Market Outlook for Remittances through 2030
The global remittance industry was valued at $701.93 billion in 2020, and is expected to grow at a CAGR of 5.7 percent from 2021 to 2030, reaching $1,227.22 billion by 2030. Remittance is the act of a foreign migrant sending money across a border to another individual via electronic payments, draughts, and checks. Furthermore, the bulk of remittance service providers are focused on digital remittance to grow their business and give customers with more convenient and faster transfer services. The numerous advantages of using digital channels for sending money, such as fast speed, 24 hour availability of digital channels, transparency, convenience of use, high security, and others, present numerous prospects for the remittance sector.
Overview of the Global Digital Remittance Market
Digital transformation is critical in this case because it enables for the development of new and better products and services while also regulating and lowering operational costs. Professionals with experience building technology are assisting the BFSI sector’s future dynamics. As remittances are regarded one of the sector’s most essential assets, digital remittance is one of the primary reasons encouraging its growth. This is due to the fact that as the BFSI business expands, so does the Digital Remittance Market. As of January 2021, there were over 4.80 billion internet users worldwide, accounting for nearly 59.5 percent of the global population.
A world without the internet is unthinkable nowadays. The internet is a crucial foundation of the sophisticated information society, connecting billions of people globally. The global internet penetration rate is roughly 59.5 percent, with Northern Europe leading the way with a population internet penetration rate of 96 percent. The digital remittance sector has enormous development potential as a result of the rise in internet usage. This is because all-digital remittances allow you to send money from anywhere in the world using any device with dependable internet access. It requires a smartphone, tablet, or PC with an online web browser or app. As a result of the growing worldwide internet usage, the market has a variety of prospects.
Financial crimes such as money laundering and terrorist funding, on the other hand, pose a security risk to the remittance sector, and all of these actions have negative consequences. The execution of these operations tarnishes firms’ reputations and encourages them to fall behind their competitors. As a result, these realities may hinder the digital remittance market’s growth.
Insights about Type
In 2021, the outward digital remittance sector dominated the market, accounting for more than 55.0 percent of worldwide revenue. People who live in other nations donate money to their families in their native countries. Financial organisations and banks are assisting these individuals in sending money back to their families in a timely and secure manner. International banks and financial institutions are concentrating their efforts on lowering fees and expanding their customer base. International outward remittances are processed through a secure banking network, which reduces the risk of financial loss and fraud for both the sender and the recipient.
Over the projected period, the inbound digital remittance market is expected to develop at the fastest rate. Over the projection period, the category is expected to rise due to the increasing acceptance of mobile payment technologies for money transfer among migrants. To take advantage of the Immediate Payment Service, a number of financial institutions and banks throughout the world are focused on implementing real-time banking technology (IMPS). Furthermore, banks can use this technology to provide services to both non-resident and resident consumers. For inward remittances, migrant workers are focused on wire transfer services, which are regarded the safest, fastest, and most popular ways of financial transfer.
Insights from the Channel
In 2021, the money transfer operators sector dominated the market, accounting for about 40.0 percent of global revenue. Money transfer companies can frequently offer lower transfer costs than banks. Furthermore, these money transfer firms provide the same level of trust and security as banks. One of the major advantages offered by money transfer companies is the quickness with which money is transferred. Money transfers can be started right away and completed in a day or two. Over the forecast period, the segment is likely to be driven by the advent of digital-first money transfer operators and the quick adoption of funding and digital initiation capabilities from incumbent money transfer operators.
Over the projected period, the online platforms segment is expected to develop at the fastest rate. Online money transfer platforms efficiently manage payments transfers between businesses and between businesses and their clients. These platforms give customers direct access to money transactions and make the fund transfer process more convenient. Several online money transfer platforms are focusing on providing their customers with user-friendly services. These systems make it simple for clients to traverse their websites. In addition, the growing use of digital wallets is likely to boost the segment’s growth. Customers who use digital wallets can track their funds through their digital wallet application.
Insights into End-Use
In 2021, the personal segment dominated the market, accounting for more over 40.0 percent of global sales. New goods and services are being widely created to make the use of financial client accounts more convenient. Furthermore, rising worldwide movement is projected to encourage personnel to use digital remittance services to transfer money back home. Over the projected period, the personal segment is expected to rise due to rising smartphone and internet usage around the world. Innovative remittance solutions are already changing the market by boosting ease and lowering costs for remittance senders and their families.