Freelancers in a fix as Wise freezes transfers

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Creatives and freelancers in Nigeria are struggling to find options to receive payments for the work done for their foreign clients as another international money transfer operator has suspended dollar transfers.

Wise, formerly TransferWise, is the latest IMTO to announce it has suspended dollar transfers to customers from Nigeria. A spokesperson for the company told BusinessDay via email that it has already informed its clients of the development.

“Unfortunately, we’re no longer able to support USD transfers to Nigeria. We’re doing this because we’re currently not able to offer our customers the service they’d expect from us. We’re very sorry about the inconvenience caused and are working hard to bring back USD transfers to Nigeria,” the spokesperson said.

The suspension kicks off on November 1, but some freelancers say they are already seeing restrictions on their transactions.

This is the second time Wise is suspending transfers. For each of the occasions, Nigeria’s exchange rate crisis preceded the decision. The first suspension was due to local regulations, according to the company.

This time, a combination of regulations and partner issues may be making the Nigerian route too expensive to maintain for the operator, according to some experts. The suspension affects all categories of clients in Nigeria.

“How do I even receive funds from folks in the diaspora if CBN keeps cutting every solution off?” said Dave Anierobi, a freelancer.

Anierobi told BusinessDay that there are many Nigerians that the suspension will affect.

Wise’s spokesperson said the company doesn’t share data on consumers.

Adewale Adetugbo, a fintech expert, said the suspension will affect mostly people that need formal methods to make and receive overseas payments. Beyond freelancers are Nigerian creatives, many workers in the tech ecosystem, and Nigerians living in the United Kingdom.

In a bid to curb foreign exchange shortage and the weakening of the naira, the Central Bank of Nigeria has been mopping up dollars in the market. In 2021, the apex stopped dollar sales to Bureau De Change operators and mandated commercial banks to set up teller points in designated branches for the sale of forex.

The banks, however, are not living up to expectations, leaving a huge gap for the black market to fill. In recent times, many financial institutions have announced caps on access to dollars through local debit cards.

Read also: Fintech holds key to Africa’s economic prosperity, Nigeria must continue to lead the way

Fintech companies, which provided alternative solutions, have also balked under the pressure.

Flutterwave, one of the companies, announced the suspension of its virtual card service, Barter card, due to what it described as “an update from our card partner, which will cause the card service to be unavailable for an extended period of time.”

Chipper Cash has also decided not to provide dollar virtual cards to its new customers.

According to Anierobi, there are still alternatives like Geegpay and Grey.

“With Grey USD accounts, a client from the US still can’t send funds to me,” he said.

Cryptocurrency exchanges like Binance have also attracted Nigerian freelancers looking for options. But Anierobi described it as ineffective because of the instability of the market. Also, crypto requires many off-ramps to finally get to the desired currency in Nigeria – dollar to BTC to naira.

Another alternative could be incorporating a business in the UK. After the incorporation, the owner can open a business account in the name of the business, then request for bank details like USD, EUR, and GBP, plus the Wise debit card. Wise used to be able to ship to the UK, European Union, and Asia-Pacific.

Adedeji Olowe, founder of Lendsqr, said freelancers can also consider Lemonade Finance, a digital bank that enables Africans abroad to send and receive money within minutes. “However conversion rates can be high as the platform often measures this by the parallel market rates,” he said.

Anierobi, who has used the platform in the past, said Lemonade cut off Nigeria “a long time ago”. BusinessDay is yet to verify this from the company.

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