Send Money To South Africa
The United Kingdom, Australia, and the United States are the top three destination countries for South African emigrants. Together, they contribute over 61% of the money sent back home by South Africans in the diaspora. In 2017, South Africa received $898 million, making it the 8th largest African country in remittance inflows.
In the 20th and 21st centuries, close to 4.3 million South Africans emigrated to different countries. Most of them left in search of employment opportunities and have been sending money home through banks, money transfer companies and other services.
In response to the remittances and other inflows, the remittance market has been undergoing regulatory changes. For instance, through the Exchange Control Circular No 16/2013, the country lifted ownership restrictions to allow foreign participation in money transfer operations.
Sending money to South Africa is now more competitive with the entry of more players into the remittance market. Therefore, it helps to know the different ways to send money to your loved ones in South Africa, the information required when sending and receiving, the benefits of using money transfer operators, and the specific things to consider when sending money. This guide will highlight those and more!
How To Send Money To South Africa
Sending money to South Africa is simple and easy. Follow these steps to get started.
Find a Trusted Provider
Sign Up and Deposit
Transfer Money
Ways To Send And Receive Money In South Africa
There are multiple ways to easily send and receive money in South Africa but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
Ways to Send Money to South Africa
The South African Reserve Bank has expanded the crossborder remittance environment in the country through regulation and licencing. Many service providers have been granted approval under the authorised dealers in foreign exchange with limited authority (ADLAs) licencing framework. As a result, senders have many different ways they can remit money to their families and relatives back home.
The following are some of the reliable and safe ways South Africans in the diaspora can use to send money.
Bank Wire Transfers
South Africa has over 22 registered banks comprising locally-controlled, foreign-controlled, mutual, and cooperative banks. Also, the banking system boasts over 50 branches of foreign banks. Therefore, moving money through the banking system from other countries to South Africa is relatively safe and convenient.
Notwithstanding their extensive network, banks are still grappling with unattractive exchange rates, longer wait times, and intense screening operations. Time zone differences and operating hours can lengthen the time bank transfers take to reach target beneficiaries back home.
Fortunately, money transfer service providers have come in to give South Africans in the diaspora more choices.
Online Money Transfers
Africa is rising. The opportunities across the continent have attracted lots of players into the international money transfer market. Companies like TransferWise, Xoom, MoneyGram, Western Union, Currencies Direct, First Rand, Mukuru, and WorldRemit have positioned themselves to take advantage of the various transfer corridors. We’ve put together a list of top 10 money transfer companies to get you started.
These companies also give favourable exchange rates, lower fees, and faster transfer times. Setting up is very simple. All you need is to sign up for an account and fund it via credit/debit card, bank transfer or cash deposit. Once the account is loaded, you can transfer the money right on the provider’s website, using a mobile application or visiting a store and sending from there. The following are the main sending options.
Bank Transfer – If the person you are sending the money has a bank account or prefers to receive money using this option, bank transfers can be convenient. Apart from safety, bank transfers can handle large amounts with no pressure to withdraw it all at once.
You can transact with the money however you like without necessarily having it in cash.
Cash Pickup- Depending on how close the recipient is to an agent of your chosen provider, you can send cash for pick up. The advantage of this method is that it is fast and very much convenient for small amounts. The recipient gets a voucher number with collection details.
Western Union has partnered with select ABSA branches while TranferWise leverages the Mukuru network for cash pickups. You can access MoneyGram services from FNB ATMs and cellphone banking.
Mobile Wallet- You can choose to send money directly to the recipient’s mobile wallet. This method is convenient both for the unbanked in rural South Africa and for recipients in urban areas as well. The money is literally in your hands the moment the transfer is complete. MoneyGram offers this service through Standard Bank.
Money Orders
The South African Postal Service established under the Postal Services Act of 1998 is in charge of both domestic and international money orders. International acceptability and sending limits vary from country to country.
The beauty with money orders is that neither the sender nor the recipient needs an account. Also, money orders are paid for well in advance thus guaranteeing the recipient will get their money. Only senders from participating countries can transfer money using this method.
What’s Needed to Send Money to South Africa
Whether you are sending to the Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, North West, Northern Cape, or Western Cape, your provider and the method of transfer will determine the details to provide. That said, the following is a list of what is typically required when sending.
- Your current government-issued photo ID
- If using a debit/credit card to fund your transfer, you’ll need to provide the respective card numbers
- The full name of the recipient as it appears on their official documents
- The address and phone number of the recipient
- If using the bank transfer method, you’ll need the beneficiary’s name, account number, routing number or swift code, and bank name.
On a case by case basis, senders may be asked to give more details on the purpose of the funds.
What Are the Ways of Receiving Money in South Africa
South Africa is the second-largest economy on the continent after Nigeria with a nominal GDP of $349,299 billion. The financial sector is well developed bringing together various platforms and products that enable residents to access their money and transact. Here are some of the ways you can receive money in South Africa.
Through the bank – If the sender does a bank transfer to your account, the money will reflect after a few minutes or days. Senders who fund their accounts using debit or credit cards experience the fastest send times. Other factors include the choice of provider, the amount involved, the day of the week, and the time of day the transaction is done.
Cash collection – You can collect your cash from the respective agents depending on the provider used. Ensure you choose a safe agent location and do not share your collection details with anyone. If possible, ask a family member or a trusted friend to accompany you.
Mobile Wallet – You can choose to have the sender deposit the money right into the mobile wallet in your phone. This method gives you quick access and safety.
What Is Required to Receive Money in South Africa?
Most if not all providers send you a notification on the mobile number provided by the sender telling you that your money is ready for collection. Much like the sender, you will need to provide information that will help to identify you and complete the transaction. Here’s the information to provide.
- Your government-issued photo identification. The name on the document should match what the sender provided.
- The transaction reference number provided by the sender
- The name of the sender and amount to be collected
Other providers will require that you explain the source of the funds or sign a declaration form that the funds are not proceeds of illegal business. You don’t need any identification to access money deposited in your mobile wallet or bank account.
Best Ways To Send Money To South Africa
Debit Card
1-2 Hours
Bank Transfer
1-2 Hours
Debit Card
1-2 Hours
Credit Card
1-2 Hours
Bank Transfer
1-2 Hours
Bank Transfer
3-5 Days
Debit Card
3-5 DaysCommon Reasons For Sending Money To South Africa
The unemployment rate in South Africa is currently at 27.2 per cent with 14 million people living in extreme poverty. This trend has led many people to emigrate in search of economic opportunities elsewhere. Looking at the characteristics of the remittances in terms of size and frequency, one can deduce several reasons for the remittances.
Family Support
The average household size in South Africa is 3.3 people. In terms of the cost of living, the country is the fourth most expensive in Africa. Household living expenses have been rising forcing many families to rely on their loved ones abroad or depend on government support. The main areas of support are food, clothing and personal care.
Education
The education system in South Africa consists of both private and public school systems. Compared to the private school, the public schools in South Africa suffer from poor teacher-student ratios, low quality of teaching, and teacher absenteeism. South Africans in the diaspora looking for quality education for their siblings and relatives enrol them in high-end private schools. The money they send home also caters for higher education.
Mortgages and other Loan Repayments
The cost of property in South Africa is relatively cheaper for South Africans in the diaspora. Mortgage uptake is on the rise with mortgage debt to GDP ratio of 20. Most of the mortgages bear interest rates of about 10% and last for 20-30 years.
The enactment of the National Credit Act 34 of 2005, streamlined access to credit. Small scale borrowers can obtain funds without much red tape. Households with loved ones in the diaspora often take advantage of such opportunities to get quick money and repay once they receive their remittances.
Investments
The investment climate in South Africa is more attractive compared to the rest of the continent. South Africans abroad remain true to their country and heavily invest in equity and debts instruments as well as the real estate market.
The investment money is sent alongside other remittances to households or directly to financial institutions. The government through the department of trade and industry has also stepped up its efforts to encourage investments.
Other reasons for remittances include health insurance and related expenses, travelling expenses, and social contributions.
Why Send Money With a Money Transfer Service?
The banking system and the postal service in South Africa have been the bedrock of financial services in the country. However, emerging technologies and the lethargy of slow and expensive remittance systems have made money transfer services to be preferred.
Read along for the top reasons why money transfer services are ruling the airwaves in South Africa.
Easy to Set Up
Flexibility in funding your transfer
Better Exchange Rates
Low Transaction Fees
Multicurrency Support
Transfer Speed
Things to Consider When Sending Money to South Africa
Before sending to South Africa, there are issues to consider. Think about the widening current account position, weakening commodity prices, above-average inflation rates and the taxation regime.
- Weak Current Account Position – The current account deficit in the first quarter of 2019 totalled $9,355 million. High current account deficits can erode investor confidence leading to capital flight. In turn, this will pile pressure on the rand.
- Weakening Commodity Prices – South Africa is a country heavily dependent on minerals. A weakening of the global commodity market prices can be disastrous for the economy. The currency will most certainly take a dip.
- Inflation – Currently, the economy is at 4.5% inflation. If it goes higher than this level, it will heat up and offload value. You’ll have to send your loved ones more money to enjoy the same basket of goods and services. For taxation purposes, the recipient must file the gifts or money received on the income tax return form. This step doesn’t give the taxman a foothold to tax you but ensures compliance.
Sending money to your family, relatives, and friends in South Africa is faster, simpler and cost-effective now than ever before. However, you need to have the right information on the different ways of sending, what to provide when sending and receiving, cross-comparisons of the various benefits providers give, and the factors to consider back home before sending.
Your Questions Answered
Looking to Send Money Somewhere Else?
Sending money anywhere else in the world is as easy as sending money to South Africa. If you’re looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com