USD INR ₹ 83.39
GBP INR ₹ 103.71
CAD INR ₹ 60.77

COVID’s Impact On Cross-Border Remittances And The Rise In Digital Payments

Updated on September 03, 2020 12:00 am
Digital payments

Sponsored by Xoom, a PayPal Service

Remittance inflows are the lifeline of many households and countries. In 2019, the World Bank estimated that $715 billion was sent by the global migrant community to their friends and families. 77% of that $715 billion was sent to low- and middle-income countries (LMICs) supporting over 800 million households, with India, Mexico, and the Philippines topping the list of highest remittance-receiving countries.

remittance inflows


Remittances play such an important role in the economic health of many countries. However, the World Bank predicts that we will see one of the sharpest declines of remittance flows in recent history, largely due to the economic crisis caused by the COVID-19 pandemic outbreak and lockdowns. The predicted decline will have an adverse effect on countries like Sri Lanka, Bangladesh, and Nepal among others that rely heavily on the remittances sent by their migrant workers. For example, close to 30% of the Gross Domestic Product (GDP) of Nepal's economy comes from remittances, which is higher than foreign direct investments.

remittance inflows

During the past few months, the international community of policymakers, governments and money transfer operators (MTOS) has worked intensively to evaluate the legacy issues plaguing the remittance industry and to formulate developments and responses to build a resilient global remittance market that works for all. 

Lockdowns that went into effect in cities across the globe as a result of COVID-19 brought significant limitations to the business of traditional forms of sending money, highlighting the issues people experience when using legacy remittance services, and the importance of digitalization. As a result, the remittance industry has reached an inflection point, as the migrant community increasingly turns to digital services to help them adapt to the changing payments landscape.  

Why should remittances go digital? 

  • Removes dependency on informal remittance channels: Digitization will help reduce reliance on cash-based remittance services that can often be unreliable.
  • Financial Inclusion: A technology-centric framework for remittance services that can help increase accessibility to financial services.
  • Cheaper cost of sending money: Eradicating the middleman, informal channels, and reducing commission will help bring the remittance costs down.
  • Safety amidst pandemic: Digitization of remittances helps enable consumers to send and receive money without needing to visit a physical money transfer location or bank, helping to mitigate the risk of catching COVID.

Online money transfer companies like Xoom serve as the bridge between the challenge and the solution. You can send money online from anywhere using the mobile app, without ever having to visit any physical store, and transactions can be sent quickly and securely at affordable rates.  

Why Xoom?

Xoom is PayPal's digital remittance service. Founded in 2001, it currently serves recipients to more than 160 countries. With Xoom, you can send money to your friends and family around the world from a mobile device or desktop. Here are the Top 3 reasons why you should use Xoom: 

  1. Exchange Rate: Xoom offers competitive exchange rates when compared to other remittance services in the industry. You can easily see the fee and exchange rate prior to sending money by using the Xoom fee and exchange rate calculator.
  2. Fees: Xoom allows you to see the fees upfront using their fee calculator before sending money. Although fees charged depend on the receive country, payment method, payout option, and the amount of money sent, Xoom offers competitive fees. For example, if you are sending $200 or more to a bank account in the Philippines and funding your transfer through your bank account or PayPal, there is no Xoom transaction fee.
  3. Speed: Everything happens at a lightning speed today and as users, you expect the same from service providers. Why should money transfer be any different? With Xoom, transfers can reach your recipient typically in minutes.*

*Limitations apply. 

Traditionally, the cross-border money transfer industry has been dominated by money transfer agents, banks, and post offices. More recently, propelled by the growth of the FinTech industry, it is now slowly moving towards an online model which is a more efficient, inexpensive, and convenient form of money transfer.

As a leading money transfer comparison platform, the most common question we get on CompareRemit is to identify the best way to send money internationally. The best depends on your needs such as recipient country, banking accessibility, the purpose of money transfer (routine vs. emergency) among others.

A few factors to keep in mind while sending money overseas are: Exchange rates, Fees, Speed of transfer, and of course, reviews. Find out what our verified customers are saying about Xoom and other money transfer service providers on our Reviews section

Rate article:
Money Transfer FAQ's
Related News
mexican peso
Mexico Achieves Record-Breaking Remittances of $5.7 Billion in May 2023

According to recent data released by the central bank, Mexico received an impressive sum of nearly $5.7 billion in remittances during the month of May, setting a new monthly record. However, analysts caution that the strength of the peso against the dollar may have mitigated this achievement.Since the majority of remittances to Mexico originate from the United States, the value is recorded in dollars. Goldman Sachs analyst Alberto Ramos explains that "a strong peso hurts remittances," referring to the fact that the appreciation of the Mexican currency has an adverse effect on the funds received when converted from dollars to pesos.Interestingly, the peso has emerged as one of the top-performing currencies this year, appreciating over 13% against the U.S. dollar between May 2022 and May of this year.Due to the peso's appreciation, when measured in local currency, remittances actually experienced a 2.2% decline compared to the previous year, as stated by Ramos.Mexican President Andres Manuel Lopez Obrador has consistently highlighted the positive impact of remittances on the country's economy. The funds, primarily originating from the United States, have played a significant role in Mexico's economic growth.In 2022, Mexico recorded a record high of $58.5 billion in remittances from abroad, making it the second-largest recipient country, trailing only behind India.Despite the challenges posed by the "super peso," the dollar value of remittances sent in May increased by nearly 11% compared to the previous year.The latest data for May reveals a substantial jump of almost 14% compared to the previous month, resulting in a total inflow of funds reaching $24.67 billion this year.Notably, this amount surpasses the combined revenue generated by oil and agricultural exports during the same period, as noted by analysts at Mexican brokerage Monex.Analysts at Monex and BBVA attribute part of the May surge to the celebration of Mother's Day, suggesting that around 10% of the increased transactions can be attributed to this commemoration.The number of transactions in May experienced a 7% year-on-year increase, reaching a total of 14.56 million. Furthermore, the average amount per transaction rose by 3% to $391.Goldman Sachs' Ramos emphasizes that the strength of remittances reflects the robust U.S. labor market and visible wage growth, particularly in sectors where Mexican citizens are prominently represented.To compare today's best rates when remitting money to Mexico, use CompareRemit's easy-to-use USD to MXN exchange rate comparison tool!

mexican dad with children sending money online using computer
CompareRemit Launches NEW Spanish Language Site

CompareRemit is thrilled to announce the launch of our NEW Spanish language website! Spanish speakers can now effortlessly navigate through the CompareRemit website to compare exchange rates, fees, and transfer time when looking to send money overseas using one of our trusted partners. Fully understand the offerings of online remittance companies and compare their services with ease while browsing our Spanish-translated site. In addition to making comparisons easier to navigate in Spanish, we have also launched a Spanish blog dedicated to money transfer guides and topics that will help Spanish speakers better understand how to send money online, how to use money transfer apps, reviews of the best remittance companies, and so much more. Plus, we don’t use Google translate for our Spanish-language supported website; our site is translated by native Spanish speakers to ensure that you are receiving accurate and helpful information. How to Navigate the New CompareRemit Spanish Language SiteStarting on the homepage, check out the current exchange rates for top remittance countries, including USD to MXN. These are the best available market exchange rates offered for the moment. You can also manually enter in how much money you are looking to send and to which country, which will redirect you to a new page detailing the company choices you have. You can compare exchange rates, transfer fees, transfer time, and coupons available from our trusted partners. If you are looking for more information on the best ways to send money overseas or tips and tricks when it comes to exchanging or transferring money, be sure to navigate to our blog section. Here, you’ll find detailed articles related to remittance to help make your money transfers easy and seamless. Find detailed money transfer guides, the latest news, and more! To see what offers our current partners have, check out our coupons page. Here, you’ll find the latest deals that our trusted remittance partners are offering. Typically, you’ll be able to get a special exchange rate for your first transfer, or money off your first transaction. Don’t miss these deals, because they don’t last long and help you save even more money when sending cash overseas. Lastly, if you have any questions or concerns while scrolling our site, head to our contact us page where you can send us a message. We will get back to you as soon as possible! We hope that our new Spanish website helps Spanish-speaking visitors to easily navigate the CompareRemit website. Use our website before sending any money overseas to get the best exchange rate, lowest transfer fee, and fastest turnaround time. Compare USD to MXN today!

US dollar chart rising
How the US Dollar is Getting Stronger Against the Indian Rupee

The Indian Rupee has closed at a 20-week low against the US dollar. Paired with the unexpected outcome of the US presidential election this past week, the main reasons for dragging the rupee down can be accredited to the strike on black money via demonetization of high-value currency notes and weak industrial output. The US currency, in turn, has strengthened based on speculations that the policies of the US President-elect Donald Trump would be inflationary and lead to a rise in the interest rates, thus impacting foreign money flow to emerging countries like India.Foreign investors withdrew over Rs. 2,350 crore from the stock markets as the US-backed assets are looking more attractive and as a result, the economy is expected to improve in the coming quarters.According to India ratings, the sudden decline in money supply and a simultaneous increase in bank deposits - due to withdrawal of 500 and 1000 rupee notes - will adversely impact consumption demand in the economy. This, coupled with the depreciation of real estate, construction and informal sectors, will further weaken the rupee in the upcoming months. It is very much possible in the upcoming months, as well as even forecasted by many agencies, that US Dollars will become stronger against Indian Rupees. All this means is that the spending power of the NRIs will increase, leading to a rise in the remittance flow to India.Compare. Save. Send Money Home Wisely.TODAY'S BEST RATE USD to INRAdditional ReadingHow will India's Currency Ban Affect NRIs in the USA?How India's currency ban of Rs. 500 & Rs.1000 will affect NRIs?How much Indian Rupees can one carry to India?

Download the CompareRemit App
Download the CompareRemit App
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.

Get Listed or Advertise

Download Our Free App

Try our faster, enhanced mobile app for a better experience

CompareRemit App