An African fintech start-up called Chipper Cash has extended its peer-to-peer instant money service platform to South Africa.
Besides being disposed to the usage of the remittance service, the services enable buying, selling, and transfer of cryptocurrencies like bitcoin, ethereum, and the USDC stablecoin of any of the South African users.
According to a report quoting the start-up’s VP for partnerships and strategies in Africa, Pardon Mujakachi, Chipper Cash has made a raid into South Africa because it believes the country “is ripe for disruption and innovation in the financial services market.”
The report also quotes the VP, disclosing that duration takes “three days for a person in the U.S. to send money to South Africa” while contrastingly, it takes up to 48 hours to move funds from one bank to another.
Mujakachi asserted that it is such incapability that often pushes users to informal channels. The figures of the approximated number of users, forced to use such informal channels were also shared by the VP. He said:
People end up using informal channels to send money. If you look at the outbound remittances from South Africa, 68% is going through informal channels. Even with the domestic remittances, a sizeable amount goes through the informal channel.
According to the Chipper Cash VP, he states that such domestic remittances will make the fintech firm’s starting point in South Africa. Notwithstanding only validated users will be permitted to utilize this app.
Just like other fintech start-ups before Chipper Cash, the attempt to demand a substantial chunk of the cross-border remittance market share from developed money transfer organizations (MTO) is observable.
By rendering lower transactional costs, a potential chance of Chipper Cash eating into existing MTOs’ market share. However, fingers remain crossed to see if this mobile app will win over South Africa’s other financially excluded groups.
This is so because, apart from impairing the needed verification documents, some in these financially excluded groups have limited access to devices necessary for using the mobile app.
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