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Predicting Global Money Transfer Trends for 2020

Updated on January 08, 2020 12:06 pm
Money Transfer Trends in 2020

The global money transfer market has gone through unprecedented change powered by remarkable financial technologies. In the early stage of digitalization, the banking sector used information technology to perform basic functions such as customer service, auditing, book-keeping, etc. which continued in the form of core banking system. In recent years, we can see the advanced innovation in infrastructure that has largely been characterized by peer-to-peer lending, big data analytics, open API models, and cloud computing.

In 2019, the industry had witnessed rising concerns over data privacy, adoption of blockchain technology, and increasing acceptance of cryptocurrencies as the new money for international transfers, not to forget an increase in peer-to-peer money transfer companies.

Based on how we have been closely following past trends, here are our top predictions for the global money transfer industry for 2020:

  • Upward Movement
  • One of the most promising trends in 2020 is the continuous growth that the remittance industry will be experiencing. The upward trajectory that started in 2016 with a consistent 7.8% average reached a record high to reach $528 billion in 2018, a 10.8% increase.

    India is expected continue retaining its top position with remittances expected over $87 billion in 2020, followed by China and Mexico

  • Cryptocurrencies
  • The rising interest in cryptocurrency for international money transfer has been the common theme in most of the conferences and think tank proceedings. Follow us on Twitter for live coverage on similar discussions.

    IBM conducted a survey of 200 banks in 16 countries titled, Leading the pack in blockchain banking: Trailblazers set the pace. The study concluded that almost 70% of the banks believed that Blockchain would positively impact the three critical elements related to international payments that are time, cost and risk.

    As the popularity of cryptocurrency-based payment methods grew in developing countries like in South America and Africa (Venezuela, Argentina, Brazil, etc.), it is likely that many developing nations around the world will follow suit. If the traditional money transfer providers can't keep up with the emerging innovation, blockchain payments and cryptocurrencies will hold as mega key players in the remittance industry. For more on Bitcoins, CompareRemit has a detailed report.

  • More regulations for Big Tech in finance
  • With the recent testimony that Mark Zuckerburg, CEO of Facebook had to do before Congress, it has been established that privacy is a huge concern. There is a primary focus on how the users, governments, regulators, and consumer rights groups see big tech. The rising concern over privacy, data manipulation, and ethical monetization has called for stricter laws and regulations. Owing to the concern, any new moves by the global technology companies could be held back because of the fear of interference in governance like the 2016 presidential election and compromising the rights and freedoms of the customers.

    Big tech like Apple and Google are already in the payment space, which is inevitable but a big worry nonetheless for the regulators. More regulations are likely when it comes to big tech companies venturing into global money transfers and payments.

  • Greater financial inclusion
  • Mobile apps are indispensable in this digital age. Mobile has helped achieve great lengths in terms of financial inclusion, especially in developing countries. The majority of the money transfer companies have developed their own apps for the convenience of their customers. Since there are so many apps that function separately as a digital wallet or as a payment app or as a money transfer app, there could be re-bundling of all these functions into one app called the "Super App".

    Super Apps are umbrella apps bundling together many apps offering multiple services within from city services to travel bookings within the single app. We have seen many companies in China leading the trend in super apps. A similar growth pattern of high density and rapidly rising urban middle-class population will enable tech companies to capitalize on this leapfrog effect. As the use of mobile devices increases along with greater financial inclusion, people will gravitate towards having a form of digital money that they can rely on.

    For the latest in apps used to transfer money across CompareRemit has everything you need to know.

  • Funding for money transfer companies
  • Money Transfer in 2020

    Over $700 million were raised between these 6 cross-border payment service providers in 2019. As we can see, most of the funds were raised by the companies in Europe, primarily in the UK, Remitly, a Seattle based startup, and Singapore based InstaReM being the exceptions. In 2020, we could see more funding for companies in America, Africa, and Asia working towards improving or disrupting the cross-border payment industry. China, India and Mexico were among the top five countries that benefitted from remittances

  • Partnerships, Mergers, and Acquisitions
  • Alliances between emerging financial technology companies and traditional financial institutions have proven to bring a competitive advantage over others. We also see a resonance in the money transfer industry. Last year, Mastercard acquired Transfast, a global payments company with significant cross-border network reach. Retail giant Walmart launched their global money transfer service called Walmart2World in partnership with Moneygram. Xoom, a PayPal company also signed a strategic alliance with Walmart and Ria to strengthen their foothold.

    We have also seen a few successful partnerships between banks and financial technology providers namely; the tech giant Apple's partnership with Goldman Sachs and Mastercard, and Wise (formerly known as TransferWise) collaboration with Groupe BPCE. We could see continued interest in complementary service providers joining forces and a rise in collaborative competition.

  • The year of challengers
  • We expect further improvement in the traditional money transfer systems and the introduction of new products to compete with the existing methods. For example:

    • SWIFT launching its global payments initiative to reduce the speed of transactions and increase transparency in money transfers.
    • Visa launching its new payment product called B2B Connect, which was developed using distributed ledger technology which aims to provide faster transactions, more transparency, and traceability.
    • In the coming years, as the fintech industry matures further and new financial technologies develop, we expect global money transfer to become instant, accessible, cost-effective, transparent, and resistant to fraud. Other factors like geopolitical situations, rise in oil prices, etc will have an effect on the overall money transfer industry. Follow us for more updates.

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Send money on their website or download the Wise app to start sending money today.ICICI ICICI Money2India offer fast fund transfer from Europe to any bank account in India. Available in 20 Eurozone countries, the service allows you to lock your desired exchange rates and charges minimal fees with no hidden costs. Money2India Europe is an online money transfer service by ICICI Bank Germany. ICICI is one of India's largest banks and has many branches overseas. You can also sign up on the Money2India app and send money hassle-free. If you transfer money to ICICI bank accounts in India, the transfer is completed in under 30 minutes.InstaremSimilar to Wise, Instarem offers real exchange rates sourced from Reuters for your every transfer. Based in Singapore, Instarem is an online remittance service enabling money transfers to 55+ countries in partnership with 8000+ banks worldwide.Instarem is one of the low-cost international money transfer service providers, especially for small transfers. 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Make use of referral bonuses and discounts to save money on transfer costs.Paysend Trusted by 6 million customers worldwide, Paysend currently operates in more than 150 countries allowing international money transfers to over 110 countries. Paysend is the first Fintech company to introduce global card to card transfers connecting 12 billion cards issued by Mastercard, Visa, China Union Pay, and local card schemes.Paysend provides 40+ payment methods for online SMEs and serves 17,000 SMEs. Sending money to India from Europe is easy because of the multiple receiving options: send money online directly to bank cards, UPI, or bank accounts in India at a fixed low fee. You can also send a Paysend link to your recipient's mobile number to make a transfer. Transfers are usually completed within minutes. Sign up online or get the Paysend app to send Euros to Indian Rupees.Revolut  Revolut is a popular British digital-only bank/ neobank offering a range of banking services in a mobile app. Revolut, the global financial super-app, has more than 18 million customers around the world.With Revolut, you can send money in more than 30 currencies to 100+ countries. You can hold 30 different currencies for free in your Reovlut account. This makes it ideal for traveling abroad and sending international payments.Revolut charges a fixed percentage fee and claims to offer the exchange rates you see on Google for international money transfers. To send money to India, download the Revolut app and sign up. Then simply add money into your account using your card or make a bank transfer. Choose your transfer amount, your currency, and the destination country. Send money to your recipient bank account in India by adding it as a beneficiary in the Revolut app.ConclusionThe best website to transfer money to India from Europe or apps will depend on how much money you are sending, how are you paying for it, how the money is received, how fast you want the money to reach your desired destination, and how expensive is the transfer cost including conversion cost of Euro to INR. Different money transfer service providers have unique advantages that may be best suited for your transfer situations. So, it is best to compare, decide and send.

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