Domestic Money Transfer has become one of the fastest-growing sources of non-interest revenue for banks in the past year, making R163 billion per annum* across the industry. With consumer adoption continually increasing, the market has become saturated, so it is critical to have a focused strategy.
In their FY2025 financial results report, Capitec announced that they increased their net Send Cash revenue to R606 million, a 44% increase from the previous year. First National Bank (FNB) saw an increase of 4% in new users for its eWallet. More users are embracing money transfer options.
The increase in money transfer adoption stems from several factors, including:
The market has become highly competitive with the rise in demand for money transfer services. The key question is:
Considering the main drivers for users to embrace money transfer, there are several strategies you can employ to differentiate your service:
Expanding your retail distribution chain gives your customers options for accessing their money through your money transfer services. Some banks further build the retailer partnership by offering free or discounted withdrawals at specific stores to encourage consumer adoption and capture market share.
Since your retail partner handles your distribution, you don’t have to worry about the cost and risks of installing or transporting cash across ATMs. Challenger banks, in particular, are embracing the benefits of partnerships, leveraging retailers’ footprints and distribution channels as cash points.
However, some things to consider when expanding your retail money transfer distribution chain include accounting for the upfront costs associated with retailer distribution networks of money transfers, such as development costs for integrating your systems and agreements with money transfer aggregators.
Time is also needed to set up these services. While partnering with payments experts like Electrum can reduce these timelines, they are still worth considering when forming your money transfer strategy.
According to our latest research ATMs are the most commonly used money transfer redemption points by a significant margin.
With more ATMs, your customers will have 24/7 cash-out access. You can also provide your customers with extra services connected to each ATM, giving them greater convenience.
However, many banks are decreasing the number of ATMs they operate due to their upkeep or replacement cost, safety factors surrounding ATMs, and the rural nature of many money transfer customers.
While ATMs are still important to any money transfer strategy, banks must carefully consider how they adapt this aspect of their network for their customers. Absa is modernising its ATMs, investing in newer devices with superior capabilities.
According to a recent survey, 81% of customers prioritise ease of use regarding digital banking options. So, making your money transfer services easily accessible, with as few clicks as possible, may offer a way to grow your market share.
Other strategies for driving app adoption include zero-rating your app, making it more cost-effective for consumers, or providing incentives through loyalty programmes.
According to our latest research 39% of all transactions include sending on behalf of friends and family too. Meaning individual users are likely performing multiple transactions every month. This means a seamless purchasing experience is incredibly valuable to widen a money transfer offering, as the consumers who interface with the product will do so regularly. Regardless of how streamlined your banking app experience is, you still need a wide cash-out network to support it to reap the full benefits of your app development.
Partnering with the right software provider can ensure that your solutions go to market quickly, are scalable, and are secure.
Working with a partner who has experience implementing money transfer solutions for several major South African banks and a specific understanding of the South African market can help ensure a refined strategy that works for your bank’s position now and ten years from now.
Electrum has worked with leading banks like Capitec to provide cloud-native next-generation solutions that rapidly scaled their Send Cash service. This helped Capitec to focus on their market differentiators and provide their solution to more than 11 million bank app users through over 1.7 billion transactions.
Chat with us to learn more about expanding your money transfer offering in a way that suits your business.
________________________________________
* Note that growth in consumer adoption of Domestic Money Transfer is indicated by early research insights (fully available from June 2025).