Remittance Market Analysis

Remittance Market Overview

Remittance Market Size was valued at USD 49.5 Billion in 2022. The Remittance Market End Use is projected to grow from USD 54.6 Billion in 2023 to USD 119.6 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 3.80% during the forecast period (2023 - 2032).

Cross-border transactions and mobile-based payment channels are growing, while the time and cost of remittance transfers are declining, are the key market drivers enhancing the market growth.

Figure 1: Remittance  Market Size, 2023-2032 (USD Billion

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Remittance Market Trends

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  Rise in mobile-based payment channels and cross-border transactions is driving the market growth

  
  

Numerous economic advantages of cross-border remittances include enhanced financial inclusion and economic growth. The lives of migrants and their families depend heavily on remittances. The majority of the household income, which is often used for needs like food, shelter, medication, and education, comes from money received in migrant homes in their home countries of origin. As illustrated by the never-ending webs of intermediaries, hidden costs, and paper-based bureaucracy, sending money internationally has historically been time-consuming and expensive. Thanks to improvements made in the sector over the past few years, people and even small and medium-sized organisations can now take advantage of more affordable, quick, and useful overseas fund transfer services.

Due to their direct access to the institutional foreign exchange market, big businesses, banks, and governments have historically benefited from these advantages, which has fueled the expansion of the remittance sector. Additionally, new firms entering the remittance market are boosting levels of competition, positioning themselves against competitors using fees as a real differentiation, providing clients with additional ease and affordability, and boosting market growth.

Incumbents take advantage of the advantages of digital platforms, enjoy lower fixed costs, and offer consumers quicker turnaround times thanks to their newer, more efficient technological and operational platforms. They are able to provide lower fees as a result, making remittances accessible to all socioeconomic groups. Additionally, market participants are aggressively collaborating with cutting-edge fintech firms to strengthen their regional presence.

Here, digital transformation is crucial because it enables the delivery of new, improved products and services while regulating and lowering operational expenses. Professionals with knowledge of emerging technologies are assisting the BFSI sector's future growth. As remittances are regarded as one of the crucial assets for this sector, digital remittance is one of the major reasons fostering the expansion of this industry. This is related to the fact that the Digital Remittance Market is growing along with the BFSI industry. Around 4.80 billion people used the internet as of January 2021, or around 59.5 percent of the world's population.

A world without the internet is unimaginable right now. The internet, which extensively connects billions of people, is a foundational element of the advanced information society. Around 59.5 percent of people worldwide use the internet, with Northern Europe leading the way with a population-wide internet penetration rate of 96 percent. The Digital Remittance Market has tremendous growth potential as a result of this increase in internet usage. This is due to the fact that all-digital remittances enable the online transfer of funds utilising any device with trustworthy internet connectivity. Thus, driving the Remittance market revenue.

Remittance Market Segment Insights

Remittance Mode of Transfer Insights

The Remittance Market segmentation, based on mode of transfer, includes digital and traditional (non-digital). Traditional (non-digital) segment dominated the global market in 2022. The conventional way of sending money comprises, among other things, using ATMs and checks. The consumer's perception of confidence and safety while sending money through an offline channel is the main driver boosting the segment's rise. Additionally, traditional means are the only options for sending money abroad until the recent development of digital channels, which explains why they account for the largest portion of the market.

Remittance Type Insights

The Remittance Market segmentation, based on type, includes inward remittance and outward remittance. Outward remittance segment dominated the Remittance Market in 2022. The majority of firms operate in the global economy, and in order to compete on such a large scale, a corporation must contend with competition worldwide. An external remittance makes it possible to transact internationally and takes advantage of commercial opportunities that otherwise might not have been available.

Remittance Channel Insights

The Remittance Market segmentation, based on channel, includes banks, money transfer operators, and online platforms (wallets). Money transfer operators segment dominated the Remittance Market in 2022. The cost of using a bank varies depending on where customers are sending money and the rules that apply to that particular bank. However, some money transfer companies impose a set fee regardless of the destination of the transfer. In the meanwhile, certain money transfer businesses, like Western Union, provide options that reduce the cost of overseas transactions.

Remittance End Use Insights

The Remittance Market segmentation, based on end use, includes migrant labor workforce, personal, small businesses, and others. Personal segment dominated the global market in 2022. All financial exchanges between residents and non-residents, including both migrants and non-migrant inhabitants, are referred to as personal remittances. Romania, Latvia, and Croatia were the EU member states most dependent on personal remittance inflows in 2020, according to Eurostat, Directorate-General of the European Commission. This statistic highlights the importance of personal remittances. Additionally, transfers of internal remittances that take place within a nation's boundaries also contribute to the segment's supremacy.

Figure 2: Remittance Market, by End Use, 2022 & 2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Remittance Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America Remittance Market dominated this market in 2022 (45.80%). The market's dominance can be attributable to the presence of some well-known competitors, like Citigroup, Inc. and Bank of America Corporation. Additionally, to take advantage of the capabilities of well-known players, fintech startups in North American nations are aggressively forming partnerships with them. Further, the U.S. Remittance market held the largest market share, and the Canada Remittance market was the fastest growing market in the North America region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: REMITTANCE MARKET SHARE BY REGION 2022 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Remittance market accounted for the healthy market share in 2022. The success of developing technology and the digital finance interface across the regional market will largely depend on how well smartphone technology is received. Further, the German Remittance market held the largest market share, and the U.K Remittance market was the fastest growing market in the European region

The Asia Pacific Remittance market is expected to register significant growth from 2023 to 2032. The growth can be ascribed to the Asia Pacific region's location of the primary recipients of remittances, including China, the Philippines, and India. In addition, a number of important firms from around the globe are vying for the lucrative local market. Moreover, China’s Remittance market held the largest market share, and the Indian Remittance market was the fastest growing market in the Asia-Pacific region.

Remittance Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Remittance market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Remittance Industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Remittance Industry to benefit clients and increase the market sector. In recent years, the Remittance Industry has offered some of the most significant advantages to medicine. Major players in the Remittance market, including Bank of America Corporation, ZEPZ, Citigroup, Inc., Ria Financial Services, Inc., OFX, Wells Fargo, Western Union Holdings, Inc., PayPal, MoneyGram International, Inc., and Wise US, Inc., are attempting to increase market demand by investing in research and development operations.

Technology and payment firm Mastercard Inc. (Mastercard) handles the clearing, authorization, and settlement of financial transactions. It provides a wide range of transaction services, including domestic and international transactions, digital payments, real-time account-based payments, and payment system security. It also offers payment solutions for credit, debit, prepaid, and commercial cards. Additionally, Mastercard offers advisory services like consultancy, analytics, and implementation services as well as value-added services like rewards and loyalty programmes.

Individuals, businesses, governments, financial institutions, digital partners, merchants, and other organisations are all served by Mastercard. The Americas, the Middle East, Africa, Europe, and Asia-Pacific are all where it conducts business. The US city of Purchase is home to Mastercard's corporate headquarters. In order to facilitate the integration of Mastercard Cross-Border Services and speed up international remittances throughout the MEA area, Mastercard and ProgressSoft entered into a strategic agreement in December 2021. ProgressSoft is a provider of real-time payment solutions.

Trustly offers online payment solutions to banks, customers, and merchants. The company's platform delivers cross-border payments for the e-commerce, gaming, financial services, and travel industries as well as real-time processing, bookkeeping, and account reconciliation features created for mobile devices. Trustly, an open banking payments provider, joined up with Conotoxia, a multi-currency business with headquarters in Poland, in August 2022 to offer customers a fast, safe, and secure way to send money abroad using their bank accounts. The goal of the agreement was to give both current and potential clients more flexibility when sending money to North America.

Key Companies in the Remittance Market include

• Bank of America Corporation


• ZEPZ


• OFX


• Ria Financial Services, Inc.


• Wells Fargo


• Citigroup, Inc.


• Western Union Holdings, Inc.


• Wise US, Inc.


• PayPal


• MoneyGram International, Inc.

Remittance Industry Developments

November 2021: In order to expand its services in more than 20 markets worldwide, including Asia Pacific, UniTeller, a U.S.-based cross-border remittance payments processor, teamed with Thunes, a global payments network based in Singapore.

August 2022: Tempo, a remittance app for U.S. immigrants, was launched by Future FinTech (FTFT) Labs in partnership with payments enabler Currencycloud. Through this alliance, FTFT Labs provides its clients with a multi-currency wallet that has lower fees than the competitors.

Remittance Market Segmentation

Remittance Mode of Transfer Outlook

• Digital


• Traditional (Non-digital)

Remittance Type Outlook

• Inward Remittance


• Outward Remittance

Remittance Channel Outlook

• Banks


• Money Transfer Operators


• Online Platforms (Wallets)

Remittance End Use Outlook

• Migrant Labor Workforce


• Personal


• Small Businesses


• Others

Remittance Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America