WorldRemit Demands Regulation to Curtail Paysii Competitiveness in Somalia

[Deeq A.]

Ismail Ahmed: “With Zaad processing 80% of Somaliland’s GDP and 95% of its remittances, there are calls for regulations to protect consumers and encourage fair competition.”

Mogadishu (PP News Desk) — Twenty years ago the process to wire money from Northern Europe or North America to Somalia was cumbersome. A customer had to go to a money transfer company’s agent and send money to be received the next day. With the introduction of PaySii app more than 85% of the commission has been slashed, and with it the hassle of going to money transfer agent’s office.

PaySii is the most favourite money transfer app for the Somali diaspora.

PaySii uses Somali-based digital wallets to give customers the option to receive mobile money or let the recipient collect the money at the local money transfer agent’s office. This financial transformation has been hailed as a timely step towards financial inclusion for the unbanked in Somalia, but to key players in the sector such as WorldRemit, it quashes competition in the financial services sector of Somalia.

WorldRemit is a global money transfer company based in London.

Ismail Ahmed, the British-Somali founder of WorldRemit, a global money transfer company, tweeted that in North Somalia particularly areas under the control of Somaliland administration, regulation could protect consumers from the concentration of money transfer services in one behemoth such as Hormuud, the owner of PaySii.

Network effects give Hormuud Telecom a competitive advantage.

“Telesom, the dominant mobile money service in Somaliland, has blocked international transfers to its own platform, Zaad. Despite the Central Bank’s orders, it has not yet reinstated access to the service, significantly impacting many families who rely on remittances. This move followed the expansion of Hormuud Goup’s subsidiary PaySii which competes with these companies and sends money from Europe and North America. With Zaad processing 80% of Somaliland’s GDP and 95% of its remittances, there are calls for regulations to protect consumers and encourage fair competition” tweeted Ismail.

His anti-trust call could force Somaliland authorities to compel Hormuud to break up into two companies to have its competitiveness curtailed. In Somalia, WorldRemit lacks the network effects that give Hormuud competitive advantage in a sector with a decreasing barriers to entry.

© Puntland Post, 2023

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