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The Digital Remittance Market size is forecast to increase by USD 12.09 billion, at a CAGR of 12.82% between 2022 and 2027. Market expansion hinges on various factors, notably the continual technological advancements in remittance solutions, which have led to reduced costs and transfer times, making remittance processes more efficient and cost-effective. As a result, businesses experience enhanced cash flow, facilitating their growth and expansion endeavors. With the adoption of innovative platforms and payment systems, individuals and businesses alike benefit from streamlined remittance processes that offer greater convenience and accessibility. Moreover, the digitization of remittance services has enabled real-time transactions and improved transparency, fostering trust and confidence among users. This shift towards digitalization not only enhances the overall efficiency of remittance operations but also contributes to financial inclusion and economic development by providing broader access to financial services for underserved populations. As such, technological advancements continue to drive market growth and reshape the landscape of international money transfers.
Market Forecast 2023-2027
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The market has experienced significant growth in recent years, particularly in the areas of e market expansion, family-to-family money transfer time, and cross-border transactions. Mobile-based payment channels, such as mobile money and digital platforms, have become increasingly popular for online transfer between families and business associates. Electronic devices, including mobile devices, have become essential tools for facilitating cross-border remittances through digital platforms.
This report extensively covers market segmentation by end-user (personal, small business, migrant labor workforce, and others), type (outward digital remittance and inward digital remittance), and geography (North America, Europe, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges.
The personal segment is estimated to witness significant growth during the forecast period. The e-market for digital remittance services has seen substantial expansion, driven by the surge in family-to-family money transfers among migratory workers. Cross-border transactions have become increasingly common, with mobile-based payment channels, such as mobile money and transfer platforms, facilitating online transactions using electronic devices. These services cater to the financial needs of clients, particularly low-wage migrant workers, small businesses, and international students.
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The personal segment was the largest segment and was valued at USD 4.40 billion in 2017. However, the digital remittance business is subject to regulations by authorized regulators to prevent extra fees, paperwork, and security barriers, including money laundering and terrorism funding. Inward and outward digital remittances are processed by banks, Money Transfer Operators (MTOs), and online platforms. Despite the convenience and anonymity offered, clients prioritize security and trustworthiness when choosing remittance services. Banks and MTOs face competition from remittance services, which aim to provide cost-effective and efficient cross-border payments. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
Based on type, the segment is classified into outward digital remittance and inward digital remittance. The market refers to the quick and user-friendly transfer of funds from one country to another using electronic wallets, mobile apps, and online banking. This segment has experienced substantial growth due to its convenience and faster transaction settlements. Global migration and the rising need for cross-border remittances have fueled the demand for digital payment solutions. However, KYC regulations and security concerns, including terrorist financing, fraud, and privacy protection, are crucial considerations. Mobile remittance solutions, blockchain technology, and real-time banking technology have enhanced security and transparency, making such platforms a preferred choice for money transfers. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 32% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. The market in North America is projected to expand due to intensifying competition among Mobile payment providers. Silicon Valley is witnessing an influx of FinTech startups specializing in money transfers, enhancing the payments sector. This growth is anticipated to boost the demand for digital remittance and currency exchange services.
However, security concerns remain a significant challenge. Risks such as data breaches, hacking incidents, and fraudulent activities pose threats to both users and providers. Trust and confidence are crucial in this market. To mitigate these risks, security measures like encryption, multi-factor authentication, and fraud detection mechanisms are being implemented. Additionally, advancements in technology, such as artificial intelligence, data analytics, chatbots, and virtual assistants, are promoting financial inclusion and improving overall market efficiency.
Fintech companies have disrupted traditional remittance services by offering faster, more convenient, and cost-effective cross-border payments. However, it is important to note that not all digital remittance services are created equal. Some may come with hidden charges or longer money transfer times, making it crucial for consumers to do their due diligence. Artificial intelligence, data analytics, and chatbots are also being integrated into digital remittance platforms to enhance the user experience and streamline processes. As the market continues to evolve, it is expected that physical cash and paper-based transactions will become increasingly obsolete. Money transfer operators must keep up with the latest digital technology to remain competitive in the market. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
The market has experienced significant expansion, driven by the increasing digitization of banking services and the convenience of family-to-family money transfers for migratory workers and small businesses. Cross-border transactions are facilitated through mobile-based payment channels, digital transfer platforms, and online transactions using electronic devices. Remittance services, including mobile money and online platforms, offer financial security and anonymity but may come with extra fees and paperwork for clients.
Further, regulators play a crucial role in overseeing the business and addressing security barriers such as money laundering and terrorism funding. Inward and outward digital remittances are processed by banks, Money Transfer Operators, and online platforms for the migrant labor workforce and international remittances in emerging markets' economies. Authorized regulators set transfer fees and security standards to ensure trustworthiness in this growing industry. Hence, such factors are expected to drive market growth during the forecast period.
The market has witnessed significant expansion in developing countries like India, Mexico, and Brazil. Governments have initiated various programs to promote digital payment methods for family-to-family money transfers and cross-border transactions. In India, the Digital India initiative and the Bharat Interface for Money (BHIM) app have been introduced to facilitate cashless money transfers using mobile-based payment channels. Similarly, the Central Bank of Brazil launched the Brazilian Instant Payment Scheme (PIX) for instant online transactions.
Consequently, such digital transfer platforms offer financial security, anonymity, and convenience to clients, particularly low-wage migrant workers and small businesses. However, regulators must address security barriers, such as money laundering and terrorism funding, and ensure the transfer fees and extra fees are reasonable. Inward and outward digital remittances are processed through banks, Money Transfer Operators, and online platforms. Authorized regulators oversee these transactions to maintain trustworthiness and prevent potential risks.
The expansion of the market caters to family-to-family money transfers and cross-border transactions for migratory workers. However, the increasing use of mobile-based payment channels, digital transfer platforms, and online transactions through electronic devices raises concerns. Illicit financial flows, including fraud, corruption, tax evasion, and money laundering, pose significant challenges. Organized cybercrimes and anonymity offered by digital remittance services can lead to extra fees and paperwork for clients.
Further, regulators aim to ensure financial security and trustworthiness in the remittance business. Inward and outward digital remittances impact economies of emerging markets, with banks, money transfer operators, and online platforms serving the migrant labor workforce and small businesses. Security barriers against money laundering and terrorism funding are essential. Banks and authorized regulators oversee transfer fees and security measures to mitigate risks.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Citigroup Inc: The company offers digital remittances such as wire transfers, foreign wire, using wire models, and express domestic wires.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Ant Group, Digital Wallet Co. Ltd., Euronet Worldwide Inc., JPMorgan Chase and Co., Mastercard Inc., MoneyGram Payment Systems Inc., Nium Pte. Ltd., Pangea, Papaya Global Ltd., PayPal Holdings Inc., Remitbee Inc., Remitly Global Inc., Standard Chartered PLC, TransferGo Ltd., Wells Fargo and Co., Western Union Holdings Inc., Wise Payments Ltd., WorldRemit Ltd., and OrbitRemit.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments.
In today's age, the remittance market has experienced significant transformation through the use of technology. It refers to the transfer of funds from one party to another using electronic platforms. Key players in this market include companies like Emarket, Expansions, Markets, Mobileoney, and Payments. These entities offer various services such as fee-based remittances, mobile wallet transfers, and real-time transactions. Regulatory bodies like the Digital and Electronic Transactions Regulatory Authority (DETRA) and the Central Bank of Remittance Countries (CBRC) play a crucial role in ensuring the security and transparency of such services.
Moreover, the use of technologies like blockchain, biometric authentication, and encryption further enhances the security and efficiency of these transactions. Moreover, the remittance market is witnessing a shift towards mobile money transfers, with platforms like M-Pesa, Azimo, and Remitly leading the charge. The convenience and accessibility of these services have made them an essential tool for migrant workers and families in need of financial support. In conclusion, the market is a dynamic and evolving sector that offers numerous benefits to users. With the increasing adoption of digital platform and the continuous innovation in technology, the market is poised to become the norm in the global financial landscape.
Market Scope |
|
Report Coverage |
Details |
Page number |
152 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.82% |
Market growth 2023-2027 |
USD 12.09 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
11.85 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, Saudi Arabia, United Arab Emirates, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ant Group, Citigroup Inc., Digital Wallet Co. Ltd., Euronet Worldwide Inc., JPMorgan Chase and Co., Mastercard Inc., MoneyGram Payment Systems Inc., Nium Pte. Ltd., Pangea, Papaya Global Ltd., PayPal Holdings Inc., Remitbee Inc., Remitly Global Inc., Standard Chartered PLC, TransferGo Ltd., Wells Fargo and Co., Western Union Holdings Inc., Wise Payments Ltd., WorldRemit Ltd., and OrbitRemit |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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