Digital Remittance
Fintech has caused positive disruptions in the financial world by bringing safer and quicker alternatives to traditional banking and financial services. Several sectors within the fintech industries have witnessed stellar advancements because of technologies like artificial intelligence, machine learning, data management, cloud computing, etc. One of these sectors is the remittance sector, which has recently undergone immense digitalization.
What is Digital Remittance?
Remittances are money transfers across international boundaries. The majority of money transfers are done for personal reasons, for example, people working outside of their home countries send money to their families. Such remittances have been a part of the global economy for many years.
In traditional methods, people wanting to remit money were required to go through some paperwork and wait in queues before successfully sending money overseas. The receiving party was required to visit banks and financial institutions providing these remittance services before converting the amount received into cash. Thus, the remittance process involved complicated paperwork was slower, and required both parties, the sender and the receiver, to visit the institution to complete the transaction.
Fintech has given rise to the digitization of the remittance market, unleashing a huge scope and countless possibilities for easy overseas money transfers. Sending money back home from another country using digital means and channels is a digital remittance. Digital remittances employ several media and channels for money transfer, the most popular one being mobile applications.
Digital remittance allows quicker, paperless transactions that are carried out anytime, anywhere.
The Digital Remittance Market
The digital remittance market crossed $17 billion in 2021 and has been estimated to grow with a CAGR of 15% between 2022 and 2030.
Migrant workers working outside of their home countries often send money back home. The digital facility of remitting has allowed them greater freedom and ease, prompting huge demand for streamlining and regulating the digital remittance market by governments and other regulatory bodies.
The digital remittance market crossed $17 billion in 2021 and has been estimated to grow with a CAGR of 15% between 2022 and 2030.
Some of the biggest digital remittance players in the market currently are:
Wise
InstaReM Pvt. Ltd.
Xe
PayPal Holdings, Inc.
Western Union Holdings, Inc.
WorldRemit Ltd.
Advantages of Digital Remittance
Digital remittance has proven advantageous for multiple reasons, some of which are:
Quicker Transactions
Digital remittance allows much faster turnovers and transactions compared to the traditional processes. Earlier, the sender and the receiver would be required to stand in long queues to complete the transaction, however, with digital services, all sub-processes involved in the success of the money transfers, use minimal time, allowing quick turnovers.
Lesser Fees
With fewer people involved and lesser paperwork, the transaction fee for digital remittances is much lesser compared to their traditional counterparts.
Secure Gateways
Sending digital money through digital payment gateways is much more secure and safer than cash transactions. Not only do these gateways allow security, but the sender and receiver can also track each activity associated with their transactions, save records online, etc., making them much more viable in today’s fast world.
No Time and Place Restrictions
When it comes to the time and place of transactions, there are no limitations in digital remittances, like all digital services. All the processes involved in the transaction take place online, allowing freedom of place and time.
The Future of the Digital Remittance Market
With the world rapidly inclining towards digitization, people have become more receptive to digital services than otherwise, opening doors to countless possibilities. Digital remittance is the outcome of such opportunities, which because of its viability, has become the choice for a large majority of the people availing of these services. Because of its growing demand and application, the digital remittance market is expected to completely take over the remittance market in another couple of years.
