Digital Remittance Market Size, Share, Growth, and Industry Analysis, By Type (Banks Digital Remittance, Digital Money Transfer Operators), By Application (Migrant Labor Workforce, Study Abroad and Travel, Small Businesses, Others), and Regional Forecast to 2031

Updated On: 22 April 2024

Digital Remittance Market Report Overview

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The global digital remittance market size was USD 3889.5 million in 2020. As per our research, the market is expected to reach USD 56783.5 million by 2031, exhibiting a remarkable CAGR of 27.6% during the forecast period.

The surge in market growth is driven by a combination of factors, including globalization, international migration, and the rising demand for streamlined cross-border fund transfers. As the world becomes increasingly interconnected and people migrate across borders, there is a growing need for efficient and cost-effective cross-border payment solutions. Businesses and individuals are now seeking faster, more transparent, and more convenient ways to transfer funds globally, and digital remittances provide real-time transaction tracking and reduced transaction fees to meet these demands.

COVID-19 Impact: Demand Surged Due to Increased Adoption of Digital Payments

The COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The COVID-19 pandemic had a multifaceted impact on the digital remittance market growth. The restrictions on travel and movement created significant challenges for migrants who traditionally relied on in-person and cash-based remittance methods. As a result, they swiftly turned to digital remittance services, finding a more convenient and reliable means to send money home electronically. Simultaneously, the pandemic accelerated the broader adoption of digital payments, as people became increasingly comfortable with online and mobile banking services. This growing familiarity with digital financial tools made it not only easier for migrants to send and receive remittances but also transformed the overall landscape of cross-border transactions.

Furthermore, the pandemic prompted governments worldwide to implement regulatory changes that promoted the use of digital remittances. These regulations facilitated the operation of remittance providers and lowered the costs associated with sending money across borders, making digital remittances an even more attractive option for migrants seeking to support their families and loved ones.

Latest Trends

"Transformation Towards Mobile-First Remittances to Offer Unparalleled Level of Convenience"

The digital remittance landscape is undergoing a transformative shift towards mobile-first remittances, capitalizing on the ubiquity of smartphones and mobile internet connectivity. This shift can be attributed to various factors, including the widespread adoption of smartphones and the exponential growth of mobile internet connectivity. Mobile-friendly remittance apps have emerged to simplify the process, offering user-friendly interfaces, multilingual support, and cost-effective payment options. Mobile remittances, characterized by lower transaction fees and greater accessibility, are replacing traditional methods, transcending geographical boundaries.

The adoption of mobile-first remittances has significantly impacted migrants and their families. It offers unmatched convenience, saving migrants from the need to visit physical locations or stand in long queues. Lower transaction fees translate to more funds reaching intended recipients in developing countries, empowering unbanked and underbanked migrants. These apps provide real-time transaction tracking and status updates, ensuring transparency for both senders and receivers.

Digital Remittance Market Segmentation

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•  By Type Analysis

Based on type, the global market can be categorized into bank digital remittance and digital money transfer operators.

Banks digital remittance refers to the services offered by traditional banking institutions that have integrated digital solutions into their remittance offerings. These banks leverage their well-established financial infrastructure and customer base to provide secure and convenient digital remittance services. On the other hand, digital money transfer operators represent a diverse group of specialized service providers that focus solely on facilitating digital remittances. These operators often utilize innovative technologies and agile business models to offer competitive rates, real-time transaction tracking, and user-friendly platforms.

• By Application Analysis

Based on application, the global market can be categorized into migrant labor workforces, study abroad and travel, small businesses, and others.

The migrant labor workforce segment plays a pivotal role, serving as a lifeline for many individuals working abroad who rely on digital remittances to financially support their families and loved ones in their home countries. Study abroad and travel segments are significant, as they represent students and travelers who require funds for educational expenses or expenditures while abroad. Small businesses increasingly utilize digital remittances for cross-border trade and financial transactions, as these services offer cost-effective and efficient solutions. The “others” category encompasses various miscellaneous applications, demonstrating the versatility of digital remittances in catering to a broad spectrum of financial needs.

Driving Factors

"Increasing Globalization and International Migration to Propel Market Growth"

The increasing movement of people across borders has led to a growing demand for cross-border payment solutions. With more people living and working abroad, digital remittances provide a convenient and cost-effective way for migrants to send money back to their home countries. This trend has significantly boosted the market's growth.

"Rising Demand for Streamlined Cross-Border Fund Transfers to Fuel Market Expansion"

Businesses and individuals are increasingly demanding faster, more efficient, and more transparent cross-border payment solutions. Digital remittances meet these demands by providing real-time transaction tracking and lower transaction fees. This convenience and cost-effectiveness are driving the market's expansion.

Restraining Factor

"Lack of Digital Literacy and Financial Education to Hinder the Market Growth"

Digital literacy and financial education represent significant restraining factors for the digital remittance market. While mobile-first remittances are gaining traction, not all migrants possess the necessary digital literacy skills to effectively navigate smartphones and online services. The lack of familiarity with these technologies can impede their ability to utilize mobile remittance apps and platforms, limiting their access to these convenient services.

Moreover, financial education is equally crucial, as it ensures that migrants can make informed decisions about sending and receiving remittances. Without adequate financial knowledge, migrants may not fully understand the costs, exchange rates, and potential risks associated with digital remittances, which could deter them from adopting these services or lead to less favorable financial outcomes. Therefore, addressing the challenges related to digital literacy and financial education is essential for the sustained growth of the digital remittance market.

Digital Remittance Market Regional Insights

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"Asia Pacific to Lead the Market Due to Region’s High Levels of International Migration"

The global digital remittance market is a dynamic landscape, with various regions playing a significant role. The leading region, which holds the maximum digital remittance market share and is expected to grow at the fastest rate, is Asia Pacific. This region is characterized by a large population, high levels of international migration, and the presence of key players. While Asia Pacific is leading the way, other regions are also contributing to the market's growth.

Key Industry Players

"Key Players Focus on Partnerships to Gain a Competitive Advantage"

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Market Players Profiled

• Western Union (U.S.)
• Ria Financial Services (U.S.)
• PayPal/Xoom (U.S.)
• TransferWise (U.K.)
• WorldRemit (U.K.)
• MoneyGram (U.S.)
• Remitly (U.S.)
• Azimo (U.K.)
• TransferGo (U.K.)
• InstaReM (Singapore)
• TNG Wallet (Hong Kong)
• Toast Me (Switzerland)
• OrbitRemit (New Zealand)
• Smiles Mobile Remittance (Singapore)
• Avenues India Pvt Ltd (India)

INDUSTRIAL DEVELOPMENT

September 2023: PayPal, a global online payments platform, has expanded its digital remittance services to Africa. PayPal will now allow users in 25 African countries to send and receive remittances. This expansion is expected to help increase financial inclusion in Africa and make it easier for migrants to send money home.

Report Coverage

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.