South African digital retail bank Capitec has introduced a new cross-border remittance service through a partnership with fintech company Mama Money.
The integration allows Capitec customers to send money abroad directly via the bank’s mobile app, using a token-based system that enables recipients to collect cash without a bank account. The move comes in the context of growing demand from South Africa’s migrant population, estimated at 2.4 million, for more accessible and lower-cost options for sending money home. Many migrants come from neighbouring countries, including Zimbabwe, Malawi, Mozambique, and Lesotho. A significant proportion are women who regularly send funds to support families in their countries of origin.
Traditional money transfers from South Africa have typically involved complex processes and fees ranging from 8% to 12%. According to the companies, this new remittance service starts from 5% in fees, with transactions processed within minutes rather than days.
High fees and limited access prompt a shift
The new service uses the Universal Mama Money Token, a 12-digit code sent via SMS to the recipient, who can then collect the funds from banks or agents in over 70 countries. The system does not require the recipient to hold a bank account, which is expected to improve access in underserved regions.
Representatives from Capitec stated that the product was developed in response to the practical challenges faced by people working in South Africa who need to send money to family members abroad. They noted that existing solutions were often expensive and difficult to use, particularly for those on low incomes.
Officials from Mama Money added that the high cost of remittances has historically placed an unnecessary burden on migrant workers. They pointed out that when someone earning minimum wage must pay high fees just to transfer money, it directly impacts household budgets in recipient countries.
The partnership leverages Capitec’s digital infrastructure and client base, alongside Mama Money’s experience in handling remittance services across Africa, Asia, and Europe. The platform complies with local financial regulations and is now fully operational through Capitec’s mobile banking app.
