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Smartel Money Ltd is company that is rooted in the Kingdom of Lesotho. The aim and focus of Smartel money is to provide mobile payment services, savings & credit and monetary transfers and serve thus as an alternative to traditional banking systems. We aim to provide to individuals, institutions, organizations, multi-industry sectors and governments with the cutting edge, fresh and innovative financial management system in this ever changing world. We also aim to improve the quality of cloud computing (payment as a service) and interaction between computers and people to achieve their payment processes. Smartel Money customer base comprises banked and unbanked people and societies, insurance, retail grocery, retail clothing, retail cell phone services, utility services etc.

SMARTEL Money, a local mobile money service provider says the market must embrace cashless transactions to limit the spread of Covid-19 through handling cash. The company’s My Wallet mobile money platform was introduced to the market in May 2019 following the licensing of the company as mobile money issuer by the Central Bank of Lesotho.

Yet the pandemic and increasing competition have presented an opportunity for newer, nimble firms such as WorldRemit and Mukuru, who use disruptive online technology through smartphones, and often undercut the prices traditional remittance firms charge customers to send money to the continent. 

WorldRemit also partnered with OPay, a Nigerian financial services technology company, and Mukuru, an Africa-based remittances fintech business operating in over 20 African markets. The deal now means there will be no charges for Mukuru customers on cash collections for transactions with WorldRemit.  

For Mukuru, the weakening of the informal trade has meant growth has accelerated since April, says CEO Andy Jury, although the long-term impact of Covid-19 on labour migration is unknown. 

So how does Mama Money offer their service at 5% whereas Mukuru, arguably the most popular service over the South Africa-Zimbabwe corridor, charges double this? From our experience of testing these two services, we noted a few key differences in how they operate which is likely to drive the cost differential between the two services. These differences include: · Mama Money maintain low overhead costs. Mama Money operate a single branch in Cape Town whereas Mukuru operate at least seven of their own branches nationally and they also operate through the Inter Africa branch network · Mama Money offer limited support beyond registration. In comparison, Mukuru operate a large 24 hour call centre and live chat function that supports and facilitates transfers. These support functions are no doubt very expensive to operate · Mama Money have a single partner organisation in Zimbabwe. Mama Money only have a single partner in Zimbabwe, CABS bank, whereas Mukuru have partnerships with a number of banks, retailers and mobile wallets. That said, if Mama Money’s Facebook comments are anything to go by, they may be adding more partner organisations in Zimbabwe, so this factor may soon be invalidated So while Mama Money’s competitors charge considerably higher fees, in the case of Mukuru, these higher fees are associated with some value-added benefits for the customer, for instance 24hr support on transactions for the sender and, for the recipient, a choice in how to receive the money.

The pandemic gave remittance companies an advantage over their main competition in Africa: the sprawling informal networks of traders, bus drivers and travellers used by many migrants to send money home.“We’ve seen an influx of new customers, and we see them mainly coming to us from the informal market,” said Andy Jury, chief executive of Mukuru, the company Takawira now uses.Jury and other industry executives say that shift is likely to last as digital remittance services are typically cheaper, faster and safer than informal networks, which are difficult for governments to regulate.Mukuru, which focuses mainly on African remittances and allows customers to send both cash and groceries, has seen a roughly 75% acceleration in growth compared to last year.