Remittances to Pakistan rose to $2.77 billion in July 2020, beating all previous records to reach an all-time high in a single month, according to the State Bank of Pakistan (SBP) data.
$2.77 billion represents a year-on-year growth of 36.5 percent compared to $2 billion, which was received in the same month last year. Remittances have been on a rise defying predictions amidst the global economic fallout and job losses. Last month, Pakistan recorded $2.47 billion.
Top remittance sending countries for the month of July were from Saudi Arabia ($821.6 million), followed by the UAE ($538.2 million), UK ($393.9 million), and the US ($250.6 million).
Reasons for an increase in remittances
There are two primary reasons that can be attributed to the record increase in remittances:
A massive drop in oil prices in the wake of the Coronavirus pandemic has been a double whammy for many Pakistanis Overseas. As Overseas Pakistani Workers prepare to return home due to the job losses, they are sending their savings. This has also been a common trend in countries like the Philippines and Bangladesh that are highly dependent on remittances especially from the Middle East.
In 2009, State Bank of Pakistan, Ministry of Overseas Pakistanis, and Ministry of Finance launched a joint initiative called Pakistan Remittance Initiative (PRI) in efforts to streamline the ownership structure for remittance facilitation and financial literacy in Pakistan. One of its most consistent marketing campaigns has been to reduce dependencies on informal channels such as Hawala and Hundi and to promote formal channels for sending remittances.
Lockdown measures and a ban on international flights due to the Coronavirus Pandemic have curtailed the availability to send money through informal channels and as a result, we see a significant decline in informal methods of sending money home and an increase in formal channels especially in the digital channels.
Other factors such as family and friends sending money for Eid, a weak Pakistani Rupee, and the recent announcement of the tax amnesty in the construction sector. We also have to remember that the remittances by their family members working abroad make up a significant portion of the household incomes in Pakistan. So, the money had to keep flowing. And unavailability of informal channels has prompted the much-welcomed switch to the formal financial channel of sending money internationally.
In light of the shift in remitters' behavior, PRI also introduced a new waiver that reduced the threshold for eligible transactions from $200 to $100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme, incentivizing the adoption of digital channels.
US Dollar's Current State as a CurrencyThe United States dollar has been the dominant currency in the world for decades, and its importance is reflected in its widespread use in international trade and investment. Despite facing several challenges over the past few years, the dollar remains a popular currency for global transactions.One of the main reasons for the US dollar's popularity is its perceived stability and strength. The US economy is one of the largest and most diversified in the world, with a stable political system and strong institutions. As a result, the US dollar is often considered a safe haven currency, particularly in times of economic uncertainty.However, the US dollar has also faced several challenges in recent years, including a high debt-to-GDP ratio, trade tensions with other countries, and a changing global economic landscape. These factors have led some to question whether the US dollar will continue to hold up against other currencies over the next few years.Forecast for the US Dollar Against Other CurrenciesJPMorgan's PerspectiveJPMorgan, one of the world's leading financial institutions, believes that the US dollar is likely to maintain its strength against other currencies over the next 1-2 years. According to a report by the bank, currency volatility is expected to remain high in the near term, which could lead to fluctuations in exchange rates. However, the report notes that the relative strength of the US economy compared to other major economies is likely to keep the US dollar strong.The report highlights several factors that could contribute to the strength of the US dollar, including the Federal Reserve's commitment to maintaining a stable inflation rate and ongoing fiscal stimulus measures by the US government. JPMorgan also notes that the US dollar's status as the world's reserve currency gives it a significant advantage in global trade and investment.Forbes' PredictionsWhile JPMorgan is optimistic about the US dollar's prospects, Forbes has a more mixed view. The business magazine predicts that the US dollar may weaken against the Indian rupee over the next year, citing factors such as the US-China trade war and a rising Indian economy. However, Forbes notes that the Philippine peso and Mexican peso are likely to remain relatively stable against the US dollar, given the strength of their respective economies.Forbes also points out that the US dollar's status as the world's reserve currency has been in decline in recent years. While the US dollar is still the most widely held currency in the world, its share of global reserves has been decreasing in recent years, partly due to the rise of emerging market economies. This trend could have significant implications for the US dollar's role in global trade and investment in the long term.Investing.com's PerspectiveInvesting.com, a leading financial news and analysis website, takes a different view of the US dollar's prospects. The website argues that the US dollar is unlikely to collapse, despite concerns over the country's debt levels and other economic challenges. The report notes that the US dollar remains the world's most widely held currency and is likely to remain so for the foreseeable future.Investing.com also points out that the US dollar has several advantages over other currencies, including its liquidity and the depth of the US financial markets. The website notes that the US dollar's strength is not solely dependent on the performance of the US economy, but also on factors such as geopolitical developments and the policies of other major central banks.Importance of Staying InformedRegardless of the outcome, it's important for those involved in international trade and investment to stay informed about the latest developments in currency markets and to consider the potential risks and opportunities associated with different currencies.For example, individuals and businesses that frequently transfer money across borders may want to monitor exchange rates and fees to ensure that they are getting the best deal.To see today's best exchange rates and providers for sending money online, use CompareRemit's online comparison tool today!
Wise, a money transfer specialist that went public recently, partnered with Payfare, the digital banker to America's gig workforce. Together, they are on a joint mission to solve the cross-border money transfer problem for gig workers worldwide.One of the significant shifts during the pandemic was the quick adoption of gig workers by businesses. Beyond Lyft, Uber, and other aggregator platforms, companies around the world relied on skilled gig workers to bridge the resource and talent gap.Gig workers can be anyone that performs an income or fee earning activity outside a long-term employer-employee relationship. The gig workers encompasses many form of service providers such as:Freelancers ConsultantsProfessionalsCrowdsourced networkOutsourced teams, etc.A 2019 Mastercard study estimated that the global gig economy generates US $204 billion in gross volume, and is expected to grow by 17 percent by 2023.Why Is This Partnership Between Wise And Payfare Important?For starters, the traditional ways of sending are not fit for the gig economy. Imagine giving US $7 for every US $100 you make. That is how much it costs to send money internationally - an average of 7 percent.The cost may vary depending on the country you are sending from, the country you are sending to, and the money transfer company facilitating your transfer.This newly formed job industry needs a banking or financial transaction system that supports and empowers both service creators and the serving workforce.PayFare is an emerging mobile phone-based digital banking system offering instant payouts to gig workers. The partnership with Wise, a money transfer specialist making international money transfer quick, easy, and convenient, will deliver an experience tailored for the gig economy.Payfare has been on a strategic hunt for partnerships leading up to this announcement. Other key developments of Payfare are:Launched instant pay for DasherDirect users: Giving access to automatic, no-fee payouts after every dash DasherDirect, DoorDash delivery. Drivers/Dashers can access their earnings faster through direct response to Dasher feedback requesting access to their earnings without having to wait for collective payment at the end of a week. Therefore, to avoid work now and get paid later policy.Integrating with Plaid: Payfare integrates with Plaid money transfer financial service company to streamline the onboarding of Payfare users. Allowing them to swiftly and securely connect their account to the applications and services of their choice on their phones.Payfare plans to leverage its Plaid integration to enable new banking features and products to cater specifically to the financial needs of the gig workforce. They are currently under development for their launch in early 2022.Leveraging the RTP network: By connecting to The Real-time Transport Protocol (RTP), Payfare is adding the ability to support payments to bank accounts immediately with enhanced speed and security. Therefore, offering more choice for its corporate clients and users.Why Should I Use Payfare?If you are a gig worker, payout and payment platforms are a hassle. Payfare is the complete digital financial ecosystem for the gig economy.Payfare offers simple mobile banking, instant payout solutions, and loyalty-reward solutions for the gig worker in the digital age. Payfare is already powering brands such as Uber, Lyft, and DoorDash, to provide financial health and benefits for their workforce.The partnership with Wise ensures that you don't need to line up for assistance physically at a bank or search for the nearest money transfer agency.Benefits Of PayfareInstant pay: Payfare provides instant payouts. Each morning the earnings will get deposited to your Payfare account, providing the option to cash out your available earnings anytime, up to 5 times a day. Giving you instant access to your funds immediately without any hassle.Gig workers need not wait for a week or weeks to receive payments. They can now get instantly paid through Payfare's tie-up with most mobile app services like Lyft, Uber, DoorDash, etc.Payfare Mastercard: This digital banking app gives you the Mastercard facility to instantly deposit all your earnings. You can withdraw, transfer and keep your earnings saved in your PayFare account MasterCard.Secure and safe payment system: PayFare plans to offer instant payout and tailored digital banking solutions for all contract workers. A one-stop solution for the gig workforce to provide all necessary banking services and help send remittances to friends and family abroad.International money transfer: Payfare aims to facilitate international money transfers through the infrastructure of Wise by 2022. To become a leader in low-cost international money transfers from job workers' accounts to their loved ones abroad.Payfare, which is working with some of the world's largest on-demand platforms, will be the first online-based banking medium with Wise to enable the growing gig economy to send money internationally.Wise offers low-cost transfer fees and real-time exchange rates for cross-border transfers. Wise's strategic goal aligns with Payfare's mission to enable a quick, easy, and convenient financial platform for the global gig economy.What Are The Best Ways To Send Money Abroad For Gig Workers?The best way to send money abroad largely depends on the transfer fees, exchange rates, and transfer speed. Depending on your need, the best money transfer will differ.For instance, Wise is consistently one of the best money transfer companies that offer a high USD/INR exchange rate, while Xoom, a PayPal service, is one of the fastest ways of sending money.Sounds confusing? When in doubt, compare the top money transfer companies on CompareRemit, and save on every transfer.In conclusion, with the new emerging job roles, we need a banking system that is quick, easy, and hassle-free. Payfare and Wise are gearing up to serve this growing gig economy.According to Payfare, it is a global addressable market of US$455 billion. The ecosystem focuses on solving the pain points and catering to the banking needs by providing a reliable financial system that works for the gig workforce.Simplifying the way we open a bank account, save, deposit, and send remittances back to your home country instantly without any hassle. The partnership is on its way to becoming a one-stop mobile banking and financial solution for all the gig workforce.
Sending money overseas to friends and family and for business has never been easier in this day and age. However, even with advanced technologies and extensive global connectivity at our disposal, international money transfers seem expensive, complicated, and often lack transparency when it comes to fees.Whenever we make an international payment, we give in to the extra unexplained costs or repeat charges. There is no reason why the costs cannot be more transparent and the transfer process can't be more simplified. This is what drove Vroon Modgill, a first-generation immigrant to launch Sokin.Sokin is a UK-based global payments provider founded in 2019 with 10 international offices. Vroon Modgill, a former Chief Executive Officer (CEO) of a cryptocurrency payments company in North America started Sokin with the purpose to provide a cost-effective currency exchange service for both consumers and businesses that is also transparent, accessible, safe, and user-friendly.With the introduction of the Sokin Global Currency Account in the UK and Europe, Sokin aims to transform the current remittance landscape and the global money transfer market.What Is Unique About Sokin?Sokin is the first subscription-based global payments provider. In other words, you pay a fixed monthly fee for unlimited money transfers across international borders, unlike other brands that charge a fee with every transaction (ranging from 5% to 7%).CEO of Sokin, Vroon Modgill remarked, "While everything else moved forward, global payments and remittances lagged behind, and consumers put up with high fees and time-consuming transactions."The global remittance market, an element of international payments, is projected to reach $930.44 billion by 2026. The average cost for an international money transfer is around 7% with banks being the most expensive at 10.9%.With Sokin's subscription service, which requires customers to pay a fixed monthly fee for unlimited money transfers in over 200 countries with competitive exchange rates, saving money comes easy. Transparency is an integral part of Sokin service. The company claims that there are also no hidden costs or commission fees according to their website.Sokin Global Currency AccountSokin global currency account allows clients to make unlimited international money transfers and payments in 38 different currencies in over 200 countries and territories with a monthly fixed fee of only 9.99/9.99.Sokin global currency account is a low-cost alternative to the current money transfer system strife with expensive fees and complex processes.What Is A Global Currency Account?Having a global currency account is highly beneficial for both personal and business needs in today's money transfer ecosystem.A global currency account, also known as a foreign currency account or multi-currency account, or borderless account allows you to send and receive payments in multiple currencies, which all can be managed through a mobile app.For customers, a global currency account is convenient when traveling abroad or making purchases overseas. They can keep their money in the local currency of their destination country.Most importantly, for businesses dealing with international payments every day, a global currency account makes the money transaction smooth while also reducing the risk of currency fluctuations and saving more money.A global currency account allows you to manage transactions involving various currencies instantaneously. There is also no need to open multiple local accounts in different countries.In other words, it is a hyperlocal banking solution for global citizens. Neobanks like Wise and Remitly offer multi-currencies. In recent times, many traditional banks such as HSBC and DBS have also jumped on the bandwagon.Read more on the pros and cons of multi-currency accounts.Sokin Debit CardSokin global currency account debit card can be used for all day-to-day activities in addition to making payments for travel abroad. Supported by the Mastercard network, the debit card will be made available in over 80 countries (terms and conditions apply).The card is also eco-friendly, made from over 86% recycled PVC which shows Sokin is focused on the long-term, sustainable growth of their business.Getting The Sokin Mobile AppThe Sokin mobile app is available on iOS and Android. You can download the app from the Apple App Store and Google Play Store.Once you download the app, sign up for your free global currency account to transfer money internationally hassle-free with no commission fees, and no hidden fees.Money Transfer ProvidersThe money transfer industry is a highly competitive marketplace. You get a plethora of options when you search for ways to send money from the UK to other countries or vice versa. It is good to know that there are alternatives to a particular currency exchange provider since the services offered by money transfer companies vary widely in terms of fees, speed, exchange rates, and many more.Here are Top 5 alternatives to Sokin for sending money from the UK:InstaremBased out of Singapore, Instarem is an online remittance service provider known for low fees and competitive exchange rates. Its service is authorized to operate in 9 countries, enabling customers to send money to over 55 countries via their global network of over 8000 banks. Send money online or via their Instarem app. The money is usually received in 1-2 days.WiseA UK-based online money transfer service founded in 2011 provides one of the cheapest money transfer services. You will get no-marked-up exchange rates and pay no hidden fees. Wise is trusted by over 10 million users worldwide. There are various ways to fund your transfer. Either send online or use their well-designed, easy-to-use mobile app.RemitlyRemitly is a popular online payment platform based in the U.S., offering some of the cheapest rates for international money transfers. It is among the top choice for sending money for cash pick-up because of its over 100,000 agent locations available across the globe. You can also send the money to bank accounts, mobile wallets or opt for home delivery and pay with a variety of payment methods.Skrill Money TransferInternational money transfer to a bank account or a third-party mobile wallet is free with Skrill money transfer. Skrill is a digital multi-currency wallet provider that you can use to make online payments. There is no exchange rate margin. You will use the rate you see on Google. Skrill app is also available for download both on Android phones and Apple phones.Western UnionHeadquartered in Denver, Colorado, USA, Western Union is the oldest money transfer company that has been moving money for over 145 years. It is trusted by millions of migrants to send money to your family back home. Major advantages of Western Union are its wide availability (over 200 countries in 130 currencies) and flexible options (bank transfers, cash pick-up, bill payments, mobile transfers). Even if your recipient doesn't have a bank account, they can still get the money thanks to its alternative payment options.Confused? Compare Them Side-By-Side.In conclusion, Sokin is a fairly new player in the industry; an industry with a high entry barrier, particularly in the remittance space. The race is on to make payments more open and transparent, remove the barriers that impede better service delivery, and improve the processes that are difficult, expensive, and time-consuming.While there are money transfer companies that offer better exchange rates and lower fees, Sokin is the first payment platform to integrate the remittance industry with the subscription economy.Another interesting bet is its offering for the Chinese market, which is the second-highest remittance-receiving country after India. Most players tended to stay away from China due to its stringent regulatory requirements. Sokin claims to let you transfer any currency into any bank account in China within 2 hours (excluding weekends and Chinese bank holidays).As consumers demand more intuitive and convenient payment solutions and an increased investor appetite for FinTech in recent times, Sokin seems to be in the right direction.
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