Pipit Global, a cash payments platform, has extended its partnership agreement with Cellulant, a fintech company, to now include eighteen countries in Sub-Saharan Africa. The partnership will see the companies providing both B2B and B2C payments services to existing and emergent financial institutions, eCommerce merchants, billers and billing platforms, mobile money providers, digital financial service providers, and their customers.
According to figures from the World Bank, remittances to markets in Sub-Saharan Africa have bounced back to near pre-pandemic levels with a year-on-year increase of 6.2%. This is despite the ongoing COVID-19 pandemic. These figures demonstrate the importance of diaspora remittances to sub-Saharan African countries, which currently exceed Foreign Direct Investment and portfolio flows.
However, the cost of remittances into Africa and intra-African remittances remains a challenge, a burden on senders and receivers, and a barrier to development. Pipit Global and Cellulant’s partnership will see the development of for-purpose remittances. Rather than the traditional model of peer-to-peer cash remittances, migrants will be able to make bill payments and e-commerce transactions directly to suppliers.
This model ensures that bills are paid, and removes the potential for leakage, where remitted money may not be used for its intended purpose. It also reduces the receiver risk associated with cash collection. And, in line with the goal to reduce remittance costs, the direct-to-biller model applies fees significantly lower than traditional remittance prices resulting in meaningful savings for remittance senders and receivers.
Commenting on the partnership, Pipit Global CEO Ollie Walsh said, “Pipit Global was founded on the basis of promoting collaboration in the world of payments. Making cash a core element of the digital economy, whilst maintaining that cash economy and giving the ability to transition between the two, gives real parity and freedom, and ultimately creates the social impact that drives global development and equality.
On his part, David Waithaka, Cellulant’s Chief Business Officer for Enterprise said, “At Cellulant, we see digital payments as a significant opportunity to create transformational change for businesses, households and economies at large. International and intraregional remittances are an engine for growth for many economies in Africa providing resilience to financial shocks and improving livelihoods. Enabling lower rates and powering for-purpose remittances for us is about the direct impact on people’s lives.” he added