Ned Barker, who has considerable experience in the payments sector, notes in a blog post published by UK-based cross-border payments Fintech CurrencyCloud that remittances are one of the “single most powerful financial forces in existence today, with workers sending hundreds of billions of dollars to their home countries every year.”
As noted in a blog by CurrencyCloud, remittances can be “a lifeline to the poorest people in the world who rely on these funds to educate their children, pay for healthcare and fund basic necessities.”
The CurrencyCloud blog added that “little surprise, then, that remittances account for 5% of GDP in at least 60 low to mid-income countries, and that it’s migrant workers living in G20 countries who send over half these funds.”
Until the COVID-19 outbreak, consumers making “physical cash-in, and physically collecting cash out were the transactions that dominated this world.”
As noted in the update, the pandemic has “clearly served as a catalyst for a more rapid digitization of the industry, which had to adapt quickly as 75% more people turned to making digital remittances in 2020 than they did in 2019.”
The update also mentioned that the lockdowns that occurred as the pandemic took hold “caused an acceleration of change not just in retail purchasing habits, which went from high street to digital overnight, but also transformed the way people sent money to their families and friends abroad.”
With one in nine people on the planet relying on remittances, “their needs were not going to stop because of the pandemic.” The update also noted that “when the bricks and mortar remittance service providers shut up shop during lockdown, existing service providers moved quickly to stay in business and offer their customers an easy way to access their services.”
The update also mentioned:
“It’s why today Fintechs like digital money transfers providers WorldRemit, Remitly, and [Wise] are all reporting tremendous growth as a result of the pandemic-induced change of behaviours. These were already digital-first, and so benefitted early from the increase in demand for digital remittances. In April 2020, as lockdowns took hold globally, World Remit reported a 150% year on year growth in new customers for March and April 2020. Similarly, digital-only Azimo reported a 100% month-on-month uptick in customers.”
Notably, it’s the younger demographics who’ve “been quickest to take advantage of the speed, ease and convenience of digital mobile apps and services,” the update revealed.
Now that most nations have been ‘unlocked,’ the “rush back to the high street just hasn’t happened,” the update noted.
Consumers, having “built up trust sending digital remittances,” are now happy to “continue doing so, enjoying the convenience, speed, security and lower costs that digital offers,” the CurrencyCloud team noted while adding that they now “expect quick and transparent cross-border money transfers completed how they want to do them, be it via e-wallets, prepaid accounts or bank accounts.”
And as long as this need continues, “digital remittance providers will not only be here to stay, but will continue to grow,” the blog from CurrencyCloud added.
The Cloud-powered Currencycloud payment platform enables real-time FX and payments to be made via a single integration that “fits into a business’ existing process and workflows,” the update explained.
For instance, by using Currencycloud, Sydney-based global payments business One Point Universal “went live in just two weeks – a process that traditionally would have taken months or even years.”
Using Currencycloud, a remittance business can “go digital and offer their customers the convenience of making domestic and international payments in all major currencies, to over 180 countries worldwide,” the Fintech firm revealed.
They claim that this process is “seamless for the remittance company too, who can hold and convert currencies to make payments, view balances and transfer funds between their own multi-currency e-wallets.”
According to CurrencyCloud, it’s “a simple solution that’s available to any remittance company who doesn’t want to miss out by not embracing digital remittance.”
For more details, check here.