London and Kampala: New research from WorldRemit reveals that the Ugandan diaspora in over 50 countries could be losing $12 on average every time they send money home this festive season due to the high cost of international money transfers through traditional channels.
Last year, Ugandans living abroad sent home $1.4 billion and the run up to Christmas is always one of the busiest times to send money. New data from WorldRemit reveals that, by switching from traditional offline money transfer services to lower cost digital channels, thousands of Ugandans could receive an extra Christmas present this year.
The savings were highest when sending from the United Kingdom to Uganda, with an average saving of nearly $18* - enough to buy a bottle of wine or a new suit.
Transaction costs are only part of the story and a significant challenge at this time of year is travelling to an agent during opening hours. With a significant proportion of the Ugandan diaspora living in countries in cold climates including the United Kingdom, United States and Canada, tens of thousands of Ugandans could be facing near freezing temperatures unnecessarily to travel to an agent to pay in money.
Back home, their family and friends would also incur unnecessary costs and inconvenience to collect money sent through traditional channels.
“Most Ugandans in the diaspora send money several times a month. When it costs around $15 for a return trip from Mbarara to Kampala, the costs of collecting money sent through traditional channels quickly add up,” notes Ivan Kanyali, Country Manager for Uganda at WorldRemit.
Those using digital services to send money home are helping to eliminate such inconvenience and cost for their loved ones ensuring a greater share of the money can actually be used - rather than lost in transit. Nearly 80% of those sending to Uganda via WorldRemit’s digital money transfer service are now opting to send money directly to a mobile money account, removing the travel costs for both the sender and the recipient.
Savings on travel alone during the festive season could be put towards buying school books for the beginning of term in February 2019.
A recent poll by WorldRemit revealed that 8 out of 10 people found that switching to digital channels has made money transfer simpler not just for senders, but also for their recipients. However, the majority of global remittance flows are still going through informal channels.
Companies like WorldRemit are working hard to help more people to move to more cost-effective and convenient money transfer methods. The incentives on offer for existing customers who refer a friend to WorldRemit could be enough to buy a basic smartphone in Uganda.
Ivan Kanyali said: “Sending money is an important way for many people spending Christmas away from home to connect with their loved ones and play a part in the festivities back home even when they can’t be there in person. Yet, taking time out of work to travel to agents to send and receive money, can make Christmas a time of stress rather than joy.”
By enabling our customers to send money abroad in a few taps from their phones, we can ensure that more of their hard-earned cash goes straight into the hands of friends and family this Christmas, freeing up time for both senders and recipients to relax and enjoy the festive period.”