No matter how much Technology – an amalgamation of science, techniques, skills, and processes – advances, it will always have an ultimate objective – to make your life convenient. We…
No matter how much Technology – an amalgamation of science, techniques, skills, and processes – advances, it will always have an ultimate objective – to make your life convenient. We can apply the same to international wire transfers. There are millions of searches for cheap, fast and safe international money transfer providers. Ease of information because of technological advancement has already led to competitors implementing the best methods to achieve the basic concept of a market. But the unanswered question that plays a major role in a customer picking one service over the other for sending remittances from USA to Nigeria is whether a service provider can facilitate convenient money transfer to Nigeria from USA.
But How Do We Define Convenience in Remittance Industry?
The best counter-argument I found out while exploring an answer to this question was –
“Convenience is a very subjective term”.
And I actually agree with this sentence. It is basically a state of being able to complete a task with ease. What one could term as a tedious task, for another, it could be the easiest.
So, what are the ‘’tangible’’ parameters that make an IMTO the most convenient money transfer service provider?
Obviously, a financial organization or platform has to provide instant transactions online at the most affordable processing fee. But we will not address them in this blog. Because there is a different concept of ‘convenience’ to be discussed. Is it all about getting the brand visible to the client? How can one aim for perfection, if that is an actual thing at all? Or is it just about the journey that all money transfer platforms need to take to become better than their competitors? Let us enlist all the parameters of a convenient IMTO.
1. Large Area Coverage – Boon or a Curse?
In the USA-Nigeria remittance corridor, FAZRemit received hundreds of queries from the customers regarding the service areas. Broadly, they are:
“Can I send Money from XYZ (American State)?”
“Can I send money to XYZ (Nigerian bank)?”
Big IMTOs have a huge customer-base distributed in multiple countries, however, their services come at a cost. Such IMTOs have a wide coverage area. It is best for their business’ profit. But is this what customers want who want to send funds from USA to Nigeria?
On the other hand, emerging platforms are giving them a tough time, especially when it comes to very selective demographics. Apart from simply the lowest processing fee and faster transaction, promising online money transfer service like FAZRemit are helping customers get the overall experience they want.
For instance, FAZRemit has a license to do business in the following states in the United States of America:
From an organizational point of view, this could have certain limitations for a business, most of all being, the inability to tap into a bigger market. However, overcoming the FOMO effect, these platforms are able to concentrate on fulfilling the users’ demands and understanding their needs. Additionally, as per the customer feedback, they can easily monitor their own performance and make instant changes as per the customers’ feedback. Overall, this benefits the end-user, i.e. you, the customer.
2. Ease of Navigation within the Platform
Keeping it simple and goal-oriented must be the objective of a convenient money transfer service. This includes an interactive UX-design while keeping the overall outlook subtle and easily understandable. One should not face any difficulty in navigating the website. If you use any query and you don’t get what you are looking, well then, what’s the use of such a platform?
After all, your primary objective of visiting a website is to send money to Nigeria from USA. And if you are unable to achieve that task, well, the primary goal of the money transfer platform been defeated.
This does not mean that a good money transfer should totally discard the design-complexity. A good analogy to explain this would be the difference between the highly customizable Android and extremely simplistic iOS. Android has its own set of loyal customers but there is a reason why iOS is considered better by a majority.
3. Minimum document requirement
Right from the customer’s first point of contact, i.e. website, a convenient money transfer service would focus on keeping the data-entry and document submission to a minimum.
Cold-heart truth is that users hate KYC! Most of them do not apply for a new money transfer service provider. Why?
Not because of the fear of sharing details but because they do not want to go through the wearisome process of document verification. Talk about an individual’s hunger for convenience!
However, even if a regulated money transfer platform wants to, it cannot and should not compromise its legal and moral obligations. This is where KYC documents are important. But where is the convenience in this?
FAZRemit only requires 2 types of documents from its customers – Identity and Address Proof. Furthermore, generally, document verification for a customer takes a few hours to even a couple of days, or even more. However, at FAZRemit, if the documents are clearly visible, then the document verification can be concluded within a few minutes after which the user can start making payments to his or her beneficiary.
4. Payment Options – Credit, Debit, Bank Account
After the registration and verification part, we get down to the real deal – the Payment. Option to use a credit card, debit card or internet banking allows users the ultimate flexibility. It gives them the power to Choose!
Every single IMTO has a certain maximum limit for a single transaction to avoid excess paperwork or for security purposes. Although there are multiple points in favor of IMTOs in the ‘IMTOs vs Banks‘ debate, this is one of the points where banks have the upper hand.
But, according to FAZRemit, till March, in 2019, the average money transfer from USA to Nigeria in a single transaction is considerably low. FAZRemit allows a minimum transaction of $25 and has a maximum limit of $950 for a single transaction. This limit is just another point that’s put forward but it doesn’t change anything as customers, who want to send money to Nigeria conveniently, as such, do not seem to have any problem with this trade-off.
Same goes for the number of transactions that a user can make. Through FAZRemit, a verified customer can make an unlimited number of transfers to his or her beneficiaries in Nigeria from USA.
Furthermore, the user can save a beneficiary and make recurring payments. Also, you can make a payment in your dashboard and schedule it for later.
5. How You Respond is Important…
The crucial factor, and apparently, the most important one, that defines real convenience in sending money to Nigeria is, undoubtedly, Customer support.
You would not want to talk to a representative who keeps running to the technical team to get answers of every single question. At the same time, the last thing you want from the support agent is to use jargons that you are completely unfamiliar with. In fact, this would be absolutely frustrating!
Be it instant chat support or prompt email response, an experienced and well-versed customer support staff not only addresses all your queries but also maintains a comfort level during the conversation.
FAZRemit’s customer support team ensures that you get the information you want in the most convenient way. Their primary objective is to strengthen their reliability while making the customer feel comfortable.
For a better explanation of all the FAZRemit’s services and to give the best response for FAQs, they even refer to YouTube videos and images that can help customers in an even better fashion.
You don’t want to type? They’ve got it covered!
Undoubtedly in the competitive digital world, the competition among IMTOs and in fact for all service providers finally comes down to the user experience. But at the same time, is the responsibility of the service provider to strike just the right balance between its aspirations to facilitate the most convenient money transfer to Nigeria without compromising with the mandatory security protocols. And, it should not be wrong to expect the same from the customers as well.
Fast, convenient and affordable money transfer to Nigeria has always been a dream for Nigerian migrants living across the globe. Although the average remittance cost to Nigeria dropped to 10%…
Fast, convenient and affordable money transfer to Nigeria has always been a dream for Nigerian migrants living across the globe.
Although the average remittance cost to Nigeria dropped to 10% from 14% in 2008, it is still the highest in the world. Furthermore, all the Sub-Saharan nations suffer from the same problem. Nigeria’s share of overall remittances inflow has decreased, but that signifies something else. Irrespective of the high international transaction cost, other African countries have embraced the trend and are currently witnessing a boom in the remittance market.
For the largest economy in Africa – Nigeria – remittance is a major economic driver. In 2017, overall remittance revenue surpassed oil revenues of the so-called ‘oil-driven’ Nigerian economy by $2 billion. Moreover, the recorded remittance figure, as opposed to oil revenue, was considered being a conservative estimation. Reason being, only 40% of the Nigerians are banked.
Further, the rest 37% unbanked Nigerian population relies on the informal revenue inflow. This doesn’t mean that all of them are receiving remittances, however, a considerable amount of people do.
Among those, there are many who are skeptical about the regulated channel because of their distrust in the government and financial institutions. However, it is the responsibility of the government and the money transfer operators (MTO) to spread awareness about the services that provide affordable money transfer to Nigeria online. Such individuals and families must be made familiar with the benefits of online international transactions.
In this blog, we will lay down some points why Nigerians need to look a reliable and affordable platform to send money to Nigeria from USA one and how can they choose the best of them all.
1. Pay Less, Pay Smart – Choose Wisely
Gone are those days when you didn’t have any choice. Either there were limited banks or selected Money Transfer Operators. The digital world has eradicated all sorts of restrictions. Nowadays, just by browsing through the internet, one can easily compare one platform with the other and select the best one as per his or her specific requirements.
Removing the banks out of the question because of their exceptionally “generous” international transaction rates, an average affordable money transfer to Nigeria would cost anywhere from 5% to 7% of the total transaction.
But here‘s the problem!
While you are surfing through the internet, you may come across hundreds of money transfer platforms.
To ensure that it is a reliable platform, you must clarify the total transaction cost in advance. There are some platforms who do not include the currency exchange rates in their overall calculation. Such hidden fees could spoil your experience completely. So, beware!
However, FAZRemit ensures that for every money transfer to Nigeria from USA, the customer pays the lowest fee. Before making any transaction, you see the exact cost you want to pay, how much would your beneficiary get, and what would be your total cost.
If you are taking a regulated course for an international transaction to Nigerian from USA, that you always must, you will be required to submit your KYC documents. Physical presence within the working hours and waiting in line will also compromise your convenience. Why would you want to do it to yourself when you can do it at your own convenience?
Along with convenient and instant wire transfers, the price is also very important. All of them have their own significance. FAZRemit, therefore, facilitates the fastest money transfer services from the United States to Nigeria, Ghana and Kenya to ensure that you get the best experience within the affordable range that you seek!
3. Actively Participate in the Country’s Economic Development
You must always make money transfer through a licensed and regulated channel. This ensures the security of your funds. In a case, because of any reason, your funds do not reach to the beneficiary, you can have your money back. If not regulated, there is a possibility that you may not be able to get your hard-earned money back! Well, that’s a bummer!
There are many benefits to choose a registered platform. On a personal level, you can get the best and competitive services.
On the broader side, once you choose a formal channel of financial transaction, you become a part of the national economy. This helps the government to create more accurate statistics of money-flow.
The Federal Government of Nigeria, then, can use these statistics to develop better policies. This could benefit not just you, your family, your community, but the entire nation.
Although there are economic problems and challenges that the Nigerian government needs to solve. But, if you, the citizen, do not comply with the basic requirements of the government, the vicious cycle of blaming one another could continue endlessly!
4. Always Get the Best Because You Deserve it!
There is a neck-to-neck competition in the market. In the digital era, you, as a customer, are the most valuable asset that any service provider cherishes. While competing for the throne of service providers facilitating the most affordable money transfer to Nigeria, you can easily get the best in the market. All you need to do is – Explore!
Central Bank of Nigeria (CBN) is targeted to drop down the unbanked population from 37% to 20%. The remittance trend is shifting drastically. In the age of millennials, the world is moving towards a more accessible and better choice every single day. And, the government will play a decisive role if they want to promote this trend and prosper or slow their pace and fall behind the race in which they have already taken a good lead. With a decisive victory in Nigerian elections 2019, Mr. Buhari has undertaken this humongous responsibility and the entire world is watching.
Billions are pouring in the Nigerian remittance market every single day. Everyone wants ‘More’. So, why not take the full benefit of it and choose the service that provides the most affordable money transfer to Nigeria?
Know your Customer, a.k.a KYC, documents demanded by FAZRemit includes two types of documents: 1. Customer Identification Document: a. Driving Licence, b. Passport, and c. State-issued identity card. 2. Document…
Know your Customer, a.k.a KYC, documents demanded by FAZRemit includes two types of documents:
1. Customer Identification Document:
a. Driving Licence,
b. Passport, and
c. State-issued identity card.
2. Document for Address Proof:
a. Gas bill,
b. Credit card statement,
c. Bank statement,
d. Electricity bill, and
e. Water bill.
As soon as a user uploads these KYC documents on his or her dashboard, our document verification process initiates. We strongly recommend that:
1. The scanned or downloaded documents must have clearly visible Name, Address, and Date of issue. When it comes to utility bills, one must provide the latest documents, preferably a recent proof less than 90 days.
2. The document should be clear and whole, i.e. it must not have any cut or hidden or blurred information therein.
3. Online banking documents and bills must be downloaded or scanned and then sent to FAZRemit as a file attachment. Screenshots are not accepted.
Importance of KYC Documents?
While providing financial services, it is the responsibility of the organization to maintain a legitimate environment.
In the financial community, during the initial stages, non-bank organizations didn’t care about the details of the customers. It was his or her responsibility to fill the correct information. There were multiple drawbacks of this system:
1. Incorrect details sometimes lead to funds getting transferred to wrong destinations.
2. Money launderers could send and receive money from multiple accounts.
There was no regulation that could keep a check on such transactions. Moreover, non-bank financial institutions could do as they please. However, with AML/CFT laws and mandatory KYC documents’ submission, the situation has changed drastically. There has been a significant difference in the number of illegitimate transactions globally.
So, How Does KYC Document Verification Works?
For instance, there is a customer who wants to send money from USA to Nigeria, Ghana or Kenya. After completing the registration, he or she would be redirected to a personal dashboard. Once all the documents are submitted as mentioned, they undergo verification.
During document verification, we ensure that:
1. The person sending the documents is exactly who he or she is claiming to be.
2. There are no previous records or allegations on the concerned individual regarding money laundering. We ensure that the person does not fall in the PEPs (Politically Exposed Persons) category.
3. When it comes to organizations, FAZRemit runs a thorough check on the concerned company. All the beneficiaries are thoroughly scrutinized.
Once the evaluation is complete, and only if all the details are acceptable, then our Money Laundering Reporting Officer (MLRO) can permit the person to make any transactions.
We keep the record of every single transaction.
To ensure that the funds reach to the right person, the beneficiary is also verified. Once the corridor is verified, customers can make unlimited transactions using FAZRemit.
Taking our legal obligations extremely seriously and without compromising with the civic morality, FAZRemit assures every customer that every single transaction on the platform is 100% safe. Every member of the FAZRemit community is a verified customer because we actually ‘know our customers’.
We completely understand that submitting KYC documents and waiting for its verification could seem like a long time. However, if the documents are clear and fulfill all the criteria as mentioned at the beginning of this blog, our automated software analyzes and concludes the verification process within a few minutes.
Regulated as Money Transmitter by the New York State Department of Financial Services, FAZRemit strives to provide its customer the safest, most convenient, and affordable money transfer services.
So, to experience an unparalleled online platform to send money to Nigeria, Ghana or Kenya from USA, register on FAZRemit today. In case you have any query, you can always write to us at firstname.lastname@example.org.
Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which…
Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which is the largest in the number.
Non-recipients of remittances have shown a negligible change from the state of poverty as compared to the families receiving remittances. Further, the recipients use this money to spend on basic household expenses.
Remittances uplift the overall standard of life. In that line, the recipients spend the financial aid on crucial social amenities including education, health, and better housing. Remittances allow Nigerian families to improve their creditworthiness and strengthen them to take part in the formal economy. Collectively, the overall nation benefits from this increased contribution.
So, what should be done?
The Nigerian government is yet to lay down specific policies to constructively use the revenue generated through remittance inflow. World Bank has also recommended the Nigerian government to strengthen its remittance policies by lowering the transaction costs. In the meantime, it is important to understand that things are not as simple as they sound. There are after-effects of every single decision. In the case of developing nations, they have to overcome the problem of brain-drain.
Even renowned global financial institutions have pointed out that the overall remittance trend is causing money-drain.
Educated Nigerian youth that returns to his or her own country, generally, prefers imported goods instead of local products and services. At the same time, one can argue that remittances help limited Nigerian families. But those who become successful, start getting attracted towards western culture. Consequently, their preferences and spending structure changes. And, a major part of the money starts flowing towards foreign investors instead of the national economy.
This is a concerning issue. However, in the short-term, especially in the current scenario, this influx could significantly help poor and struggling Nigerian families earn a piece of bread. To conclude that remittance alone can change the course of the downtrodden Nigerian economy would not be right. But in the end, it’s the Nigerian government that needs to take notable initiatives to strike a balance between the pros and cons of foreign aid, investment, and remittance.
It would be best for the Nigerian government to best let the remittance trend benefit its backward communities which are struggling the most. Lack of education is leading to unemployed people joining the rebels, especially in Southern Nigeria.
Coping up with insurgents would require more federal reserves to be allocated for security. The same security budget that exceeded $1.7 billion in 2017. If the same trend continues, it would continue to take its toll on the economy. Moreover, the Nigerian families that could be assisted sooner will keep suffering for a longer time. This would further stimulate more anger, distrust and feeling of rebellion among the common people. Hence, it is a vicious cycle that needs to be stopped as soon as possible.
Although this is just one of the many reasons, it is crucial for the government to control the situation now. To achieve that, the Government of Nigeria (GON) must check the fluctuation in social spending (budgets for education and health of Nigerian families).
Lastly, A Note for the Nigerian Families
At the same time, Nigerians need to actively participate in the Nigerian economy by limiting the use of cash. To understand the extent to which this can help on a global level:
Digital and cashless services, if accepted worldwide, can save enough revenue for 30 million books for schools and 20 million school uniforms in low-income nations. This can be a boon for at least 200,000 out of 12 million (highest in the world) out-of-school Nigerian children.
Although the government has a major role in uplifting the economy of the country, Nigerian migrants can also play their role by opting for the best money transfer services as the banks are unable to provide them with the same. To achieve this, FAZRemit provides the cheapest money transfer services to Nigeria from the USA. Because of the fastest transaction speed, FAZRemit ensures that every beneficiary receives the money at the right time. This could be just the first step towards revolutionizing the way migrants send money to Nigeria but it is undoubtedly the need of the hour.
Nigerian General Elections 2019 Results were announced by the Election commission of Nigeria on Wednesday, February 27, 2019, stating All Progressives Congress (APC) candidate – Muhammadu Buhari – has been…
Nigerian General Elections 2019 Results were announced by the Election commission of Nigeria on Wednesday, February 27, 2019, stating All Progressives Congress (APC) candidate – Muhammadu Buhari – has been reelected as the president of Republic of Nigeria. Defeating Atiku Abubakar of People’s Democratic Party (PDP), Buhari took the crown in 19 states out of 37 with a vote difference of 3,928,869 votes. Other smaller parties like Africa Action Congress (AAC) put up a good fight in selected regions like Lagos where it secured 8,910 votes. Meanwhile, the Young Progressive Party (YPP) and Alliance for New Nigeria (ANN) collectively gathered 38,665 votes.
Nigerian citizens count on Buhari for taking strict actions against corruption as well before the election campaigning, he has been portraying himself as an anti-corruption crusader. However, the opposition had several questions for him. The presidential tenure that follows would be more challenging as many of Buhari’s own cabinet ministers and high-level officials have been charged for the same. At the same time, the public has been viewing these convictions as a positive sign of war against corruption.
Nigerian economy was negatively impacted in 2016 and since then, there has been a nominal growth in the overall economy. Meanwhile, the World Bank Organization is estimating GDP growth of merely 2.2% in the year 2019. At this rate, it would be extremely challenging for the Nigerian economy to roll repeat 2014 when it had crossed $550 billion.
According to Statista report, Nigeria will not be able to achieve that feat before 2021 but if things go as expected, before the next general elections in 2023, the biggest African economy – Nigeria – would cross the $650 billion mark.
Although GDP consists of multiple parameters, an immediate action strategy is expected, moreover, mandatory for the elected government in the following sectors.
Poverty and Illiteracy
The huge divide between urban and countryside Nigeria, when it comes to electricity and power, is enormous. National Bureau of Statistics (NBS) report states that even though 4 out of every 5 homes in cities and urban areas have electricity but out of the total rural families (which constitutes 64% of the total population of Nigeria), 2 out of every 3 do not.
Overtaking India, Nigeria has become the country with the largest population living under extreme poverty. According to a report in July 2018 by the World Poverty Clock, 86.9 million people have been affected by the curse of poverty and some major reasons include corruption and overpopulation in the country. It can hereby be concluded that the first Sustainable Development Goal (SDG) prepared by the United Nations, aiming to end poverty by 2030 seems too far-fetched, especially for African Nations including Nigeria and the Democratic Republic of Congo which is expected to be the next to follow the suite and replace India to take 2nd position in the ranking.
More than 70 million Nigerian citizens including 11 million out-of-school children, and 60 million youth and adults, are illiterate. Furthermore, orthodox systems and communal obligations apart from lack of government’s ability to implement the policies, is simply worsening the problem even further.
For a booming Nigerian population (increasing at 2.6% annual rate), fulfillment of fundamental requirements including food, shelter, and education is imperative. However, the worsening numbers is an indication for the upcoming Buhari’s governance to pay special heed.
Oil, Agriculture, and Remittances
The largest oil-producing country in Africa and the 6th largest oil producer in the world, the oil-driven economy of Nigeria needs to diversify.
Agriculture-sector needs special attention because the fertile land of Nigeria and the agriculture produce, due to lack of Agro-technology, are not able to feed the mouths. Once a leading food exporter, Nigeria today imports food from other countries. This points towards the negligence of duty by the Nigerian officials and policymakers who instead of extensively investing in oil should have been improving the agriculture sector as well.
At the same time, remittance inflow is playing a decisive role in keeping the economy afloat which is why it becomes essential for the Buhari government to promote international transactions and mobile payments. Those who want to send money to Nigeria online need easier and economically feasible platforms and the government must take encouraging steps for the money transfer services, businesses and investors to develop these services. Needless to say, there are plenty of other sectors that need more importance but ignoring the remittance industry would be a huge blunder for Muhammadu Buhari’s government.
Tensions and Violence
Nigerian general elections 2019 results came along with the announcement of the winner but there were more than 39 casualties and hundreds of arrests which is although less than the 2015 general elections (when almost 60 people died in 61 reported election-related violence), the country has a long way to go before conducting, what in a democratic nation is termed as, fair and safe elections. It would be expected from Buhari to keep aside the results, as he portrays himself as a law-abiding and honest person, and ensure that the hard-earned democracy is kept alive and prosperous.
As promised, Buhari has had a huge impact on the Islamic extremists, Boko Haram, in the North which is one of the biggest reasons for Nigerian voters vouching for him and giving an overwhelming mandate to APC in the 2019 general election.
However, the problem of southern insurgency still remains. This makes Nigerian economic diversification even more important as the insurgents since the 1990s simply do not want to be exploited. Buhari has promised to resolve the Niger Delta conflict soon, however, there is no definite timeframe decided. The unrest among minority ethnic groups led to a significant vote-share shift towards PDP in the recent elections. After the elections, we will keep an eye on how Buhari balances the oil crisis and the southern conflict.
While taking strict action to curb insurgency and corruption, Buhari may be continuously alleged for usurping both judicial and legislative power. His past record of using military rather than diplomatic or democratic steps have been put under question but also suppressed by power. This is not a very good sign for the future of the Republic of Nigeria, however, with the entire world tending to shift towards a more strong and decisive right-aligned governments, Buhari seems to be the best choice available and his steps in the next 4 years will decide what will be seen and experienced by the Nigerian generations that follow.
At FAZRemit, we hope that “Unity and Faith, Peace and Progress” prosper in the Giant of Africa.
Check out the cheapest rate list for users to Send money to Nigeria, Kenya and Ghana from USA.
While there are multiple IMTOs claiming to provide the most affordable way to send money from US to Nigeria, Ghana or Kenya, FAZRemit makes sure that you apply for the best.
As soon as you register on FAZRemit, you are enrolling yourself with the most transparent, secure and convenient online money transfer platform to wire money to Nigeria, Ghana or Kenya at guaranteed cheapest rates. Apart from being a platform that is an amalgamation of the best ideas hand-picked from all the leading IMTOs, we ensure that whatever application you send your remittances for, you and your added beneficiary can take the full benefit of it in the least amount of waiting time.
Apart from knowing the banks that we support in Nigeria, Ghana, and Kenya, it is crucial for a user to know the exact rates at which his or her money will be wired to the aforementioned countries. Addressing that problem, the following are the nation-specific money transfer rates provided by FAZRemit.
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!
Nigerian diaspora is the most successful ethnic community in the United States of America.
The Nigerian government needs to make policies that encourage formal remittance services that wire money to Nigeria.
The educated young Nigerian immigrants have the responsibility and show a promising ability to drive the wheel of global socio-economic welfare.
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.
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.
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.
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,
Money transfer to Nigeria
Wire money Nigeria
Send money to Nigeria online
How to send money to Nigeria
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.
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.
List of all the banks where the registered FAZRemit users can avail the benefits of wire transfer and send money from US to Nigeria.
US citizens can instantly send money to Nigeria bank account in USD. Guaranteeing the best exchange rate and fastest money transfer, registered users can send remittances to the following banks in Nigeria:
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.
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.
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:
Buy international property
Support their family members by:
Paying for their children’s or even grandchildren’s education
Compensate for the daily expenses of their family
Invest in an international venture
Pay off the debts of their close ones
Submit the insurance installments
Help international population in need of help because of:
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)
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 theWorld 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.
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:
IMTOs are used by some individuals for a limited number of transactions which could be very challenging.
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.
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.
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.
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.