The Digital Currency Shift in Cross-Border Remittances

As a new crop of FinTechs grew, the challenge of facilitating streamlined digital payments like cross-border remittances was a relief. Cross border remittances are considered a lifeline for many developing economies. Even though consumers have a wide array of retail choices for transferring funds abroad, they also encounter the chance of significant friction in sending and receiving funds. Consumers sending remittances have often met noticeable and high variable fees, especially with those attempting to quickly send funds abroad. Many consumers are now inclining towards cryptocurrencies as a payment option to avoid some

pain points of sending remittances. According to the research, many consumers prefer sending funds received as cryptocurrency as a chief motivator in choosing a payment services provider (PSP).

Forty-one million U.S. consumers transferred money abroad in the last 12 months, and more than half have increased the frequency and dollar amount sent.

23% of consumers make online payments with cryptocurrency

Cryptocurrencies are regarded as an alternative investment or digital payment method prevalent with the financially adventurous. Therefore, many consumers prefer a viable way due to flexibility in payment to send money abroad to loved ones in need. The study has revealed that 23 percent of respondents who make online payments abroad to friends or family use at least one kind of cryptocurrency. In addition, 13 percent of consumers stated that cryptocurrencies were their most used payment method for online cross-border remittances.

Majority of consumers own cryptocurrency at about four times the rate of the U.S. population

Half of all consumers using remittance services own cryptocurrencies and active remittance service users. 51% of consumers making cross-border P2P payments currently hold cryptocurrency. Nearly half of these consumers have purchased cryptocurrency for transactions of any kind. Consumers demand instant fund transfer and favour options to transfer money quickly and fund their payments in various conventional methods. It is vital for many consumers as it increases the frequency of sending funds overseas, including the costs and speed involved in each transaction. 

Cryptocurrency users are frequent adopters of innovative payment methods

The decades-long shift in traditional money transfer methods from in-person retail to digital options has permitted open new possibilities for consumers to send remittances other than conventional forms of payment. The adoption of cryptocurrencies tends to remove friction from the payments process. Nowadays, consumers use cryptocurrency to send their cross-border remittances into a mobile wallet. Hence, mobile wallets offer instant contactless payments, which are convenient and easy methods consumers seek. When compared, mobile wallet use remains low among consumers who send cross-border remittances and who do not use cryptocurrencies. As a result, only 30 percent of those who choose bank transfer remittances send them to mobile wallets, while others send these directly into another bank account i.e. 52 percent. 

Consumers’ brand trust levels on P2P 

Trust is the deciding factor in consumers’ choice of a payment

service provider (PSP). Consumers define trust in different ways. According to the report, a recognisable brand name increased their confidence level when selecting a PSP for sending cross-border remittances. While those consumers who choose a bank for remittances cared less about brand names. In addition, other critical factors in assessing a PSP’s trustworthiness include security and receiving funds on the same day.

On a positive note, the availability of cryptocurrency payments and transfers has become a vital factor for some consumers as they pick a PSP. So, 24 percent of consumers would change their option if receiving payments in cryptocurrency were available. At the same time, other 22 percent would make payments in cryptocurrency if it was available. 

Conclusion

PSPs seek to offer more value in improved remittance services to consumers. High fees delays are under pressure to find a payments solution that is swift, secure and frictionless. A large percentage of consumers are remitting due to an urgent financial need of a friend or family member. Many people are shifting their routine payments activities to PSPs, enabling them to send funds using cryptocurrencies and digital payments to send funds to a mobile wallet. Convenience, security and trustworthiness are key determinants of consumers’ choice. PSPs have to realise the right mix of features and gain benefits as the market opportunity for seamless cross-border payments solutions grows.

ATL Money Transfer, a leading money transfer service provider, brings this article to you. Generally, transferring money abroad to loved ones can be a bit complex. But at ATL Money Transfer, we handle the whole process online to avoid queues, paperwork and hassle-free. We respect your reason for sending money, and it couldn’t be easier to have the perfect financial backup that ATL Money Transfer offers. To know more about us, click on this link: https://www.atlmoneytransfer.com/.

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