Flutterwave, a leading African fintech company, has announced that it has obtained payment licenses for 13 states in the US, as part of its strategy to dominate the remittance market in Africa. The company, which is valued at over $3 billion, aims to leverage its extensive infrastructure across 34 African countries and its partnership with a licensed financial institution in the US to facilitate money transfers between the two regions.
Remittances from Africans living in the diaspora, especially in the US, have grown significantly in recent years, despite the impact of the global pandemic. According to data from FXC Intelligence, the value of remittances to Africa increased from $31 billion in 2010 to $43.8 billion by 2022. Nigeria, Egypt, and Morocco are among the top remittance recipients globally, with Nigeria alone receiving $19.3 billion in 2022.
The growth of the remittance market has attracted the attention of various players, including banks, mobile money operators, and digital platforms, who are competing to offer fast, convenient, and affordable services to customers. However, Flutterwave believes that it has an edge over its rivals, thanks to its international payment processing capabilities in 150 currencies, its support for various payment modes such as local and international cards, mobile wallets, and bank transfers, and its compliance with the regulatory requirements of different markets.
Stephen Cheng, executive vice president of global expansion and partnerships at Flutterwave, said in a statement that the licenses enable the company’s solutions like Send App, which allows money transfer between the US and Africa, and enterprises that use Flutterwave for last-mile payout globally. He added that the licenses demonstrate the company’s ability to deliver services with safety and soundness and foster the trust of regulators, partners, and customers.
The licenses also bring the company closer to its ambition of becoming a publicly listed company on the New York Stock Exchange (NYSE), as reported by BusinessDay in August. Olugbenga Agboola, CEO and co-founder of Flutterwave said in an interview with Bloomberg that going public is important for the company to attract large global clients who need the same level of compliance and global view that they have.
Flutterwave, which was founded in 2016 by Agboola and Iyinoluwa Aboyeji, has processed over 550 million transactions totaling more than $32 billion and served over two million businesses. The company has raised $225 million in funding from investors such as Tiger Global, Y Combinator, Greycroft, and Visa. The company has also expanded its remittance solution to Canada and the UK, allowing people in those countries to send money to Africa easily.
Flutterwave’s expansion in the US and other markets is expected to boost the remittance flows to Africa and support the economic development of the continent. Remittances are a vital source of income for many households and businesses in Africa and also contribute to the foreign exchange reserves and balance of payments of the countries. According to the World Bank, remittances can also help reduce poverty, improve health and education outcomes, and foster financial inclusion and entrepreneurship in Africa.
Source: BusinessDay NG
