The market dynamics of the remittance industry is changing fast, which was propelled by the COVID-19 crisis. As the world looks forward to normalcy with immunization, the digital transformation driven by the crisis is here to stay.
Democratization Through Mobile Technology
Affordable smartphones and digitization of money are the two biggest innovation that has shaped the way we move money around the globe. It has democratized international remittance services giving cheaper and convenient access to 272 million migrant population.
Tasks once handled by storefront money transfer agents, bulky computers are now being completed online, more securely, efficiently, and affordably on their fingertips.
The Rise in Digital Remittances
While the World Bank has urged nations and international communities to come together in solidarity to ensure that migrant communities do not fall through the cracks due to reduced remittances caused by job losses and a looming economic crisis, digital remittances defied projections and continued to grow.
Fueled by the contactless payment due to COVID19 protocols and lockdown measures, consumers were served by digital remittance service providers online. The growth is projected to continue because online money transfers are faster, cheaper, safer, and a much more convenient way of sending money internationally.
A recent study by Statista estimates that the transaction value of digital remittances is expected to touch USD 2,108 million by 2024 at an annual growth rate (CAGR 2020-2024) of 11.3%.
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Remitbee's Drones: A Flying Money Transfer
Although we have seen a significant rise in digital payments, cash remains the most popular method of sending money internationally today.
So how can we make contactless payments and still deliver cash? The answer is Drone.
Drone-based technology is poised to increase financial inclusion by reaching the unreached.
Lack of infrastructure is one of the major factors preventing Financial Institutes from reaching key regions and demographics. Drone-based technology can bridge the existing gap.
Remitbee, an online money transfer service provider expanded its services to physical cash transfers by way of aerial drones. The drones will cover remittance from Canada to 45 countries
The state of the art drones are solar-powered, equipped with lasers, and biometric security. Some of the other features include:
Although, there are many challenges that we will see unfold as the technology evolves. For now, it is an exciting innovation for the remittance industry and if it succeeds, it will change the industry as we know it.
Expanding Real-Time Push Payment: Visa Direct Partners With TransferGo
Real-time or near-real-time push payment technologies are going to help companies make and accept payments faster. It is not just the speed that is driving the adoption of real-time payments but convenience and cost, which will drive competitive advantage through better customer service.
Behind the popular peer-to-peer (P2P) payment apps such as Square, Venmo and Zelle is Visa Direct. Visa Direct is a real-time push payments platform by Visa. As of December 2019, Visa Direct saw transactions initiated in 90 countries and sent to 170 countries.
Visa Direct has recently partnered TransferGo. Currently serving 32 countries, this partnership allows TransferGo to expand its services to 178 markets through Visa Direct's network on a global level. Check out our reviews on TransferGo to see what our users are saying.
Visa Direct already has the big names in the cross-border payments such as TransferWise, Remitly, MoneyGram, PayPal, and TD Bank in their partnership program. The collaboration effort will further increase between banks, payment technology, and other FinTech companies to meet consumer demand for faster, better, and cheaper services.
RevoluPAY Partners With Thunes
RevoluPAY is a blockchain-powered digital banking solution that caters to the remittance industry. Thunes is a B2B cross-border payments network that is going to lay the foundation for RevoluPAY to move money. Their global platform connects mobile wallet operators, money transfer operators, and banks in more than 80 countries and 60 currencies.
Through the partnership with Thunes, RevoluPAY can offer remittance services at over 9,000 collection partner agencies in over 100 countries including high volume remittance markets like India, the Philippines, Pakistan, Nepal, and Bangladesh.
In a 2018 report on A Vision for the Future of Cross-border Payments' by McKinsey & Co, the critical drivers that were likely to propel the cross-border remittances were identified as below:
Currently, Xoom is one of the fastest ways of sending money, for popular corridors such as USD to INR and CAD to INR, the money transfer takes only a few hours. Domestic payments on the other hand are instantaneous and available 24/7, which is not true for most international payments.
As consumer demand evolves and we continue to see a proliferation of technologies through collaboration and innovation, players in the remittance industry have to catch up to offer a low-cost and instantaneous transfer.