Remittance refers to transfer of money by foreign migrants to family members back in their home country. It boosts countries Balance of payment and therefore their credit rating. It lowers borrowing cost of government and households and is a source of foreign currency in a current account of a country. Remittance market depends on various factors such as migration policy, economic healwind etc. Remittance has increased due to increase in number of clients working overseas. Various channels involved in transfer of remittance are banks, mobile network operators, money transfer operators and so on. Global remittance market size was valued at $682.60 billion in 2018 and is projected to reach $930.44 billion by 2026, growing at a CAGR of 3.9% during the forecast period 2019-2026.
Global remittance market is segmented based on type, channel, application, end user and region:
- Based on type, the remittance market is segmented on the basis of inward and outward remittance
- Based on channel, the remittance market is segmented on the basis of banks, money transfer operators and others.
- Based on application, the remittance market is segmented on the basis of consumption, savings and investment.
- Based on end user, the remittance market is segmented on the basis of business and personals.
- Based on geographical segmentation, the global remittance market is studied among South Asia/South East Asia (Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, India, Sri Lanka, Indonesia, Vietnam, Thailand, Singapore, Malaysia, Philippines, Cambodia, Myanmar And Rest Of South Africa), MENA (Saudi Arabia, Kuwait, UAE, Bahrain, Qatar, Oman, Egypt and Rest of MENA) and rest of the world.
Dynamics of the Global Remittance Market
The global remittance market has seen a dramatic growth due to surge in international migrant population. Other factors such as reduction of remittance cost and transfer service time and increase in adoption of banking and financial services propel the remittance market growth. In addition, banks are rapidly adopting digital innovation and shifting towards digitized cross border money transfer services proved to be efficient for the remittance market. Whereas, lack of awareness and decline in growth of remittance industry in Asia-Pacific countries has an adverse impact on the growth of the overall market. High bandwidth internet connectivity and mobile penetration along with technological advancements bring lucrative opportunities for the remittance market in coming years.
Major Players covered in Global Remittance Market Research Study
Bank of America, Citi group Inc., JPMorgan chase and co., MoneyGram International Inc., RIA Financial services ltd., Transfer wise ltd., UAE Exchange, Wells Fargo, Western Union holding Inc. and Xoom are some major players included in the research study of the global remittance Market.
Snapshot of Investments in the Global Remittance Market
InstaRem, the consumer and SME arm of global financial technology platform NIUM, announced the launch of cash payout option for recipient in Philippines. NIUM has also announced the launch of banking as a service platform which allows to create small financial infrastructure to issue cards, transfer money etc. all in single unified stack. Hubpay launched its digital wallet in the Middle East region. Hubpay will address remittance market and money market via its wallet. They are in advanced stage of the licensing process to receive money service license in United Arab Emirates market. It will enable low cost digital remittance and international bill payment. Paypal invested $890 million and acquired Xoom in 2015. They are following the footsteps of their acquirer to provide money transfer services to its customers.
Impact of Coronavirus on the Global Remittance Market
Novel Coronavirus pandemic impacted the entire world’s economy. Disruption caused by Coronavirus have a significant impact on the remittance market as well. Remittance side of a country is contracting due to stalling of economic activities. Reverse migration and cut down of jobs are also impacting the remittance market. In a recent report published by the World Bank, remittance is expected to fall by approx. 23% in 2020 to $64 billion in India. Also, according to World Travel and Tourism Council, Coronavirus may slash 50 million jobs worldwide in the travel and tourism industry reflecting a 12 to 14% reduction in jobs. Moreover, due to prevailing lockdown across all over the globe, traditional cash transfer fell but digital transfer has shown a jump worldwide.
Earlier, growth rate of the global remittance market was sagging due to expensive task, exemplified by non-ending chain of middleman. But now-a-days, the global remittance market growth rate is increasing due to availability of fast and value-added foreign money transfer services. Availability of high bandwidth internet connection and bank services take global remittance market growth to a new height. Recently outbreak of Coronavirus has an adverse impact on this market globally. This leads to fall in traditional cash flow across the globe but it shows a jump in digital transfer of money.
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