Kenyans in the US stand to gain from a new banking product that allows users to earn interest and pay reduced fees on international remittances, in what could boost inflows into the country.
Sendwave Pay by remittance company-Sendwave is a banking product that also allows reimbursement of international transaction fees, when using the card outside the US.
Sendwave Pay provides existing Sendwave users access to a FDIC-insured bank account with an accompanying debit card. This makes Sendwave the only major remittance provider with such an offering in the US.
It allows access to up to 0.4 per cent improvement on exchange rates and up to 25 per cent savings on transaction fees on remittances to Kenya, Ghana, Tanzania, Uganda, Nigeria, and Liberia when using the funds in their accounts.
For migrants, opening a bank account is considered an important step to establishing themselves and helps to achieve financial autonomy.
“Sendwave Pay provides an opportunity for our customers to build cross-border wealth and recognizes the demand for a product that better serves customers’ needs than a standard bank account,”management said.
Eric Huynh, Product Lead, Sendwave Pay, Zepz said: “The way that people use and access money has drastically changed over the last decade. We created Sendwave Pay to better meet the needs of our customers, who are dynamically considering how they manage their money both for themselves and for loved ones abroad.”
Sendwave Pay is the first neobank offering within Zepz, the Group powering global remittance brands Sendwave and WorldRemit.
Zepz intends to continually invest in migrant-focused financial offerings, management said.
“Investing in meaningful innovations to serve the needs of cross-border communities is part of our purpose and at the heart of everything we do,” said Mark Lenhard, CEO of Zepz.
The developments come amid growing remittances as Kenyans working and living abroad continue to support loved ones back at home.
In July, they sent a record $378.1 million (Sh54.6 billion) mainly to cushion the recipients from the economic tough times.
This was an increase of 18.4 per cent from the $319.4 million (Sh46.1 billion) posted in July 2022, and is the second month in a row that Kenya posted an increase in foreign inflows.
In the 12 months to July. cumulative inflows recorded a two per cent increase to $4,076 million (Sh588.4 billion), compared to $3,995 million(Sh576.7 billion) in the similar period in 2022, Central Bank of Kenya data shows.
WorldRemit in a study noted that while inflation in the key source of US has been a major concern, remittances are nevertheless expected to remain stable, as Kenyans living in the diaspora continue to make sacrifices to support loved ones back at home.
Education, healthcare, and household needs are the main uses of remittances in Kenya, according to an analysis by WorldRemit.
A recent study by the firm indicated Kenyan households spend more than 10 times monthly income on school supplies.
As inflation persists and supply chain issues continue to arise across multiple sectors, it comes as no surprise that on average, countries observed can expect costs to rise.
Findings for Kenya show the total cost per child is Sh68,701.
Given the average household size in Kenya of 3.23, the total cost per household is estimated at Sh221,904.23.
This is higher than average incomes for most households in the country, with the survey showing the cost of education for most households is 1054.31 per cent, or approximately 10 times their average monthly household income.