Kuda Bank, the Nigerian neobank, has expanded to the United Kingdom to offer remittance services to Nigerians in the diaspora.
The startup, 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 percent per transaction, Kuda says it is set to save UK Nigerians millions of pounds.
Babs Ogundeyi, CEO and co-founder 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, Ogundeyi noted.
The Kuda founder added: “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.
