By Mark Kawalya
The Ugandan remittances industry is becoming more competitive as new players enter the market, offering a wider portfolio of services at more affordable rates. PostalPay, a new platform that promises to cut down on the costs of sending funds from parts of Europe to Uganda, is under development.
The application is the brainchild of the UN’s International Fund for Agricultural Development (IFAD), Inpay, a border-to-border payments firm, and Eurogiro, an international global postal cross-border payments network. The mandate of PostalPay is to lower the cost of sending money using mobile channels from Europe to Uganda, with a target of making it four times cheaper.
Developed by Inpay and Eurogiro in a partnership with PostBank Uganda and Posta Uganda, the PostalPay app will offer a platform through which people living in the EU can send funds to Uganda not only affordably but also through a faster and safer process using their mobile devices.
The app will be a tool that migrant workers can use to remit funds to their family members that are living in some of Uganda’s far flung communities.
Money can either be directly remitted to a PostBank bank account or picked up from any of the numerous PostBank branches or Posta Uganda offices.
“By using our cross-border payment technology, we are cutting the total costs of remittances to 2.5 percent,” said Thomas Jul, CEO of Inpay and Eurogiro.
A grant from IFAD of €369,000 has been allocated to facilitate the launch of PostalPay in Sweden and the Netherlands. The two countries have a significant number of Ugandans in the diaspora, creating a potential market for the service. The contribution from IFAD is part of the Prime Africa Programme which is financed in part by the European Union with support from the Government of Luxembourg. Eurogiro and Inpay are jointly contributing €172,000 as co-financiers for the venture over the next 18 months.
Statistics show that in 2021, a sizeable amount of $1.088 billion was remitted to Uganda, representing close to 3% of the country’s national GDP.
The partnership stems from a previous IFAD grant that Postbank Uganda and Posta Uganda received between 2017 and 2020. The financing enabled the extension of financial services such as remittances to rural communities. Additionally, 30 post offices were set up and mobile branches opened.