Outlook of the industry
Remittances have been an enabler of economic growth. As we go through the second half of the year, I’m optimistic that the remittance industry will remain resilient and grow in the coming months.
While economic recovery is uneven across countries, the International Monetary Fund in its World Economic Outlook has projected the global economy to grow 6 percent in 2021 and 4.9 percent in 2022. [1] As economies around the world take steps to position themselves to emerge stronger, the remittance industry will continue to gain momentum and play a key role in supporting the economic rebound. Notably, in its latest estimates, the World Bank has predicted that remittance flows to low and middle-income countries may increase by 2.6 percent to $553 billion in 2021 and by 2.2 percent to $565 billion in 2022.[2] It is also expecting remittances in Latin America and the Caribbean and in South Asia to grow twice as fast.
While the projections and estimates are encouraging and reflect the industry’s potential, industry players need to stay agile and adapt to seize growth opportunities.
The rise of digital remittances
We know that the events in the past year, including the closure of borders and movement restrictions, impacted those who rely on traditional remittance models. Clearly, in the rapidly changing and unpredictable world that we live in today, it has become more critical than ever for businesses to embrace digitalization and transform their business models to thrive. For example, we are already seeing digital remittances picking up speed as migrant workers, and remittance receivers become more familiar with digital transactions.
As more industry players become more receptive to riding the digital wave to stay relevant, we can expect the flow of digital remittances to become more mainstream. The behavior of remittance senders and receivers will also evolve further with more significant usage of mobile wallets and digital currency transfer platforms over time, contributing to a more vibrant and dynamic industry. The ease of use, a larger number of trusted service providers, and the convenience of remitting money across borders will continue to become critical determinants contributing to market growth and a rise in cross-border transactions. Here at UniTeller, we remain committed to helping more money transfer operators, banks, fintech companies, international payers, and retailers to be a part of a connected digital financial ecosystem. We recognize a need to push for greater adoption of digital transactions for both senders and receivers of remittances. Apart from boosting the financial and digital inclusion of migrants, we also want to enable more businesses to leverage new technologies, increase merchant acceptance, and make digital platforms more universal across countries. UniTeller’s Remittance as a Service Digital Platform aims to achieve this by helping more companies offer digital-based solutions without the need to invest in developing a digital capability.
Towards a resilient future
Looking ahead, we believe digital cross-border payments will continue to contribute to solid growth in the years ahead. There will be significant opportunities to be seized by industry players as existing companies and new fintech players, and governments worldwide continue to improve the infrastructure and channels for cashless transactions. I’m confident that the remittance industry will evolve for the better and continue to stay resilient.
Remittances have shown they are a lifeline for migrants and their families worldwide. This is why at UniTeller, we will continue to forge more partnerships to continue to be a company that facilitates payments for individuals and businesses that move funds internationally. UniTeller is optimistic about the future. We see it as our responsibility to ensure that our consumers and business partners can leverage the best-in-class cross-border payment capabilities and solutions that will make a difference to their lives and businesses.
