FinTech: Global Payments Company WorldRemit Acquires Africa-Focused Sendwave
The cash-and-stock deal was consummated for an undisclosed amount.
WorldRemit, a cross-border and worldwide payments processor, announced Tuesday its acquisition of Sendwave, an app-based remittance company that focuses on recipients in Ghana, Nigeria, Senegal, and East Africa. (BusinessWire)
The companies expect to close the cash-and-stock transaction by the fourth quarter of 2020, provided they complete regulatory formalities.
The companies did not disclose the terms; however, Bloomberg said the deal was worth more than $500 million. Further, it valued the combined organization at over $1.5 billion, quoting sources who did not want to be named.
COVID-19 spurs digital payments
The digital payments and remittances markets received a boost from COVID-19. That’s because consumers shunned physical interactions and brick-and-mortar bank branches due to distancing and lockdowns.
In an interview with Bloomberg WorldRemit Chief Executive Officer Breon Corcoran said the rate of new account activations had more than doubled this year.
UK-based Paysend and Alipay, China’s largest mobile payments network, announced their partnership the same day. The UK FinTech will facilitate overseas users to send money across borders through licensed banks in China. The funds will reach bank accounts linked to the Alipay app.
The collaboration will be very useful for migrant workers around the world, especially in Asia, Paysend says.
However, these same migrant workers may face the heat from an economic slowdown resulting from the COVID-19 pandemic.
These conditions could spark the sharpest decline in global remittances in recent history according to a statement by the World Bank in April.
“Remittances to low and middle-income countries (LMICs) could fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households,” the bank warned.
Transaction volume at WorldRemit – Sendwave
In the year ended June 30, WorldRemit and Sendwave remitted US $7.5 billion in transfers, generating approximately US $280 million in revenue, and showing a year-on-year growth rate of over 50%.
“WorldRemit has one of the broadest and most accessible networks for money transfers globally,” said Corcoran in a statement. “Combining it with Sendwave, which offers instant, no/low-fee and fully digital payments from North America and Europe to Ghana, Nigeria, Senegal, and East Africa, addresses customer needs for fast and secure digital payments – especially given today’s travel restrictions and economic turmoil.”
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