By THE INDEPENDENT UG
Kampala, Uganda | THE INDEPENDENT | A new collaboration between Diamond Trust Bank and TerraPay, a payment services company, has the potential to reduce the cost of sending money to Uganda by more than half.
Currently, the average cost of international money transfers stands at 6.2%, with the expense to Uganda reaching 7.3%, excluding transfers from Tanzania, which elevates the cost to 11%, as reported by the Global Forum on Remittances, Investments, and Development.
The United Nations, under the Sustainable Development Goals, and the G20 group of countries have established a goal to bring down these costs to 3% or less by 2030.
The agreement between Dutch-based TerraPay and DTB is poised to significantly narrow the financial inclusion gap by streamlining the processes of money transfer, savings, and credit accessibility for individuals.
According to Samuel Muyingo, TerraPay Country Manager for East and Southern Africa, this partnership enables money sent from anywhere in the world to be deposited directly into the recipient’s DTB bank account almost instantly. He emphasizes that with TerraPay, money can be sent to Uganda from at least 210 countries, with transactions completed in just a minute, making it convenient for those in the diaspora to send money back home.
Regarding costs, Muyingo states that their fees are fixed, at not more than $1.8 per transaction, irrespective of the value. This is notably lower than the targeted UN average of 3% per transaction.
This initiative is expected to particularly benefit customers residing in Qatar, Canada, Europe, Kenya, Germany, the United Arab Emirates, the United Kingdom, and the United States, offering them the capability to execute real-time money transfers to recipients in Uganda.
Varghese Thambi, DTB Uganda Managing Director, notes that this collaboration adds to their existing partnerships with four money transfer firms, providing the additional advantage of low cost and swift transaction completion.
Thambi highlights that many Ugandans find fast transfer services too expensive, and this partnership addresses that concern, allowing recipients to access funds from any DTB branches and bank agents.
This strategic partnership is anticipated to fuel the growth of digital transactions within Uganda, a market projected to surge to a staggering $1.3 billion by 2027.
Thambi expresses confidence that this collaboration will be successful and will promote financial inclusion in the region by simplifying global money movement for both individuals and businesses, making it easier to connect with loved ones and empower global commerce, according to Willie Kanyeki, TerraPay’s Vice President for East and Southern Africa.
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