The Global Money Remittances Market is Dominated by Cross-border Payments - Makreo Research

Mumbai, May 09, 2022 (GLOBE NEWSWIRE) -- Makreo Research has published a study on Global Remittance Market, report titled "Impact of Corona Virus (COVID-19) Over Global Remittance & Payments Market Outlook to 2025". The report delves deeply into various parameters such as market size, segmentation, value chain analysis, and industry cause and effect analysis. The study includes market dynamics that provide an understanding of industry opportunities, driving forces, major challenges impeding growth, and an analysis of future opportunities that may help market players capitalise on untapped business potential in the specific geography.

Market Performance

In 2020, Remittance flow had declined by 1.6% as compared to 2019. This decrease was significantly less than what had been predicted at the onset of the crisis, and it was much less than the drop in volumes seen during the 2008 financial crisis.

India, China, Mexico, the Philippines, and the Arab Republic of Egypt were the top five remittance recipients in current USD terms in 2021. Remittances to low- and middle-income countries are expected to increase by 7.3% in 2021. This recovery is more substantial than previous projections, and it follows the resiliency of remittances in 2020, when despite a harsh global recession caused by COVID-19, remittances fell by only 1.7%. Moreover, Higher oil prices boosted economic recovery and spurred the surge in remittances from the Gulf Cooperation Council (GCC) countries, which engage over half of South Asia's migrants. Remittances to India increased by 4.6% in 2021.

Global Remittance Market Forecast, 2022-2027

Increasing Digitization

The changing environment of cross-border payments is directly driven by the rapid change in customer needs. As a result of increased digitization and smartphone penetration, digital channels are gaining popularity as a medium for remittance payments, particularly in emerging markets.

Several Central Asian countries, on the other hand, rely heavily on Russian remittances. Many countries suffered as a result of the outbreak of the war. Remittance growth rates in Central Asia are expected to fall in 2022, according to revised projections.

Impact of Covid-19

The COVID-19 lockdown hampered the business of money transfer operators (MTOs), who rely on migration, emphasizing the importance of digitalization in service delivery. At the same time, a more significant factor disrupting remittance flows is the disproportionate loss of income experienced by migrants who have become stuck in countries of destination or returned, only to find little prospect of economic activity in their areas of origin, which are also affected by economic stagnation.

Further Key Findings

• An Increasing Number of Migrant Students: Students from all over the world are traveling to further their education. The top three destinations for migrant students are the United States, Canada, and the United Kingdom. In 2021, Canada will have issued approximately 450,000 new study permits. Prior to the pandemic, there were just over 400,000 new study permits in effect, which fell to 255,000 in 2020.
• Increasing Internet Penetration: As of January 2022, the total number of Internet users worldwide stood at 4.95 billion, or 62.5 percent of the total world population, up from 56.73 percent in 2019. More than 90% of the population in the United States has Internet access. By the end of 2021, Internet users accounted for nearly 73 percent of China's population. In 2021, India's internet penetration rate is expected to be around 45 percent.
• Adoption of Cryptocurrency: In the future, cryptocurrency is expected to account for a significant portion of global annual remittances. While PayPal, credit cards, and bank transfers are the most commonly used methods for sending remittances, the use of cryptocurrency is increasing due to its unique characteristics for cross-border transfers.
• Solutions based on DLT: Cross-border remittances solutions allow banks and payment systems to connect to new distributed ledger technology (DLT)-based payment infrastructures (such as RippleNet) to process cross-border foreign exchange remittance transactions. Services such as FX quote finalization and debit/credit of beneficiary accounts are supported by DLT-based solutions. DLT has the potential to significantly reduce inefficiencies and costs in the global money transfer system.