How African Fintechs Can Break Western Union and MoneyGram’s Grip on the Continent

For decades, Western Union and MoneyGram have controlled the remittance market in Africa, acting as the go-to services for sending money from abroad. With over $100 billion flowing into Africa annually in remittances, it’s a massive industry. But if you ask the people who rely on these services, many will tell you the same thing—they’re expensive, slow, and inconvenient.

Despite the growth of mobile money and digital banking, Western Union and MoneyGram have remained dominant, largely because of their trusted brand names, vast agent networks, and partnerships with banks.

But this is exactly where African fintechs can disrupt them. By being faster, cheaper, and more accessible, local fintech companies have an opportunity to not just compete but completely reshape how remittances work on the continent.

But breaking the monopoly of these legacy players won’t be easy. So how can African fintechs win?

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1. Solve the Biggest Problem: High Fees Are Killing Wealth Transfer

If there’s one thing that has always frustrated me about the remittance industry, it’s this: why are we paying such high fees just to send money home?

The reality is, many African families rely on remittances for basic survival, yet companies like Western Union and MoneyGram charge fees ranging from 7% to 10% per transaction.

When you add the hidden exchange rate markups, the actual cost is even higher.

Fintechs can undercut these fees using digital-first solutions:

• Blockchain & Stablecoins: Companies like Yellow Card and BitPesa (now AZA Finance) use crypto to move money across borders at a fraction of the cost of traditional remittance services. Swiss fintech company Centi has also recently announced a new partnership with Yellow Card, the leading cryptocurrency exchange that operates across Africa.The collaboration will allow people in Europe to send money more easily to 20 African countries, expanding Centi’s coverage from eight countries previously.

• Peer-to-Peer (P2P) Transfers: Instead of going through banks and middlemen, fintechs like Chipper Cash allow users to send money directly between mobile wallets—no intermediaries, no high fees.

• Transparent Pricing Models: Fintechs must win consumer trust by providing clear, flat fees without hidden charges buried in exchange rates.

By making transactions cheaper and more predictable, fintechs can quickly win over price-sensitive users,especially the African diaspora, who send small amounts home regularly. If we’re serious about keeping more wealth within African families instead of handing it over to foreign financial giants, fintechs must take a hard stand against high remittance costs.

2. Mobile Money Is the Future—Why Aren’t More Fintechs Leveraging It?

Africa is a mobile-first economy, and the success of M-Pesa, MTN MoMo, Orange Money, and Airtel Money proves it.

Over 600 million people use mobile money in Africa, yet most remittance services still rely on traditional banking rails. This is a wasted opportunity.

The fintechs that will win are the ones that integrate directly with mobile wallets, ensuring recipients can receive and spend money without needing a bank account.

Take Wave, for example. The Senegalese fintech offers free deposits and withdrawals, making it one of the fastest-growing financial services in West Africa. They didn’t try to force people into using banks-instead, they built a solution around how people already use money.

For fintechs looking to compete, the strategy is clear: make mobile money the primary cash-out option, not an afterthought. If remittance services can seamlessly deposit money into a recipient’s MoMo or M-Pesa wallet, they eliminate friction and create real convenience for everyday users.

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3. The Cash Problem: Breaking the Western Union Agent Network Model

One of the biggest advantages Western Union and MoneyGram have is their massive agent network. This is key because while digital payments are rising, cash is still king in many parts of Africa.

Fintechs need a scalable solution for cash withdrawals, and the answer isn’t building expensive agent networks—it’s leveraging existing retail infrastructure.

TymeBank’s Playbook: A Model Fintechs Should Copy

When TymeBank launched in South Africa, it had zero bank branches, yet it scaled rapidly. How? By partnering with Pick n Pay and Boxer stores, giving customers thousands of locations to access banking services without needing traditional bank branches.

Fintechs can do the same for remittances:

• Retail Partnerships: Fintechs should partner with supermarkets, gas stations, and retail chains like Shoprite, Kin Marche, Total Energies, or Jumia to allow cash withdrawals.

• Agent Networks 2.0: Instead of building brick-and-mortar locations, fintechs can enable small businesses like small grocer shops to act as cash-out points for remittances.

By doing this, fintechs can replicate Western Union’s cash access model but with far lower operating costs and greater accessibility for rural communities.

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4. Speed and Convenience Are Non-Negotiable

If you’ve ever had to wait days for a remittance transfer, you know how frustrating it is. Traditional services like Western Union and MoneyGram still rely on outdated banking systems, meaning transactions can take anywhere from a few hours to several days.

Fintechs have an edge in speed, and they need to make it their biggest selling point.

• Blockchain-Based Settlements: DeFi-powered remittance platforms can settle transactions instantly, avoiding banking delays.

• AI & Automation: Legacy systems are slow because they rely on manual verification. Fintechs can use AI-powered identity verification to reduce transaction times from days to minutes.

Companies like Flutterwave (with Send) and Paystack are already offering near-instant transactions, proving that fintechs don’t need to play by old banking rules.

When customers realize they can get their money instantly, without waiting in line at a Western Union branch, fintech adoption will skyrocket.

5. Stablecoins & Crypto: The Next Frontier of African Remittances

If fintechs truly want to shake up the industry, they need to go beyond just copying Western Union’s model—they need to leapfrog it entirely.

Stablecoins like USDT and USDC offer a way to:

• Bypass Banks Altogether – No need for SWIFT or expensive banking intermediaries.

• Avoid Exchange Rate Markups – Stablecoins let people send and receive money in USD equivalents, keeping value intact.

• Enable Borderless Transactions – With a decentralized network, transfers can happen anywhere, instantly.

I know crypto adoption still faces regulatory hurdles, but fintechs that embrace stablecoins will be the ones to redefine remittances in Africa.

6. Regulatory Buy-In: The Final Barrier to Scale

Let’s be real—no fintech can scale in Africa without dealing with regulators. Western Union and MoneyGram have decades of government relationships, and fintechs need to play the long game here.

To compete, fintechs must:

• Obtain remittance licenses from central banks to gain legitimacy.

• Partner with the Pan-African Payment and Settlement System (PAPSS) to facilitate seamless intra-Africa transactions.

• Engage with policymakers to create regulatory frameworks that support fintech-driven remittances.

A good example is Flutterwave, which secured a remittance license from the Central Bank of Nigeria in 2022—allowing it to compete directly with Western Union and MoneyGram.

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Final Thoughts: Can Fintechs Win?

Western Union and MoneyGram have been around for decades, but they are slow to adapt to Africa’s digital transformation. African fintechs, on the other hand, have:

✔ Agility – They move fast and adapt to local market needs.
✔ Lower Costs – By cutting out middlemen, they offer cheaper alternatives.
✔ Mobile-First Thinking – They integrate seamlessly with mobile money, unlike legacy players.
✔ Speed & Convenience – Instant transactions will always win over slow bank processes.

The real question isn’t if fintechs will disrupt the remittance market—it’s when they will fully replace the old players.

What do you think? Are Western Union and MoneyGram’s days numbered?

About the author

Tanya Kabuya is a seasoned entrepreneur, business strategist, and persuasive copywriter with a track record of helping businesses scale profitably and sustainably.

As the CEO of a revenue enablement firm, she specializes in driving sustainable growth for tech-enabled businesses and startups.

She is also the Editor-in-Chief of Business Creed Magazine and the founder of the Afripulse MSMEs Network, a platform empowering African entrepreneurs and investors.

Passionate about economic development, Tanya is a strong advocate for leveraging fintech, automation, and innovative business models to transform Africa’s business landscape.

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