Next Wave: Paga wants to be the Revolut for African immigrants, but what must it do to achieve success?

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The typical stand-alone remittance model is nearing obsolescence and now African fintechs must build services to remain competitive in a $100 billion market. Lemfi and now Paga are showing others what must be done.

For years, African fintechs saw processing cross-border transfers as an easy way to earn in dollars amid volatile African currencies, but the remittance gold rush has a catch: FX transfer margins have shrunk by about 30% in the past six years as more players flood the space, competing on speed, price, and reliability. As FX margins eroded, remittance startups had to move beyond transfers.

When Lemfi acquired Pillar three months ago to offer credit to immigrants, I wrote that the acquisition—a high-margin solution to a large problem—marked the next step in African remittances, but I also acknowledged that the future lays in an African fintech delivering a multi-product, multi-market financial services platform.

Paga now appears to be creating that future. The company recently launched its U.S. subsidiary, allowing African immigrants with a U.S. address to open and manage Regent Bank accounts directly through Paga. With this move, Paga becomes the first African fintech to offer a full-fledged U.S.-based digital bank account for African immigrants. The goal is to move from one-off use to becoming a customer’s main financial partner.

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