# Skip the banks: Money remittance & get the best exchange rate

> - Crypto makes sending money to Tanzania and changing currency cheaper than banks and the usual remittance services.
> - The root problem is a lack of foreign currency, which costs businesses up to 10% in Tanzania and 40% to 50% elsewhere.
> - Money can land on M-Pesa, in a bank account or as cash at a Wakala shop, and foreign investors can get 10% more.

By emin.de AI Desk. AI-written, human-supervised: not yet reviewed. Published 2024-09-06. Updated 2024-09-06.
Canonical: https://emin.de/posts/skip-the-banks-money-remittance-get-the-best-exchange-rate
First published: https://medium.com/@em/skip-the-banks-money-remittance-get-the-best-exchange-rate-972f1ce0cebd (2024-09-06)
Category: payments. Format: guide. Language: en.
Provenance: ai_generated. AI-assisted: true. Reviewed by a human: false.

This is about how to send money to Tanzania. From a bank account or a credit card to mobile money like M-Pesa, Tigo Pesa and Airtel Money, or as cash that you pick up at a Wakala shop.

There is one in almost every village in Sub-Saharan Africa.

The short version. Cryptocurrency makes sending money and changing currency cheaper than NALA, Revolut, Transfer Wise, Remitly, Western Union, Moneygram and the normal banks. You save around 15 to 20%, because the rates are better and the fees are lower.

If you send money home, it can go straight to a local bank account, to mobile money, or it gets delivered as cash.

Businesses save a lot when they change big amounts of foreign currency and pay invoices abroad. And foreign investors can get 10% more money when they bring it in through the right exchange.

## Not enough foreign currency

The reason behind all of this is that there is not enough foreign currency.

In a lot of countries the government tries to keep the price of things people really need, like gasoline, low. So it sets a maximum price. In Tanzania that price is in Tanzanian Shilling (TZS).

And here is the problem. On the world market gasoline is paid in foreign currency like the US dollar. Outside of Tanzania almost nobody wants Tanzanian Shilling.

For local businesses this is hard. A gas station has to buy gasoline in foreign currency, but it can only sell it in TZS.

There isn't enough foreign currency in Tanzania, so the people who run gas stations often have to change their TZS at a bad rate and lose up to 10%.

In other countries in Sub-Saharan Africa that loss can even be 40% to 50%. With rates like that a gas station can't keep up on the world market. So you get empty pumps and angry drivers all over the region.

It gets worse. On top of the loss from changing TZS, a lot of people speculate with US dollars on the black market, and that pushes the price up even more.

Everyone who depends on trade with other countries pays for it, like car dealers, supermarkets and airlines.

**Basically,** Price caps in shillings and fuel bought in dollars mean gas stations lose up to 10% on every exchange.

## Fees eat what people send home

Then there is the cost of sending foreign currency to Africa at all. Banks take high fees and often give you a bad rate, so you lose money twice.

If you work abroad and send money home, a big part of what you earned just goes away in fees and bad rates. Millions of people depend on this money to support their families, so it hurts a lot.

**Basically,** Banks charge high fees and give bad rates, so people sending money home lose twice.

## Wakala shops

This is where the Wakala shops come in. In Tanzania and all over Sub-Saharan Africa they are a big part of how money moves. These local agents are in almost every village.

You can pick up cash there right away, or get the money straight to your phone with M-Pesa or Tigo Pesa.

A bank transfer is slow and expensive, and a lot of people can't really get to a bank anyway. A Wakala shop is fast, close and cheap.

So you can send money from your bank account or your credit card straight to someone's mobile wallet. Or they pick it up as cash at the next Wakala shop. You skip the high fees and the bad bank rates.

It doesn't matter where the person lives, they get the money fast. That's why millions of people in the region use it.

**Basically,** Wakala agents are in almost every village. Cash right away or straight to M-Pesa, fast and cheap.

## Where crypto comes in

And this is where cryptocurrency comes in. There is a project that wants to bring exchange rates back to normal and make sending money cheaper. It doesn't go through banks and SWIFT transfers. It uses a network of licensed traders and crypto.

An example. A car dealer in Tanzania can now change TZS into crypto, send it to Japan and change it into yen there. That is faster and a lot cheaper. Instead of losing 15%, the dealer could even make 5% on the exchange.

If you want to send money to your family in Africa, it's also cheaper than NALA, Revolut, TransferWise, Remitly, Western Union or Moneygram. And you can choose. The money goes to a local bank account, to mobile money, or it gets delivered as cash.

For millions of people in Sub-Saharan Africa who live from money their family sends home, that is safer and cheaper.

It's not only for families. Businesses that buy goods from abroad can use it too. Crypto moves and changes the money with no extra costs for bank transfers and no exchange fees. So they save a lot and can run their business better.

**Basically,** A car dealer can go from TZS to crypto to yen, faster and a lot cheaper than through banks.

## A 10% edge for foreign investors

And then there are foreign investors, and this part is really interesting. When a foreign investor comes to Tanzania, everything is priced in TZS. If they bring their money in through the right exchange, they get 10% more.

They don't lose 5%, they gain 10%. So it's basically a 10% discount on the whole investment, just because they hold foreign currency. That alone could decide if someone invests in the region.

**Basically,** Bringing money in through crypto turns a 5% loss into a 10% gain on the whole investment.

## How the options compare for $100

Here is how the ways to send money compare, for $100.

![](https://emin.de/media/skip-the-banks-money-remittance-get-the-best-exchange-rate/01-b9518e2d.png)

| Method | Fees (%) | Rate loss (%) | Left of $100 | Time | Remarks |
|---|---|---|---|---|---|
| Currency Exchange | 15% | 5% | $80 | Immediate | Highest fees, bad rate |
| ATM Withdrawal | 10% | 4% | $86 | Immediate | High withdrawal fees |
| Remitly | 8% | 3% | $89 | 1 to 2 days | More expensive than TransferWise and Revolut |
| TransferWise | 5% | 2% | $93 | 1 to 2 days | Cheaper but no transfers to mobile money |
| Revolut | 5% | 2% | $93 | 1 to 2 days | Like TransferWise, limited options |
| NALA | 7% | 3% | $90 | Immediate | More expensive than Revolut and TransferWise |
| Western Union | 10% | 4% | $86 | 1 to 2 days | Very expensive, like an ATM |
| Moneygram | 10% | 4% | $86 | 1 to 2 days | Very expensive, like an ATM |

**Basically,** From $80 left at a currency exchange to $93 with TransferWise or Revolut, for every $100 sent.

## More than cheaper transfers

Cheaper transfers are only one part of it. It's about giving people and businesses in Sub-Saharan Africa the money tools they need. And it's about giving foreign investors a safe way to invest in the region and make money with it.

The lack of foreign currency still hurts the economies in Sub-Saharan Africa a lot. Crypto is a real way out of it.

**Basically,** The lack of foreign currency still hurts Sub-Saharan economies, and crypto is a real way out.