Kuda, Nigeria’s first neobank, is making a daring return to the remittance market with a disruptive twist: an internal multi-currency wallet.
After a shaky start three years ago, the digital bank has retooled its strategy to target Nigeria’s massive $20 billion-plus remittance market, a sector long dominated by giants like Western Union and rising stars like LemFi.
But is this a redemption arc for Kuda or a new playbook for African startups looking to disrupt the status quo?
Kuda’s Remittance Comeback: What’s Different This Time?
Kuda first tried its luck in cross-border remittances in 2022, relying heavily on intermediaries. The result? Slim margins and an eventual pivot away from the service.
Fast forward to 2025, and the neobank is back with a payback. Recent updates reveal that Kuda has processed a massive ₦14.3 trillion ($9.3 billion) in Q1 2025 across 300 million transactions, signalling robust growth.
This financial muscle has contributed to the relaunch of its remittance product, a multi-currency wallet built entirely in-house within the Kuda app.
This move eliminates third-party dependencies, promising faster, cheaper transfers for the Nigerian diaspora.
With over 35 million users and a positive net margin of 3% to 7%, Kuda is positioning itself to retain customers who relocate abroad while tapping into the lucrative remittance flow.
The wallet allows users outside Nigeria to send money directly to local bank accounts, a feature tailored to meet the needs of a growing expatriate base.
READ ALSO:What LemFi’s Pillar Acquisition Means for Your Remittance Options
The $20B+ Market: A Crowded Battlefield
Nigeria’s remittance market is a goldmine, with inflows exceeding $20 billion annually, driven by a diaspora of over 17 million Nigerians abroad.
Traditionally, Western Union and WorldRemit have held sway, but African fintechs like LemFi, Nala, and Moniepoint are shaking things up.
LemFi, for instance, has expanded into Egypt and acquired UK card issuer Pillar to strengthen its offerings, while Kuda’s in-house solution aims to cut costs and enhance user experience.
The competition is fierce, with startups betting on convenience, low fees, and multi-currency capabilities.
Kuda’s Q1 2025 performance, including $9.3 billion processed and ₦16.4 billion in profitable overdrafts, suggests it has the scale to compete.
But can it carve out a niche in a space where legacy players and innovative newcomers are vying for the same wallets?
Redemption Arc or New Playbook?
Kuda’s return could be seen as a redemption story. After shelving its initial remittance product due to unprofitable margins, the neobank has leveraged its app-first model and user base to rebuild a more sustainable offering.
The in-house wallet reflects a strategic pivot, less about chasing new markets and more about deepening value for existing users, many of whom continue using Kuda post-relocation.
This approach might also signal a broader playbook for African startups: invest in proprietary tech, prioritise user retention, and scale with data-driven insights.
By avoiding third-party costs, Kuda could offer competitive rates, challenging the high-fee models of traditional players.
READ ALSO:What Ripple and Chipper Cash’s Collaboration Means for African Remittances
Where Is African Tech Headed?
Kuda’s move is a tiny model of African tech’s evolution. The continent is witnessing a surge in homegrown innovation, from PAPSS’s currency conversion platform to Safaricom’s M-PESA partnerships.
Fintechs are no longer just copying Western models; they’re building infrastructure like multi-currency wallets and blockchain rails to address local pain points. With $1.35 billion in startup funding in H1 2025, the sector is stabilising.
The focus is shifting toward sustainable growth, compliance, and cross-border solutions. Kuda’s bet on in-house tech could inspire others to own their financial rails, reducing reliance on global giants.
Yet, success relies on navigating regulatory landscapes and maintaining profitability in a competitive arena.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, and digital finance at Africa Digest News.
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