168
Remittance Markets in Africa
provide only domestic remittance transfer services. Only banks, Posta, and Postbank operate in more than 10 remittance corridors. However, some banks operate in fewer than five remittance corridors. The MTOs that have direct contractual obligations with financial and nonbank financial institutions benefit in several ways, as figure 6.1 indicates, including marketing and advertising, access to payment systems, and access to relevant financial information. However, it is important to note that the remittance transfer process usually involves several levels of institutions or persons, including a financial institution, nonbank financial institution, or currency exchange that acts as an agent of the MTOs. This therefore suggests that there are some interrelationships between the formal and informal channels in the provision of remittance services.
Remittance Products Several remittance products are offered in Kenya, including electronic funds transfers, prepaid cards for use at selected retailers, bank drafts, checks or demand drafts, and money orders. Other remittance instruments include account-to-account transfers, money transfers through mobile phones, and prepaid debit cards. Figure 6.2 summarizes the instruments that the surveyed RSPs use. Electronic Funds Transfer. Electronic funds transfer (EFT) is the most widely used remittance product, offered by more than 54 percent of the Figure 6.1
RSP Partnership Benefits
commission on remittances
38%
access to distribution network
27%
access to payments infrastructure
27%
access to foreign exchange
share of profits
19%
14%
Source: RSP Survey data. Note: Percentages indicate all surveyed RSPs that said each listed benefit was one they enjoyed because of partnerships with other RSPs.