The Global Remittance Market is poised to reach $ 1200 Bn owing to rise in mobile-based payment channels and cross-border transactions. : Ken Research
Global Remittance Market Ecosystem
Global Remittance Market is concentrated among the top 10 players. Prominent players are pursuing various strategies, such as research & development initiatives, product innovations, joint ventures & strategic partnerships, expansion, and mergers & acquisitions to gain a competitive edge in the market. Market players are focusing on leveraging the capabilities of newly emerged fintech companies to offer their consumers the utmost convince of remitting funds. The major companies dominating the Global Remittance market for its products, services, and continuous product developments are Bank of America, Citi Group Inc., Pay Pal, Wells Fargo, JP Morgan Chase among others.
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1. Rise in Cross-Border Transactions and Mobile-Based Payment Channel
30% Growth in cross-border B2B transaction values 2020-22
Rise in cross-border transactions and move toward mobile banking and mobile-based payment solutions dominate payment trends in Asia-Pacific, which is expected to drive the growth of the remittance market. In addition, owing to rise in international commerce, migration and changing economic trends across the globe. In addition, new developments in the world of cross-border payments is the prospect of making real-time international payments a reality. A 30% growth was recorded in cross-border transactions in 2020-22.
Furthermore, number of banks are striving to deliver timely cross-border remittances and value-added services using a relationship-centric approach, which fuel the growth of the remittance market.
2. “Reduced Remittance Cost and Transfer Time:” Will it sustain in the long run?
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Cross-border payments have become insignificant in cost, quick, auditable, and accessible to everyone owing to the use of digital transfer networks such as mobile phone technology, mobile money, digital currencies, distributed ledgers, electronic identity, and others to send money. The average cost has fallen to 7%. Moreover, the adoption of digital remittance is expected to reduce reliance on cash agents in both sender and receiver nations, which is now contributing to the maintenance of high transaction costs.
The figure shows that the fees for a $200 remittance have come down significantly over time, although they seemed to have stagnated in the last 3 years. The median remittance fee has decreased from 7.7 percent in 2011 to 5.7 percent in 2020. The reduction was also broad across the distribution of remittance fees, with the 75th percentile decreasing from 11.1 percent to 7.7 percent, and the 25th percentile falling from 5.2 percent to 4 percent.
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