According to a report from Juniper Research, international digital remittances will reach $525 billion by 2024, up from an estimated $332 in 2019. This accounts for 41% of international digital money transfers by volume in 2024, up from 33% in 2019. The data here is a clear evidence of how the popularity of cross-country money transfer is growing manifold with the movement of people across the world.
International cross-border payments are also directly affecting a number of other industry trends that will eventually change the market scenario. This includes the emerging technologies like Digital Ledger Technology, changing regulatory and sanctions frameworks, prominence of international commerce, and evolving customer demands. Major enterprises like Alibaba and Amazon are also increasing the competition for the incumbents.
As we are about to end this decade, let’s talk about some trends which are expected to rule the remittance market and govern how the industry evolves 2020 and beyond:
Developing as one of the preferred ways for wired money transfer, Blockchains are coming of ages. Solutions like IBM Blockchain World Wire and RippleNet will be increasingly used to simplify cross-border payments. Blockchains have also established a name when it comes to security of money transfer. Apart from being secured, Blockchain based payments ensure faster processing, no restriction on payment size and lower transaction cost.
Traditional players of the money transfer market will have a hard time catching up if they do not reinvent their operational strategy. Fintech players like WorldRemit have made a name in money remittances due to their digital mode of operation. Established players on the other hand are moving their focus towards developing a digital domain.
Customer Choice will Shape Services
According to a research by McKinsey, the customers today value services like reliable modes of payments, access to preferred payments methods, and the ability to track exchange rates and schedule payments based on this info. Transparency and real-time execution along with audit protocols and transaction recall rights, while also meeting customer expectations. The need for choice differentiates today’s landscape. Single payment option is a passé as the customers like to have options of various modes of payments and costs.
For remittances to function smoothly there is a need for Anti-Money Laundering (AML) compliance and an effective Remittance Service Provider (RSP) to handle international payments and manage regulatory compliances. Talking about the African subcontinent, the East African region lead the pack with largest users of international remittance through mobile payments.
When it comes to international remittance, only future proof methods are expected to survive the tide. Panamax offers a remittance solution that provides both international and domestic payments through a cashless model.