Every year, the African fintech space seems to focus on one particular type of product. This could be because of government regulatory shifts or because one leading company in that industry does something that gets everyone's attention.

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Some ride on this wave and build great products. However, it's always difficult to beat the first or second mover because they've built moats that make them untouchable. But riding this wave can help you build a great product that delivers value to customers, creates employment, and generates revenue for your company and returns for your investors.

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In 2025, the focus is shifting towards cross-border and remittance products. 

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While there are already market leaders like Lemfi, Nala, Revolut, Send, Leatherback, etc., if you're still thinking of throwing your hat in the arena, this blog post is for you. 

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If you've already onboarded a remittance API and you're thinking of switching, you'll also benefit from the details we'll share on how to select an API provider for your remittance product.

Define your requirements

1. Identify target markets and corridors

The target market for remittance products is usually people who are abroad and want to send money home. 

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While this is clear as day, you should still thoroughly analyse and assess the different corridors, regulatory puzzles to solve, players in the market, how they're approaching the market, and the gaps they're missing. Or are there any opportunities you can take advantage of? Should you build for a broad market or a niche market?

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Prioritise corridors based on market research and potential volume. For example, UK-Nigeria, US-Ghana, and France-Senegal might be your primary focus. 

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Answering these questions will give you a fair idea of what to build, the regulatory implications and the resources you'll need.

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2. Outline essential functionalities

Here, you can start mapping out the important features for the market and potential customers and which type of APIs will support different mechanisms. 

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A good practice is to create a categorised feature list distinguishing between "must-have" and "nice-to-have" features. All of this is directed toward building your MVP.

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Remittance is, simplistically, sending money in one currency, converting it to another currency and then sending it to the recipient's bank. Between these two seemingly simple motions are layers of complexities like KYC/AML, identity verification, refunds, and the hundreds of API handshakes in the background. 

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So, figure out the API endpoints you'll need to build these functionalities.

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3. Document compliance requirements

Building remittance products means interacting with regulatory and compliance bodies in different countries and figuring out licensing needs. Each regulator has different objectives, requirements, and approaches to doing things.

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So, map out the regulatory landscape of the target market you're going to and engage. Our Compliance and Regulation 101 guide covered market-by-market regulatory blueprints, regulatory compliance mistakes and how to avoid them, and cross-border compliance strategy in Africa. Check it out.

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In addition, create a checklist of all the compliance needs including KYC/AML requirements, sanctions screening, and transaction monitoring needs. Also, define transaction limits and reporting thresholds required by different regulatory bodies.

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Lastly, figure out the data residency and protection requirements specific to each market (e.g., GDPR in Europe, POPIA in South Africa and NDPR in Nigeria).

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4. Evaluate existing technical capabilities

The goal is to assess your current technology stack to help inform your API selection decisions for your product or to prepare to bring in more experts to bridge the skill gaps.

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Document your complete technology stack, including systems, languages, and integration patterns, to identify potential compatibility issues. Also, evaluate your development team's expertise with the necessary APIs, authentication methods, and financial protocols. Another thing to assess is your security infrastructure, focusing on encryption capabilities and fraud detection systems. Remittance products involve transactions between two countries, so the risk of fraud from external and internal actors increases.

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Also, figure out if your infrastructure can take the necessary load you'll put on the system. Prepare for it and ensure you have the frameworks and sandbox environments for proper integration testing. For instance, at Kora, we provide businesses with sandbox environments to test integrations before tinkering with live APIs.

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Finally, review your data management practices, evaluating storage capacity, migration capabilities, and transformation needs for working with new API formats. If you're a new startup with no existing technical capabilities, this process will help identify the technical capabilities to build and develop your remittance product.

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The requirements you’ll need to define will depend on the nuances of your company and the market you’re trying to enter. But these four are a good starting point. 

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What should you look out for when picking APIs for your remittance product

1. Competitive exchange rates and charges

Currency conversion is at the core of remittance products. So, the right API should provide you with accurate, real-time currency conversion for the currencies of the corridors you're playing in. The rates should also be competitive to give you decent margins.

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Remittance API providers employ various fee models that directly impact your margins and customer pricing. Some charge flat fees per transaction; others use percentage-based models that scale with transaction values.

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Before integration, request comprehensive documentation of all possible charges. Look specifically for hidden costs like currency conversion markups or settlement charges that might not be immediately obvious. A reputable remittance API provider will disclose their complete fee structure.

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Currency fluctuations can greatly impact remittance products and fund conversion. This can also affect your ability to make long-term projections and plans. So, prioritise APIs that have ways of reducing the impact of fluctuations. 

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2. Compliance and regulation

Governments, regulators, and financial bodies are usually more careful with cross-border transactions and remittances. That’s because they can directly influence the growth of entrepreneurship and a country's economy. 

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In addition, since you’ll be transacting across borders and in two different currencies, you’ll have to deal with at least two regulatory bodies. The number of regulators you’ll deal with will increase if you’re across multiple markets. 

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With this in mind, compliance is a factor when selecting API providers. Do due diligence and make sure your providers are licensed to provide the services they offer, especially in Africa. One good way is to check if they have a compliance page where they list out all their certifications and licenses. 

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KYC and AML frameworks

Check if the provider has proper KYC and AML frameworks to help you maintain compliance. KYC and AML requirements differ across countries, so make sure the provider covers these nuances before onboarding.  

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It’s also important to check how they handle transaction monitoring in corridors with higher risk profiles and what measures they've implemented to prevent fraud.

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The most effective remittance API providers demonstrate compliance through certifications and adaptable solutions that work within local contexts while still meeting international standards. 

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Insufficient compliance capabilities can expose your business to regulatory penalties, but overly rigid systems can block legitimate transactions and harm customer experience—the ideal provider effectively balances these considerations.

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3. Great security framework

Remittance companies–just like any fintech–are vulnerable to security and data breaches. And these can be very costly. So, all your integrations need to be airtight and secure.

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Your API provider's security capabilities will directly impact your risk exposure and customer trust. 

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When evaluating remittance API providers, prioritise these critical security features:

• End-to-end encryption
  Ensure the provider has strong encryption protocols for data in transit and at rest. This protects sensitive customer information and transaction details throughout the entire payment process.
  
  
• Advanced fraud detection
  Look for providers with real-time transaction monitoring systems that can detect unusual patterns. The most sophisticated systems use machine learning algorithms to identify potentially fraudulent transactions while minimising errors–like false positives–that flag legitimate transactions.
   
• Multi-Factor Authentication
  This should be standard for providers. 

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Multi-factor authentication should protect your dashboard and critical transaction points. For example, at Kora, merchants can set multifactor authentication in addition to a strong password. 

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• Comprehensive access controls
  Features like team permissions and IP whitelisting are crucial for controlling who can access your remittance systems. Your provider should have this. Also, prioritise providers that allow you to create role-based access controls for your team members with different permission levels.
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4. Multiple payment channel options for customers

Users of remittance apps love it when the recipients they send money to can receive money using their local payment methods. Payment methods differ by country. Bank transfers dominate Nigeria, and MoMo is more common in Kenya, Tanzania, and Ghana.

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Your provider should support multiple payment methods to help create a smooth customer payment experience. For example, say you want to onboard customers who are transacting in the US-Kenya corridor and bank transfer is the only channel you provide, you might experience low adoption rates. 

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That’s because the recipients will most likely prefer MoMo. Prioritise providers who support multiple channels for recipients to receive money.

5. Great user experience and ease of integration

When selecting a remittance API, consider both the operational experience and your customers' experience. The ease of use and reliability you experience will directly impact your end customers' satisfaction with your remittance product. Reliability matters; for instance, a provider with frequent downtime will significantly slow your transaction times.

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While downtime might be inevitable, providers should have built-in redundancies for unexpected situations. 

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Another important thing to consider is the quality of their API documentation and ease of integration, which directly impact your time-to-market and service. To know good API documentation, add your software engineers to the evaluation process so they can assess the following:

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• Documentation quality: Clear, comprehensive documentation with code examples of different scenarios
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• Authentication implementation: Straightforward authentication methods with proper security protocols
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• Error handling: Detailed error messages that provide actionable troubleshooting guidance

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6. Scalability and reliability

Don’t choose an infrastructure based on your current needs; consider an infrastructure that can handle increasing future growth or expansion without performance degradation. It’s also important to consider customer and technical support. 

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No infrastructure is infallible, but what makes the best providers shine is how they handle customer and technical support. Consider providers who have quick response times and clear communication channels. 

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Some key performance indicators for evaluating a remittance API

Beyond transaction volume, savvy product managers and software engineers track several metrics to measure API performance:

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• Error rates: The percentage of failed transactions and the specific error types
• Response times: Average and peak response times for different transaction types
• Uptime percentage: Both scheduled and unscheduled downtime
• Integration effort: Developer hours required for integration and maintenance
• Customer resolution Time: How quickly issues reported by customers can be resolved
• Cost per transaction: The API's total cost is divided by transaction volume
• Conversion rate: The percentage of initiated transactions that complete successfully

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Conclusion

Selecting the right API provider is a strategic decision that directly impacts a remittance company's ability to thrive in the African market. 

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Prioritise robust compliance capabilities, support for local payment methods, reliable infrastructure, stringent security measures, and transparent pricing, companies can establish partnerships that address the unique challenges of operating in Africa.

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At Kora, our goal is to connect Africa to the world and connect the world to Africa via payments.
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