Remittance plays a massive role in the economic development of the country. Hence the growth of remittance is crucial for the socio-economic development of many receiving countries. That is why the UN included remittance as one of the main goals of Sustainable Development Goal (SDG).
With globalisation, people are opting for different careers and opportunities. With the variety of options, the migration rate is also increasing; consequently, remittances are also growing. According to some researches, remittance flow to the low-middle income countries reached around 554$ billion in 2019. With the advancement of technology, remittance industries are finding more ways to develop the future dynamics of the industry.
Growth driver of remittance
Migration, digital remittance, advancement in technology are significant factors that drive growth in the global remittance industry.
In this blog, I will discuss briefly the factors driving maximum growth in the remittance industry.
Digital Remittances and Their Impact
Digital remittance has an outstanding contribution to the growth of the remittance industry. The development of digital remittance outnumbered the overall growth rate observed within the global remittance industry. Nowadays, we cannot think of a life without the internet. Hence, people gradually started trusting the internet to remit money. In fact, with the increased rate of mobile penetration, mobile money transfer has seen an upsurge.
The main reason for this growth is convenience, fast, secured and low transfer fees. Experts foresee that digital remittance’s annual compounded growth rate will reach up to 23.8% by 2025.
In 2017, the Asia-Pacific region had almost 3.9 billion internet users, approximately 51% of global penetration. Thus with the growing population, internet penetration is also increasing. Therefore instead of standing in long queues, people can now transfer money online sitting at home. Digital remittance offers such convenience, and hence the volume of global remittances is also growing. ATL Money Transfer is one such digital remittance service. Thanks to our easy user interface, you can now send money anywhere you want to in three simple steps.
Migrant workers send part of their income back home to their loved ones; this money is remittance. Hence, remittance and migration are co-related—globalisation and advancement in technology spur migration, which positively impacts the global remittance industry.
According to a report (2017), India was the largest remittance-receiving country globally, with migrant workers sending home 69$ billion, followed by China and the Philippines.
According to a UN report, migration has risen at an average of 2.3% since the turn of the millennium. United Nations is trying to put down the cost of remittance, which will help the migrants save some money in the pocket. This cost reduction will increase the volume of remittance globally. It will also positively impact the economic development of the countries that depend primarily on remittance inflows.
Thus increase in migration is directly related to the growth of the remittance industry.
Technology also has a huge role to play in driving the growth of the remittance industry. Today technology has improved the remittance experience forming a robust network. Migrants now can transfer money to a bank account, collect cash, and get it delivered at the doorstep or added to mobile wallets. Fintech firms and telecom infrastructures growing in different regions are also responsible for this growth.
Besides, migrants can now transfer money instantly with the blessings of technology. This process helped migrants solve their financial requirements, leaving a significant impact on international remittance growth.
Remittance is a vast source of income for developing and under-developed countries. Hence, tracking the factors responsible for the growth of the remittance industry is crucial for further improvement and research.
About ATL Money Transfer
Fintech firms also play a considerable role in the growth of the remittance industries. Software like ATL Money Transfer helps the migrant send money home securely, hassle-free and at honest costs.
In ATL, we care about your hard-earned money; therefore, we offer you the lowest transfer fee with zero hidden cost. For further information, visit our website.