Global Remittance Market Report and Forecast 2024-2032

Global Remittance Market Outlook

The global remittance market size reached approximately USD 607.43 billion in 2023. The market is projected to grow at a CAGR of 4% between 2024 and 2032.

Key Takeaways

• The World Bank's goal is to reduce the average cost of remittances to 3% of the amount sent.

• Countries like India, China, Mexico, and the Philippines are among the top recipients of remittances globally.

• Remittances are increasingly recognised as a tool for financial inclusion, providing recipients with access to financial services.

Remittance refers to the exchange of a monetary sum from one party to another, usually overseas. Thus, it can be commonly described as an international money transfer. Migrants from various parts of the world utilise remittance services to transfer money to their home countries, which could be personal transfers between family and friends or in the form of business payments. In today’s globalised world, the high overseas migration for work and educational purposes has increased the demand for remittance transactions. As a result, remittance serves as a strong force in the growth of many developing economies.

Migration rates have gone up worldwide, with people from various parts of the world migrating to foreign countries for higher studies and better career opportunities. This, in turn, is leading to an increase in cross-border remittance payments and propelling the remittance market growth. The rapid technological advancements have made the banking experience convenient, with a variety of services available on digital platforms, which are steadily being utilised by financial institutions in the form of mobile payment apps and others. People can make payments at their leisure through mobile payment apps, ensuring security and privacy in the transaction process. These apps have further decreased the transfer time, making them a popular choice among consumers. These factors are expected to further propel the remittance market growth.

A report issued by the World Bank in May 2021 states that despite the COVID-19 pandemic, the overall remittance flow remained strong in 2020, registering a smaller decline compared to the previously estimated decrease. The major factors for the steady remittance flow amid the crisis remained fiscal stimulus, a growing preference for digital payments over cash, and a shift in flows from informal to formal channels.

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Key Trends and Developments

Increased use of cryptocurrencies; focus on financial inclusion; regulatory changes; and partnerships and collaborations are the major trends impacting the remittance market development

April, 2024

RightCard Payment Services Limited, operating under the trade name LemFi, announced that it has received authorisation from the Central Bank of Kenya (CBK) to conduct remittance operations in Kenya.

April, 2024

Officials from the Postal Administration of India are collaborating with the Philippine Postal Corporation (PHLPost) to develop a payment platform aimed at enhancing and expanding postal remittance services in the Philippines.

April, 2024

MoneyGram, a global financial technology firm, announced a new collaboration with Tencent Financial Technology which allows users to transfer funds via MoneyGram Online.

April, 2024

As of mid-March, Nepal's balance of payments (BoP) surplus reached Rs 327.55 billion, primarily due to the continuous growth in remittance earnings.

Increased use of cryptocurrencies

Cryptocurrencies like Bitcoin are being increasingly used for remittances due to their low transaction fees and quick processing times.

Focus on financial inclusion

Remittances are being recognised as a tool for financial inclusion, providing recipients with access to financial services and contributing to economic development in receiving countries.

Regulatory changes

Governments and financial institutions are implementing stricter regulations to prevent money laundering and terrorism financing through remittances.

Partnerships and collaborations

Remittance service providers are forming partnerships with fintech companies, mobile operators, and banks to expand their reach.

Remittance Market Trends

Remittances, the money sent home by migrant workers, are increasingly being recognised as a significant tool for financial inclusion and economic development in receiving countries. Remittances often serve as an entry point for unbanked or underbanked individuals in receiving countries to access financial services. When migrants send money home through formal channels such as banks or mobile money platforms, their family members may need to open a bank account, which, in turn, introduces them to the formal financial system.

Market players in remittance market are establishing collaborations to enhance financial inclusion and make remittance services more accessible. A collaborative effort between the Postal Administration of India and the Philippine Postal Corporation (PHLPost) in April 2024 aims to improve and broaden the scope of postal remittance services in the Philippines.

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Market Segmentation

“Remittance Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Inward Remittance

• Outward Remittance

Market Breakup by Remittance Channel

• Banks

• Money Transfer Operators

• Others

Market Breakup by Application

• Consumption

• Savings

• Investment

Market Breakup by End User

• Business

• Personal

Market Breakup by Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

Banks account for a major remittance market share owing to their extensive branch network and long-established trust among consumers

Banks are predicted to hold a significant share of the market based on remittance channels due to their substantive financial powers. Around the world, banks are adopting various digitalised innovations to expand their services to cross-border remittance transactions, so that they can be utilised by more people.

Meanwhile, the money transfer operator segment is predicted to observe a steady increase in remittance market over the forecast period. This expansion can be credited to their swift adoption of digital platforms such as mobile apps, making the entire process of remittance significantly easy. This, in turn, is attracting potential consumers and aiding the market. The increasing movement of people across borders for work, education, or refuge has also led to a rise in the demand for remittance services. MTOs cater to the needs of these migrant populations by providing a convenient way to send money home.

Personal share maintains its dominance in the market due to the large number of migrants transferring money to their family members

Personal remittances, which include money sent by migrant workers and individuals to their families and friends in their home countries, usually constitute the largest portion of the money transfer market. This is primarily due to the sheer number of individuals working abroad and sending money home for various purposes, such as supporting family members, education, healthcare, or savings. Personal remittances are a critical source of income for many households in developing countries and play a significant role in poverty reduction and economic development.

Business remittances, which involve transactions between businesses across borders are anticipated to grow at a sizeable growth in the remittance market in the forecast period. These can include payments for goods and services, investments, or other business-related transfers.

Competitive Landscape

The market players are increasing their collaboration and research and development activities to gain a competitive edge in the remittance market

Bank of America Corporation is one of the largest financial institutions in the world, serving individual consumers, small and middle-market businesses, and large corporations with a full range of banking.

Citigroup Inc. is a global financial services company with approximately 200 million customer accounts and business in more than 160 countries and jurisdictions which provides a broad range of financial services.

J.P. Morgan Chase & Co. is one of the largest, and most well-known financial institutions in the world and is a leader in investment banking and financial services.

Western Union Holdings, Inc. is a global leader in cross-border, cross-currency money movement and payment services which provides consumers and businesses with fast and reliable ways to send and receive money.

Other major players in the market include Ria Financial Services Ltd, MoneyGram International, Inc., and TransferWise Ltd., among others. These companies are focused on collaboration and technological innovations to enhance their capabilities.

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Remittance Market Analysis by Region

In terms of region, North America is expected to hold a significant share of the global market in the forecast period. The growth can be attributed to the considerable immigration of students and job seekers into the North American region from various parts of the world. The increasing number of immigrants profits the prominent money transfer operators, such as PayPal, Western Union Holdings, and others based in the North American region.

The remittance market in Asia Pacific has also witnessed significant growth and demand. Asia Pacific is home to a substantial number of migrant workers who move to other countries in search of employment opportunities. Countries like the Philippines, India, Pakistan, and Bangladesh are among the top remittance-receiving countries globally and the large migrant population drives the demand for remittance services.

Key Highlights of the Report