Despite the change in the nature of work, international payments remain a major problem for many people in Africa. PayPal, for example, is one of the largest fintech companies in the world, facilitating millions of dollars in transactions every day. Yet, in several African countries like Nigeria and Zimbabwe, PayPal is significantly restricted.
This is not ideal for African entrepreneurs seeking money from their clients and customers. Even in countries like South Africa, Mauritius, Kenya, etc. where PayPal is fully supported, it is still important for entrepreneurs to have different payment systems for different purposes.
In this article, Business Insider Africa has compiled a list of 4 different ways for African entrepreneurs to receive payments internationally.
With a total market cap of over $2 billion, it’s safe to say that Payoneer is one of the largest payment solution providers in the world. Launched in 2005 by Yuval Tal and based in New York, USA, Payoneer offers multiple accounts in different currencies to receive payments around the world.
You need to create an account with the company and complete your KYC verification, among other requirements. Then you will receive a bank account in USD and GBP. Remote workers can share these account details with their clients/clients, who will pay for their services through the platform. As your account matures and your business grows, you will become more likely to have access to accounts in even more currencies, such as the Canadian dollar, among others.
Formerly known as TransferWise, this company was founded in 2010. Since then, it has garnered the trust and patronage of over 13 million people around the world. It is a great solution for receiving payments for African entrepreneurs. The account creation process is incredibly simple and straightforward.
It should be noted, however, that there might be some restrictions. In Nigeria, for example, you cannot receive money from Wise and automatically convert it to the local currency of your Naira bank account. In South Africa, you are also unlikely to be able to send your Rands as you please, and receiving is much easier.
That said, a great feature of this platform is its transparency with exchange rates. Even without opening an account, right from the landing page, it’s possible to instantly see conversion rates and get an idea of how much you’ll receive in your local currency with a real-time calculator and converter.
Unlike the first two companies mentioned in this list, Gray is relatively new and young in more ways than one. It was founded in 2020 by two Nigerians, Idorenyin Obong and Femi Aghedo. The startup is backed by Y Combinator and has raised over $2 million in expansion investments.
Their payment facilitation strategy is identical to that of Payoneer. They create foreign accounts for their users and said that users can go ahead and share these account details with their customers and get paid whenever they want.
Over the past two years, they have amassed over 100,000 users. Many users love Gray for its favorable exchange rates when converting to local currencies. Currently, their services are guaranteed in Kenya and Nigeria. In due course, the company plans to expand into Uganda and Tanzania, among others.
Many freelancers who provide digital services to clients around the world are familiar with Upwork. The platform has been around since 2013 and is supported in over 180 countries.
Thanks to Upwork, it is possible to find clients and invoice them for your services. Payment methods are also simple, with some countries being able to receive foreign currency directly into their local bank account in their home country’s currency.
In the past, Upwork did not support outputting your projects outside of their platform. But, with the relatively new Direct Contracts feature, you can get your client, create a contract on Upwork, send it to them, and have them pay through Upwork. Essentially, you will enjoy all the payment benefits of using Upwork. You will also have full control when deciding the terms of the deal, payment, etc.
The main condition is that the customer must not have an existing Upwork account. Otherwise, you can’t send them a contract and get paid.
Many African businesses are working on the payment challenge faced by several African entrepreneurs. The list above contains just a few. Before moving forward, it is advisable to conduct some personal research to ensure that the platform is right for you.