Nigerians living in the U.K., — approximately 178,000 as of last year per the Office for National Statistics — have consistently ranked among the top 10 migrant communities in the country, making them an attractive customer base for firms operating in the competitive U.K.-Nigeria remittance corridor.
In fact, the World Bank estimates that Nigeria, a Commonwealth member country, receives 10% to 15% of all remittances originating from the U.K., an indication of the deep historical and economic ties between the two countries.
As such, British Nigerians have much to gain from the steadily declining fees on international transfers from the U.K., which, according to the World Bank, fell from 6.44% to 6.25% between 2017 and 2021.
That decline has been fueled by the arrival of nontraditional FinTech players in the cross-border payments space, including several African and U.K.-based firms focused on driving down the cost of moving funds between the two countries.
Nigerian money app Kuda, for example, announced that this month it is launching in the U.K. with a goal to serve the remittance needs of Nigerians living in the country.
Offering a flat fee of £3 for transfers up to £10,000, Kuda is hoping to take a slice of the sizable market for U.K. to Nigeria transfers, which according to the firm, amounts to over £3 billion ($3.53 billion) every year.
Read on: Nigerian Money App Kuda Launches in UK
Blockchain, Partnerships and B2B Solutions
Like many of the Nigerian FinTech challengers that have risen to prominence in recent years, Kuda emerged out of the need for an accessible alternative to institutional banking for large swathes of Nigeria’s financially excluded populations.
See more: FinTechs Solve Nigeria’s Financial Inclusion Challenge
Other well-known payment technology companies in Africa, including Flutterwave and OPay, have also made the day-to-day payment challenges of ordinary Nigerians a key part of their work to address pain points in cross-border transactions.
In fact, with the abundance of mobile money and digital payment solutions, recipients are no longer required to have a bank account or physically pick up cash from a local money transfer branch.
New remittance capacities have further been achieved through partnerships with existing international infrastructure providers.
For example, last year Flutterwave teamed up with Stellar to enable blockchain-powered transfers from Europe to Africa, while OPay has inked a deal with WorldRemit to enable international money transfers to be sent directly into OPay mobile wallets in Nigeria.
Read more: Flutterwave Enables X-Border Payments From Europe to Africa
Beyond peer-to-peer remittances, Nigerian businesses that export to the U.K. also benefit from cheaper, more convenient cross-border payment solutions.
Like individuals sending money back home to friends and family, these firms have access to an increasing number of options when it comes to collecting business-to-business (B2B) payments cross-border.
Nigerian FinTech Vella Finance, which recently launched a platform to help streamline cross-border payments for owners of small to medium-sized businesses (SMBs) in Africa, is one of such firms.
Learn more: Nigerian FinTech Vella Finance Launches Platform for SMBs in Africa
As PYMNTS reported, the solutions offered by Vella include Global Pay, aimed at helping businesses send money to partners in 80 countries around the world.
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