, who either have not availed the remittance service or are trying to understand the concept, considers international money transfer just as a process to help their friends and relatives to get economic assistance by draining another society instead of working in their own country.

“But there is more to it!”

Money transfer to Nigeria, Ghana, Kenya or any other developing nation across the globe enables the remittance senders to:

  1. Buy international property
  2. Support their family members by:
    • Paying for their children’s or even grandchildren’s education
    • Compensate for the daily expenses of their family
  3. Invest in an international venture
  4. Pay off the debts of their close ones
  5. Submit the insurance installments
  6. Help international population in need of help because of:
    • Poverty
    • Political instability
    • Civil war
    • Terror attacks
    • Natural disasters

Basically, this process supports the aspiring population to lead a better life. Out of a big pool of 153 developing nations, in 36 countries, including Nigeria, remittance makes up a bigger portion of the economy than the combined capital flow generated by public and private sources.

Remittances, apart from helping the natives to develop economically, allows them to connect themselves to the banking system. Once they are connected to the economy, even the government can get multiple data from their transactions and take better actions for their upliftment. Where there is a demand, there is an opportunity, and opportunity attracts business. So, private institutions have also jumped in this sector.

Enter – International Money Transfer Operators (IMTO)

The competition among money wiring platforms is based on their ability to provide a faster, affordable, and most importantly, safer transactions. In recent years, the remittance industry has seen a boom, both in terms of users (as discussed above) as well as the number of private companies who want to play an active role in an industry with $4.8 trillion transactions every day.

International Money Transfer Operators either use an internal system or use cross-border banking network to conduct the transfers. In the initial stages, such operators faced a few setbacks because of the trust issues, however, with the time, they have improved their services. Moreover, referring to the World Bank’s Remittance Prices Worldwide June 2017, a World Bank survey of 23 banks showed that the transaction fee charged by banks is much higher than that of the international money transfer operators. Although in 2017, the banks decreased their processing charges from 9.36% in 2016 to 8.8%, the IMTOs were not far behind in following this suit and dropped their fees as well.


Figure: International money transfer fees of banks and MTOs in the United States

Apparently, businesses follow the Metcalfe’s law which states that:

The ‘Value of a network’ is directly proportional to the square of the number of connected users.

Since the latter number (customers) is exponentially increasing, these organizations compete with one another to provide competitive offers to the users so as to claim a bigger share of this large industry. On the other hand, while the number of transactions has been on the rise, it is very contrasting to see that the transaction fee levied by the international banks had been constantly increasing from 7.23% in 2013 to up to 9.36% in 2016, and it is still very high as compared to all the other choices that the remit-users have. Since the consumers have a far better choice than that with the IMTOs who have never charged over 6.88% even in 2012 and are charging as low as 5.5% transaction fees, it is quite obvious to understand why the paradigm of bank remit is shifting towards the private organizations.

There is Always a But…

National Banks across the globe, especially the Central Bank of Nigeria, often has been called out for taking ‘Draconian decisions’ to revoke the license of International Money Transfer Operators by using some catchy phrases such as ‘for a greater economic good’ and ‘to avoid undermining of a country’s foreign exchange’. Such policies do not just impact the businesses but also have a drastic effect on the user-base which at present consists of a 20 million strong community in Nigeria itself.

Debunking Myths About Money Transfer to Nigeria…

The Central Bank of Nigeria (CBN) has been clamping down on several money operators which constitute a significant portion of the overall international wire transfer facilitators. However, because of a strong retaliation from the majority of operators, CBN had to allow all the organizations who according to CBN Guidelines on International Money Transfer Services in Nigeria (2014) were provided a renewed license. The ground reality in this problem is not the regulations but the myths that have been circulated about the operators which affect the overall business. So, let us go through some of the myths and understand why it is important to expose them.

De-risking is important for public security

De-risking puts legitimate bank customers and licensed IMTOs at risk, and there have been hundreds of millions of instances in which banks use AML/CFT laws to ban multiple remittance accounts. If a consumer cannot send the money through a legitimate process, it is evident that because of the extreme de-risking laws, he or she would either have to opt for less secure or even illegitimate channels for the same. Pushing remit customers, who are in genuine need of decent service, to such platforms which do not have an adequate AML/CFT clearance could result in far worse results for the vigilance authorities, putting the entire process in a jeopardy.

Verifying the IMTO records is not worth the investment

In the digital era where consumers are already looking out for better service in terms of cost, transaction speed, and overall experience, banks do not promise all of those. Therefore, IMTOs are preferred. The basic point behind their argument is that:

  1. IMTOs are used by some individuals for a limited number of transactions which could be very challenging.
  2. They have a ‘high-risk’ factor because the transaction tracking by finance regulatory bodies becomes an even more challenging task when there is an intermediary.
  3. They may not have adequate regulations to keep a check on their transactions and services.

In such a case, instead of revoking the license or putting a complete ban on their operating bank accounts through de-risking or de-banking rules, it is a wiser choice to explore a better solution by framing a clear set of guidelines as per the norms of state and federal regulators instead of avoiding the question completely.

This must include the implementation of strict KYC record-keeping rules to ensure security for both the transactions and the intent of the user. Furthermore, the Financial Institutions Examinations Council and similar inter-agency groups must expand their section to include legitimate IMTOs under non-bank financial institutions. Once this regulation is followed, the MTOs can not only improve their AML/CFT monitoring capability but they can also lower their transactional fees as well as average remittance size, further reducing the possibilities of money laundering.

What does the Future Have in Store?

Money is basically a simple concept of credit. There is no physical value to it other than the promise of granting a specific value to the rightful person. Started from the barter system where the exchange was conducted under an agreement between the consulted parties, the same has been evolving. Then came coins which facilitated the ease of transactions. Further, paper money introduced in China was another upgrade for the commerce. In the 19th century, England defined gold as a standard for the transaction which then became a norm that has continued till date. As globalization hit the market, native currencies were obsolete making gold a universally accepted and adapted standard.

Figure: Evolution of Trade – From Barter to Bitcoin

Although during World War I, even gold was temporarily abandoned by various governments to finance the war, however, with the emergence of a stable US government backed with a strong economy and effective laws, the United States Dollar (USD) was considered as the world’s reserve currency. In the 1950s, credit cards came into being; followed by ATMs, and then the Society for Worldwide Interbank Financial Telecommunication (SWIFT) provided a reliable platform for all the financial institutions to send and receive information while conducting any international transaction(s). The market evolved further and after a few scuffles at the higher position between Bill Harris, Elon Musk and then Peter Thiel, PayPal – a multilingual worldwide online payment portal was born in July 2015. Therefore, we can conclude that since the time we had known about finance, money has shifted its shape, form to facilitate a simpler and faster system.

In line with that, the crypto and Blockchain market is estimated to become the next big change where mankind can explore another factor – inability to trust! With Blockchain’s distributed ledger, all the previous financial exchanges can simply fade away as it resolves all the concerns regarding speed (which could be drastically cut down from minutes or a few days to just an instant) and security (encrypted transactions and unalterable proof of work (POW)).

Numbers Don’t Lie

Although there are skeptics opposing every new idea, and the emerging industry could face certain hiccups along the way such as a decline in the initial coin offerings (ICOs), no one can ignore the 280% rise in the VC (Venture Capital) investment in the Blockchain technology in 2018 as compared to the previous year.

Figure: Venture Capital (VC) investment in Blockchain (in black) and Crypto-related firms (in grey)

Leading investors around the world are viewing adequate research and development in this technology to have the potential of inducing another financial revolution. Consequently, they are enrolling themselves in this evolving technology to be a part of the early 21st-century that could just be a vital financial history in the making.

Finance and economics are dynamic entities that influence each other in multiple ways. They would constantly go through multiple upgrades, multiple emerging businesses would fall and other giants will emerge. All in all, during this course, the world would witness drastic changes. Meanwhile, in the current globalized world, where 3% of the total population is generating over 9% of the global GDP, and 800 million people depend on an action called – remittance, it is a challenge, moreover, a responsibility of the regulatory bodies like national banks and governments, and remittance service providers to work together and pave a convenient, safe and affordable gateway for the users to get what they aspire for, moreover, what they actually deserve.

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