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Chipper Cash Extends P2P Money Transfer Service to South Africa

Chipper Cash, a fintech startup from Africa, has expanded its peer-to–peer instant money service into South Africa. South Africans will now be able use the remittance services and can also buy, sell and transfer cryptocurrencies such as bitcoin, ethereum and the USDC stablecoin.

South Africa Poised for Disruption and Innovation

Chipper Cash, according to a report, has entered South Africa as its VP Strategy and Partnerships in Africa. Pardon Mujakachi is quoted in the report. Chipper Cash believes that South Africa is “ripe for disruption” and innovation in the financial service market.

According to the report, the VP also stated that it takes three days for someone in the U.S. send money to South Africa. On the other hand it can take up to 48 hours for funds to be moved from one bank to the next.

Mujakachi argued that it is these inefficiencies that drive users to use informal channels. Mujakachi also shared numbers of those users who are forced to use these informal channels. He stated:

People end up using informal channels to send money. If you look at the outbound remittances from South Africa, 68% is going through informal channels. Even with the domestic remittances, a sizeable amount goes through the informal channel.

According to Chipper Cash VP, this is where the fintech company will start in South Africa. This app will only be available to verified users.

Legacy Money Transfer Organizations

Chipper Cash, just like other fintech start-ups before it, is attempting to claim a sizeable portion of the cross-border remittance market share from established money transfer organizations (MTO).

By offering lower transaction costs, Chipper Cash potentially stands a chance of eating into existing MTOs’ market share. However, it remains to be seen if this mobile app is going to win over South Africa’s financially excluded groups. This is because in addition to lacking the required verification documents, some in these financially excluded groups have no access to devices that are needed to use the mobile app.