REMITTANCES EXPLAINED: How funds are transferred across borders, and why digital is poised to disrupt this century-old industry

Remittance volume

Over the past few centuries, the world has become increasingly globalized. Immigrants are pouring into developed countries like the US, where many jobs pay higher rates than in their home markets.

As migrants shuffle around the globe, they have family members and friends back home who they continue to support through cross-border money transfers, called remittances.

Three remittance companies — Western Union, MoneyGram, and Ria — have dominated this market for years, operating a combined 1.1 million retail locations across 200 countries to facilitate cash pickups. However, digital-first players are emerging, leveraging mobile and online platforms to compete with the legacy firms on scale and fees. Fees remain a huge pain point for migrants sending money home, and offering lower fees gives startups a huge advantage.

In a new report from BI Intelligence, we size the total remittance market, the countries on both the send and receive sides that dominate remittance volume, and how remittances differ depending on payment mechanisms. We also look at the top challenges faced by remittance companies and what factors digital-first remittance startups are capitalising on to disrupt the traditional remittance model.

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Here are some of the key takeaways:

In full, the report:

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