Digital transfer payments, including overseas remittances will play an increasingly crucial role in the post-pandemic financial landscape as the role of cash begins to dwindle, and there is the need for improved regulation to curb illicit flows, Gbenga Okejimi, Country Manager, Nigeria and Ghana at WorldRemit, has said.
“People have begun to embrace the use of digital technology which has encouraged the financial inclusion drive of the government. It is still too early to say that cash has fizzled out, however, the popularity of digital technology is set to increase long after the pandemic,” he told the B&FT in an exclusive interview.
The World Bank, in its Migration and Development Brief published in October projected that global remittances will fall by as much as 14 percent in 2021, compared to the pre COVID-19 levels in 2019.
This, it noted, will translate into remittance flows to low and middle-income countries (LMICs) falling by 7 percent, to US$508 billion in 2020, from a record high of US$548 billion in 2019, followed by a further decline of 7.5 percent to US$470 billion in 2021. More specifically, the brief suggests that Sub-Saharan Africa will see a 9 percent and a 6 percent drop in remittances in 2020 and 2021 respectively.
Despite this, Mr. Okejimi has expressed optimism about the future of remittances particularly off the back of increased use of digital transfer platforms hinting that the dip in overseas remittances is a short-term phenomenon, one which he expects to change in light of the positive news coming in with regards to curbing the disease and will mirror the country’s FDI inflow, which has defied sharp drop predictions.
Additionally, he suggested that an often overlooked element in the discussion surrounding remittances is that which occurs within individual countries and this will continue to rise as consumers favor the safety and convenience of digital payments over cash.
Proactive regulation curbs fraud
The increasing use of digital platforms, if well regulated, he implied, could serve to address concerns about fraud and illicit flows of money.
He explained the lengths to which WorldRemit goes to curb incidents of fraud and illicit flows, saying, “we have invested significantly in technology and continue to do so. We have a robust regulatory compliance team with the necessary tools to monitor transactions and prevent consumer fraud. We regularly inform our customers of the dangers of e-fraud and have platforms with the highest security standards to ensure that your money is protected and arrives safely.”
Mr. Okejimi stated that an increasing use of digital payment platforms hinges on a multi-stakeholder drive to improve infrastructure, particularly access to and the cost of internet data as well as the necessary regulatory framework to ensure that Ghana adheres to the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) dictates.
He expressed the readiness of his outfit to take advantage of the growing trend to drive financial inclusion country-wide.
“With the growth in mobile money services, we have formed partnerships with the major telcos in Ghana. We have also partnered with some banks and are looking to expand our network in Ghana. There is an increase in bank accounts, so we expect an uptick in that area too. We will also explore opportunities with Ghanaians in the diaspora and hope more economies will reopen for business in the near future,” he added.