Kuda Bank, a Nigerian neobank, is expanding to the United Kingdom by offering a remittance product to Nigerians living abroad.
Kuda, which raised $55 million in Series B funding last year, is entering the UK market with a flat fee of £3 and a transfer limit of £10,000.
With over £3 billion sent from the UK to Nigeria each year at an average fee of 8% per transaction, Kuda claims it will save UK Nigerians millions of pounds.
In response to the launch of the UK app, Mr Babs Ogundeyi, CEO and co-founder, stated, “Africans in the UK face barrier after barrier when it comes to financial services, from difficulties opening accounts to prohibitive and inconsistent fees on meaningful transfers.” To avoid losing money or facing escalating exchange rates with larger transfers, they are forced to limit each transfer to a few hundred pounds.”
Kuda also expects the majority of transactions on its platform to be between £350 and £500, according to Mr Ogundeyi.
The Kuda CEO also stated, “The United Kingdom is the first of the ‘outside of Africa’ destinations.” We intend to expand our remittance services to customers in other African countries as well as the diaspora market.”
Kuda plans to offer direct debits and local transfers to Nigerians in the UK in addition to remittances in the future.
Kuda, 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.
As a result, Kuda has partnered with Modulr, an embedded payments platform for digital businesses, to provide a mobile wallet, virtual and physical cards, local UK transfers, and direct debits.
Modulr will provide a mobile wallet as well as virtual and physical cards, as well as local UK transfers and direct debits. TellMoney also supports the app, which assists Kuda in meeting Modulr’s open banking requirements.
The Kuda app will be available on iOS, Android, and the web, and will initially offer remittances from the United Kingdom to Nigeria, with plans to expand to other African countries in the near future.
According to Business Post, the bank, which calls itself Bank of the Free, began charging N50 on all deposits of N10,000 and above made into customers’ accounts on a directive from the Central Bank of Nigeria (CBN).
