(CNN) -- Remittances sent from abroad are a lifeline for millions in Africa, and now online services are aiming to make it quicker and easier to transfer money to the continent.
According to the World Bank and the African Development Bank, members of the African Diaspora send home around $40 billion every year. But the actual figure is likely to be significantly higher as a large proportion of funds are transferred through various informal channels.
Now, Ismail Ahmed, founder and chief executive of WorldRemit, says he's found a way to make the whole process easier, while helping Africa minimize its dependence on cash.
His service allows users to send money to family and friends without having to visit agents and collect cash from their bank accounts. They can process transactions online, while funds are immediately available for collection in Africa, or credited to mobile accounts of recipients.
Speaking to CNN's Nima Elbagir, Ahmed said: "We are helping to move towards cashless economies in many parts of Africa."
An edited version of the interview follows.
CNN: The use of mobile phones to transfer funds is not new -- it's something that's been growing hugely in Africa. But what is new is the degree to which you've managed to refine the compliance.
Ismail Ahmed: That's true, because regulators in the West are still concerned in the fact that people can carry their money on a mobile. So what we've done is we've built a robust compliance system which does more than what is required to screen both the senders and the recipients. And this meets the regulator requirements, in particular in Europe and North America.
CNN: Because one of the main issues with the transfer of money has always been, and definitely with Islamic names, you get a lot of false positives, a lot of alarm bells ringing in the system, because there's a similarity with a name that's on a terrorist watch list.
IA: In the case of Arabic, Muslim names, we get something like up to a 40% false match.
Just to give you an example, I share both my names with the former spiritual leader of Hamas. My name is Ismail Ahmed, his name is Ahmed Ismail. So every time I use a money-transfer service, including mine, the screening software comes up with a 100% match.
But imagine someone who lives in a small village in Africa, who shares all of his names with someone on the sanction list -- that is much harder to prove that the person is not the terrorist.
CNN: And given how dependent many African economies are on money being sent back home from the diaspora, things like these might sound like small irritations but they have a huge impact on the economy.
IA: Remittances are lifelines for most of the economies in Africa, particularly east and southern Africa. So yes, we're talking about something where some places like the Horn of Africa, up to 40% of houses rely exclusively on remittances for their livelihoods.
And some of the transfers are for urgent reasons -- somebody is ill or going to hospital, for school fees, so even a small delay could be critical.
CNN: It's interesting that in Africa, the way that the technological market has worked is that mobile phones completely circumvented the need for landlines, and it almost seems, with your system, you're circumventing the need to have local bank branches around the continent.
IA: That is true, and we are helping to move towards cashless economies in many parts of Africa. Africa is leapfrogging and moving closer to a cashless society.
In Kenya you have 13 million Kenyans who use the local money-transfer service. In Somaliland the local mobile operator introduced local domestic money-transfer services a year ago. Now, 90% of local transactions are conducted through online, so Somaliland is becoming literally a cashless society.
So we're helping from this end and saying, if people can do that in Africa, why would a migrant who's working need to travel one or two hours to send cash?