South African startup Mama Money has been listed as the cheapest remittance service for sending money from South Africa to Zimbabwe for the third quarter running by the World Bank.
Data gathered by the World Bank comparing the cost of sending money from South Africa to Zimbabwe through various different remittance services found that startup Mama Money offered the cheapest remittance rates available across the first, second and third quarters of 2015.
Mama Money launched in January this year, as such the data covers the whole lifespan of the startup.
Taking into account exchange rate fluctuations, Mama Money charges around 6 per cent on transactions – in Q3 its average charge came to 6.11 per cent.
The Q3 average across all providers was 13.61 per cent.
South Africa’s First National Bank (FNB) is listed as the competitor offering the nearest prices – charging 6.86 per cent in Q3; although Mama Money says it does not consider FNB a competitor as it only caters to FNB customers.
Mama Money allows customers of any bank to send money from South Africa to Zimbabwe through its service. Users of the service make a mobile or internet banking transfer to Mama Money, which exchanges the currency and sends the money to a Zimbabwe-based account, charging only a 5 per cent fee.
The startup does not allow for cash remittances; all its users must have an existing bank account.
Mama Money considers itself the “world’s first social business money transfer operator”, and says its ultimate goal is to reduce the poverty cycle.
“We started our business to address a problem, the high cost of sending money out of South Africa. If less money is left with the money transfer operator, more money arrives at home. This extra income is then spent on better quality food and education. That is our key priority. Ultimately helping to reduce the cycle of poverty,” says co-founder Raphael Grojnowski.
“All business decisions are based on that social goal, not profit, like other companies. In a way, you could say we are profit-minimizing. I don’t know any other money transfer operator that operates like that.”