Kuda Bank Launches Remittance Services in the UK

Kuda Bank Launches Remittance Services in the UK

Kuda Bank, Nigeria’s foremost mobile-only licensed neobank, is expanding to the United Kingdom to provide remittance services to Nigerians living abroad.

Babs Ogundeyi and Musty Mustapha founded the London-based startup in 2019. It provides financial services to Africans (beginning with Nigerians) both within and outside of Africa. As a result, services to Nigerian users are provided by its subsidiary, Kuda MFB Limited. Kuda EMI Limited, on the other hand, is in charge of the newly launched services, one of which is remittance, to Nigerians in the United Kingdom.

The plan is a business strategy to capitalize on the opportunity provided by Nigeria as the largest inbound remittance market in Sub-Saharan Africa. Nigeria, which ranks among the top ten remittance recipients globally, received about 4% of its GDP in 2020. However, sending money to Nigeria from places like the United States and the United Kingdom remains prohibitively expensive. Sending money from the United Kingdom, for example, costs the sender 3.7% of the amount sent.

Responding to a question on why its firm is venturing into a crowded veridical, Babs Ogundeyi, Kuda CEO says “I don’t necessarily think it’s crowded because obviously, there are still a lot of challenges in remitting money to Africa, especially to Nigeria. But for us, it’s not just a remittance play. There’s a user experience, convenience, and price factor involved.”

Kuda claims that its approach is unique. The fintech company says it will enter the UK market with a flat fee of £3 and a transfer limit of £10,000. And Kuda, which has raised over $90 million from investors including Peter Thiel’s Valar Ventures and Target Global, expects its transaction range to be between £250 and £500, according to the CEO.

Kuda Bank is also Offering Other Services

Kuda will also offer direct debits and local transfers to Nigerians in the United Kingdom. According to the plan, Kuda intends to take a small piece of the cake from other neobanks such as Revolut, Monzo, and Wise.

These platforms have developed features that have resulted in strong adoption across various demographics, including Nigerians, the niche population Kuda is targeting with its launch; therefore, it remains to be seen if remittance, the low-hanging fruit, is sufficient to derive long-term value and if it has enough pull to get customers to use other services regularly.

Kuda bank, like many neobanks, will rely on a third party, usually a banking-as-a-service platform, to provide these financial services, as opposed to its remittance product, which may have been built in-house. Modulr, an embedded payments platform for digital businesses that offers a mobile wallet, virtual and physical cards, local U.K. transfers, and direct debits, is the platform in question for Kuda.

“Ultimately, Kuda’s goal is to create a one-stop shop for Africans, including services other than remittances.” “And our plan is not just for Africa, but for Africans all over the world,” Ogundeyi said of the expansion. “The United Kingdom is the first ‘outside of Africa’ destination.” We intend to expand our remittance services to customers in other African countries as well as the diaspora market.”

Since its debut in Nigeria in 2019, the digital bank has seen some success. Kuda claims to have up to 5 million users, which is more than three times the number it had last August during its $55 million Series B round, which it used to expand into other African countries such as Ghana and Uganda this year.