Sigue, a US money-transfer company strong in Latin America, is buying the money-transfer business of Coinstar for $41.5m. Coinstar’s network allows users to transfer cash to 23,000 points worldwide – and Sigue’s CEO, Guillermo de la Viña, says the acquisition will make his company “one of the largest global money transfer companies with pay out locations in over 130 countries.”
More deals may follow this year. Unistream, a Russian money transfer company with 30 per cent market share in former Soviet countries, is looking towards the Gulf, the second-largest source of private financial transfers after the US. Reuters recently reported that Western Union and MoneyGram were looking at ways to expand into Asia.
The moves testify to remittances’ resilience. Flows to developing countries shrunk in 2009, down 6 per cent to $307bn, as immigrants in the US and elsewhere lost jobs (particularly in construction) and, in many cases, returned home. However, a new World Bank report forecasts that remittances will rise by over 6 per cent in 2010 and over 7 per cent in 2011.
All that is well and good, but how long is it going to take for someone to figure out how to include everyday Africans in the global, ‘borderless’ world of finance? I am thinking of payment services, not remittances services. In the past one month, three friends who are based in Nigeria have asked me whether I can help them open a Paypal account. Some people they are doing some work for agree to pay only through Paypal. They refuse to use Western Union because, well, they don’t trust the Nigerian end of the service.
Don’t tell me that nobody thinks that there might be some money to be made in Africa from that. Or that they are too scared of bad, fraudulent Nigerians to try and introduce such services there. We all know that no matter how sophisticated and bad you think Nigerian fraudsters are, the ones in developed countries are much worse. If those services can be made to work securedly in developed countries, there is no reason they shouldn’t be able to get them to work in African countries.
Or am I missing something?