Why Wise chose South Africa as its first African market

Wise, a leading digital remittance provider which moved $190 million for 15.6 million active customers, is finally expanding to Africa.

Today, the London-listed fintech said it has received conditional regulatory approval from the South African Reserve Bank (SARB). In SA, it will operate as a Category 2 Authorised Dealer in foreign exchange with Limited Authority (ADLA).

ADLAs include bureaux de change, independent money transfer operators, and value transfer service providers. The licence permits Wise, an international money transfer operator (IMTO), to facilitate foreign exchange transactions with a limit of about $50,000 (R1 million) per Wise user per year.

“Our first regulatory approval in Africa marks a significant step forward in our mission…”, said Nadia Costanzo, Wise’s Director of banking and expansion for Latin America & the Middle East and Africa. “We can’t wait to bring our service to millions of South Africans – making it faster, cheaper and more transparent for them to move and manage their money,” Wise said in a LinkedIn post announcing the regulatory approval.

Wise’s African ambitions are finally coming to roost

In September 2024, Condia first spotted that Wise re-enabled transfers to Nigeria, Africa’s largest remittance-receiving country. This was an early sign of Wise’s renewed focus on the continent, following a two-year pause and several attempts in its 14-year journey. I discussed this extensively in the article for Condia.

In March 2025, Condia reported that Wise’s rival, Revolut, was expanding to South Africa and was seeking a banking licence. Unlike Revolut, Wise follows an asset-light model of applying for IMTO licences instead.

Around that time, Wise was hiring for a Banking & Expansion Manager – Middle East & Africa, which it has now closed, according to its careers website.

Why Wise chose to start with South Africa

Wise builds products for both sides of the remittance equation: send and receive. Its primary product for originating remittance is the Wise account, which onboards users and issues multi-currency accounts to them. While for receive, Wise leverages its foreign licences and/or partnerships with local financial institutions to deliver remittances to beneficiaries.

In remittance speak, Nigeria is predominantly a receive market. The country receives about $20 billion annually, which consistently places it in the top 10 remittance receiving countries in the world and number one in Africa. However, it sends out less than one-tenth (~$100 million) of that.

However, downsouth in sub-Saharan Africa (SSA), migrants in South Africa sends home about one billion dollars, making it the largest sender of remittance in region.

So, ceteris paribus when thinking about market and product expansion in SSA, you will want to proritise receive in Nigeria and send in SA, which is the formula Wise seems to be following. Things to consider other than volume is the ease of market entry, e.g. regulatory landscape, market tailwinds and headwinds, and competition e.g. how saturated the market is and what gaps still exist.

Opportunities for remittance in South Africa

Although a member of the G20 with a committment to more accessible and transparent cross-border payments by 2027, South Africa is still one of the most expensive countries to send remittance from. In Q1 2025, remitting from South Africa incurred an average cost of 15.23%, making it the costliest G20 country to send from. Brazil, the second most expensive G20 country, was only 9.96%. Australia, the least expensive G20 sending country costs 5.11% of the transfer amount.

Remittance providers, like Wise, with a huge focus on transparency will look to profit from the regulatory clarity and bilateral tailwind in South Africa. “South Africans are among the most digitally savvy consumers on the continent, yet many still face high costs, poor price transparency, and slow, inconvenient processes when sending money abroad,” Costanzo said.

What next for Wise in Africa?

With an originating licence in South Africa, Wise will need to decide if it wants to expand its send-countries. Although, less likely, given how other send volume from Africa pales in comparison to countries outside the SSA region. For instance, Qatar, in the middle east, sends $12 billion worth of remittance.

It can follow the money trail of where South Africans send remittance to; their neighbouring countries, with Zimbabwe, Lesotho, and Malawi as top recipients and ensure it can terminate remittances there.

Or Wise will look to deepen its stance in other top remittance receiving markets, like Nigeria, where it notably does not yet have an IMTO licence to improve their margins and product quality.

Whichever way the fintech giant chooses to go remains to be seen, but expansion to South Africa is a clear signal that the country is finally serious about the African market.

Other African remittance players like LemFi, MonieWorld will not to buckle to receive a new well-capitalised competitor, as will emerging players like AfriChange, and OhentPay.