According to the World Bank, the average cost of sending remittances to Africa is 7%, and the cost of making a wire or card transfer into Africa is roughly 4%. With Africa’s greater rate of importation, demand for foreign currency is always high, which in many cases is not always easy to get by.
The problem needing a solution led to the establishment of 4Traderx which following the initiative of its Nigerian founder, Micheal Ajayi has been selling financial options that is drastically reducing these costs.
The fintech industry veteran believes that Africans in the diaspora have a role to play in the development of the motherland, Africa, and remittance is the basic tools they can use. Holding the perception that it should not only benefit their beneficiaries but the economy at large.
“We are building a new model of remittance that helps users set their exchange rates. If you want to exchange your money, you should set your rate,” said Ajayi in an interview with Oral Ofori of the TheAfricanDream.net.
Michael Ajayi has a Bachelor in Business Technology from the North Carolina Agricultural & Technical State University in Greensboro, NC, United States. He has worked with companies like International Games Technology LLC, Toshiba, and Walmart. He is the founder & CEO of Colevate Inc., a crowdfunding platform where university students in Africa can raise tuition funds.
According to Ajayi, the motivation for the creation of 4Traderx was to establish a profitable way to encourage Africans in the diaspora to send more money back home and to make remittances to Africa more reasonable without bothering about exchange rates, which can be a deterrent at times.
“The remittance and payment fee to Africa is around 5-7%, and we want to reduce it to at most 2%, our hope is to match most Western countries’ rates by 2025,” he said to TheAfricanDream.net.
“We partnered with a fintech-friendly bank and money transmitters to make this possible. These partnerships make it possible to bring these excellent services to our customers and take away the intermediaries, making remittance and payment affordable” he added.
The firm overtime has gone ahead to raise significant capital from notable US investors, after earning its full license to operate in the United States.
In February 2022, Tekedia Capital publicly announced its investment in the fintech company, noting that it was “the first firm which invested in it,” following the company’s appealing status in two years of establishment, according to a publication by Ndubuisi Ekekwe, Lead Faculty in Tekedia Mini-MBA.
Established in 2020, 4Traderx as a US-based, financial technology company holds a reputation as the first peer-to-peer currency exchange for Africa’s traders and travelers.
“Most remittance companies set the exchange rates for customers, but we allow users to set their exchange rates,” said Ajayi to TheAfricanDream.net explaining the peculiarity exclusive to the company.
“Our customers’ family members in Nigeria don’t have to drive to the bank to get USD; they get naira in their account. Currently, no remittance company can send naira to Nigeria, but we can send naira and dollars to Nigeria because of our model,” he added explaining that they allow users to exchange currencies with other users, noting particularly that their “fees are the lowest in the industry.”
“The hardest moment in recent times has been being rejected by someone I believe would have been a help (because they have the license we needed) in making this dream come true,” said Ajayi to TheAfricanDream.net speaking on difficult moments in his journey that almost made him give up.
“At that point, I felt it was over, and I needed to look for another job because this business idea was just like any other idea that would not succeed. After two weeks of being discouraged and demoralized, I asked myself, why can’t I get my license if he has the license? So in the pursuit of getting the license, I realized that I didn’t need to have the license. I can partner with someone with the license and work with them, which I did,” he added.
The fintech veteran’s idea of life has always been “that things can change if we apply the proper pressure to it,” encouraging himself with immense determination and courage to get things done.
When asked about his plan for this year and the future, he mentioned “this year we plan to grow and expand into other African and European countries. We also plan to add other financial services to our platform and serve more customers in Africa and outside Africa.”
Still unclear how the platform works?
Take this scenario for an example:
Miss Eve has $1000 that she wants to convert to naira for family support in Nigeria. Mr. Adam is an electronic device importer in Abia State Nigeria, he has #575,000 and needs $1000.
Miss Eve creates an ask on the platform stating how much dollars she has ($1000), and at what exchange rate she desires (#575). Mr. Adam sees the ask, agrees to the exchange rate and gets the dollars from her, while she gets his naira (575,000).
Miss Eve can now send that naira to at least four family members in Nigeria, while Mr. Adam can now transfer the dollars to his dollar account in Nigeria.
Everything happens over the company’s platform at the convenience of where both parties are.
The company also has an interactive mobile app that makes transactions more convenient. In a tweet from the company’s official account, the firm highlighted various uses of the app:
You can get access to their frequently asked questions (FAQ) here for indepth information about the company.
Contact 4Traderx on this number +1-919-857-7648 or send a mail via firstname.lastname@example.org.
Source: Arakunrin Lekan | TheAfricanDream.net