Adedapo Adesanya
By Adedapo Adesanya
Nigerian neobank, Kuda Bank, is expanding to the United Kingdom by offering a remittance product to Nigerians in the diaspora.
Kuda, which last year raised $55m Series B funding, is entering the UK market charging a flat fee of only £3 with a transfer limit of £10,000.
With over £3 billion sent from the UK to Nigeria yearly at an average fee of eight per cent per transaction, Kuda says it is set to save UK Nigerians millions of pounds.
Commenting on the launch of the UK app, CEO and co-founder, Mr Babs Ogundeyi, said, “Africans in the UK are faced with barrier after barrier when it comes to financial services – from challenges setting up accounts to prohibitive and inconsistent fees on meaningful transfers. They are forced to limit each transfer to a few hundred pounds to avoid losing money or face escalating exchange rates with bigger transfers.”
Kuda also expects most of the transactions that will take place on its platform to fall between £350 to £500, Mr Ogundeyi noted.
The Kuda chief also noted that “The UK is the first of the ‘outside of Africa’ destinations. We plan to be in other African countries and expand the remittance services to customers there and the diaspora market.”
In addition to remittance, Kuda intends to provide direct debits and local transfers to Nigerians in the UK down the line.
Unlike its remittance product, which might have been built in-house, Kuda, like many neobanks, will rely on a third party, usually a banking-as-a-service platform, to provide these financial services.
Kuda has thus tapped Modulr, an embedded payments platform for digital businesses, to offer a mobile wallet, virtual and physical cards, local UK transfers and direct debits.
Modulr will offer a mobile wallet, virtual and physical cards, local UK transfers and direct debits. The app is also supported by TellMoney, which helps Kuda maintain the open banking standard under Modulr’s requirements.
The Kuda app will be available on iOS, Android and the web, initially offering UK-to-Nigeria remittance, with plans to expand to other African countries in the near future.
Business Post reported recently that the bank, which calls itself Bank of the Free, on a directive from the Central Bank of Nigeria (CBN), started charging N50 on all deposits of N10,000 and above made into customers’ accounts.
