Remittances to Africa are poised for transformation by shifting from cash transfers to direct payments to service providers. This system change can unlock greater efficiency, security, and economic impact for millions of African recipients and their communities.
Ronald's Medical Emergency
Take Ronald a hardworking engineer in the UK. He's been sending money home to his mother for nearly 5 years and he's been frustrated by the high cost of fees, anything between 8 and 15%. When his mother was hospitalized he need to send through some emergency fees to pay for admissions and other medication. The only problem was that his mother normally sent his little brother to collect the money. The issue was that his little brother would always skim off some money for beers. This time that couldn't happen he needed a way to ensure the money got to the doctor and the hospital.
Traditional remittance models rely heavily on sending money as cash or bank deposits to recipients, who then spend it on essential services such as utilities, school fees, healthcare, and groceries. While this flow has supported households for decades, it has several limitations including high transaction fees, risks of theft, and delays in funds reaching those who need them most. Furthermore, recipients often face the challenge of converting cash into services, which can involve inefficiencies and lost opportunities.
Ronald was in a conundrum until he came across Bhadhara. What he discovered is that he no longer had to worry about the misappropriation of funds. All he had to do was select a hospital and doctor and send through a payment directly whilst notifying the doctor and his mother. What started as a stressful medical emergency was mitigated by a transparent and affordable transfer system.
A modernized system that sends remittance funds directly to the service provider—whether it’s a utility company, a school, a healthcare facility, or a merchant—can radically improve the experience and outcomes of remittances by addressing these issues:
Increased Security and Trust
Direct payments eliminate the need for intermediaries once the funds leave the sender, reducing the risk of theft or fraud. Recipients do not have to carry or store large amounts of cash, which can be vulnerable especially in less secure environments. This builds more trust in the remittance system.
Lower Transaction Costs
By circumventing multiple cash handovers and manual exchanges, direct payments can dramatically lower fees passed on to senders and recipients. This means more of the money actually arrives at its intended destination, increasing the value for families relying on these funds. Ronald's mother not only got treatment but here were not shortages, friction or family tension save for his little brother Tafadzwa not getting to take some money for a beer.
Faster, More Reliable Payments
Direct transfers to providers can be processed instantly over digital networks, allowing timely payments for utilities, tuition, or health services. This reduces disruptions caused by delayed or partial payments, which often impact families’ quality of life.
Economic and Developmental Impact
Direct remittances to providers stimulate local businesses and service sectors directly, fostering economic growth and job creation. This model also improves transparency and accountability since payments are tracked officially, encouraging better service delivery.
Empowerment Through Choice and Digital Tools
When integrated with digital wallets and mobile apps, such systems can allow recipients to manage where and how funds are spent, view balances, and receive receipts. This empowers users with greater financial control and inclusion.
Real-World Implementation Considerations
For direct payment systems to succeed, several factors must be addressed:
- Partnerships with trusted service providers across sectors
- Regulatory frameworks supporting digital payments and data privacy
- Mobile and internet infrastructure expansion in rural areas
- User education on digital payment platforms and literacy
- Innovative implementation of emerging technologies like blockchain and AI.
Conclusion
Bhadhara is re-imagining remittances as direct payments to service providers unlocking vast improvements in security, cost-efficiency, speed, and impact for Africa’s billions in yearly inflows. Our system offers a pathway to financial inclusion and economic empowerment that traditional cash transfers struggle to provide. With continued innovation, collaboration, and investment, this transformation can help maximize the power of remittances as a driver of development and prosperity across the continent