| How Technology is Powering the Global Remittance Industry

How Technology is Powering the Global Remittance Industry

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Remittances are thriving now more than ever. 

Thanks to the rise of modern technology, countless individuals, families, and communities are receiving the financial support they need in a fast and secure manner. 

At UniTeller, we’re confident that these positive trends will only continue. As we head into the second half of 2022 and beyond, our team is thrilled to facilitate the expansion of remittances throughout our global economy. 

To that end, we believe it’s important to reflect on how far remittances have come, and how essential they truly are in the modern world, and how we plan to continue innovating and advancing in our industry for years to come. 

The State of Remittances in 2022

Remittances are a monetary lifeline for migrants to their families. They are symbols of hope, love, and generosity.

As such, they rank among the most powerful financial tools in the world, particularly for low-and-middle-income countries. 

In fact, even the smallest increases in remittances can drive a substantial decline in poverty. According to the Asian Bank Development Institute, “a one percent increase in international remittances as a percentage of gross domestic product can lead to a 22.6 percent decline in poverty gap ratio.”

While helping to close the poverty gap, remittances also promote access to healthcare, increased savings, and even school enrollment rates.

On a larger scale, remittances are often integral to a country’s gross domestic product (GDP).  

As of last year, remittances provided over five percent of the GDP for 54 individual countries. And in nations like Lebanon and Somalia, remittances comprised nearly one-third of total GDP

When compared to other sources of international aid, remittances reign supreme – and they have for many years. In fact, since 2018, remittances have consistently eclipsed foreign direct investment (FDI)

In total, the global remittance industry reached $589 billion in 2021, and by the end of 2022, it is expected to exceed $630 billion.

This exponential growth shows no signs of stopping, and experts anticipate the remittance market will exceed $745 billion in 2025.

While there are undoubtedly many factors contributing to this narrative, digital innovation is most responsible for the international surge in remittances. 

A New Era of Accessibility and Affordability 

Until recently, global remittances have been hamstrung by legacy technology, prohibitive costs, and slow transaction speeds.

Such issues are especially evident in low-and-middle-income countries, where outdated infrastructures often fail to support remittance payments.

For example, the additional cost of sending a USD $200 remittance to Sub-Saharan Africa is roughly eight percent – nearly three times above the UN’s Sustainable Development Goals

In total, the average remittance costs an extra six percent of the total amount sent (as of December 2021). 

Migrants have sacrificed enough and simply don’t need the additional financial burden to support their loved ones. Fortunately, even the smallest reductions in fee structures can have lasting benefits for consumers. 

According to Dilip Ratha, Head of KNOMAD, “lowering remittance fees by just two percentage points would potentially translate to $12 billion of annual savings for international migrants from low-and-middle-income countries (LMICs).”

Of course, the pandemic only exacerbated these ongoing challenges, as stay-at-home orders made it more difficult for underbanked customers to send and receive cross-border payments. 

The situation looked uncertain for all parties involved. 

But then, the unexpected happened: the meteoric rise of the digital economy – and the proliferation of smartphones – helped the remittance industry overcome the international health crisis. 

As the world went remote, remittances soared. 

In fact, remittance flows in 2020 not only defied financial forecasters, but they signaled a turning point for the payment industry’s future. 

According to Forbes Magazine, 2020 was “the biggest catalyst for the growth of digital remittances ever. Four years of digital growth was compressed into two months in the money transfer space.

The numbers speak for themselves. In April 2020, mobile app tracking company Apptopia reported a staggering 52 percent increase in downloads

Smartphones propagated practically overnight. In India, for example, smartphone penetration was just 22 percent at the end of 2017. 

But in 2021, that number nearly tripled to 60 percent

As of today, countless consumers around the world are enjoying a faster and more reliable way to send money to their loved ones. 

After all, global remittances can now be sent in a matter of minutes – wherever and whenever consumers choose. 

Where We’re Headed

At UniTeller, we have one definitive goal: to build on the progress that’s been made and continue making remittances as accessible, affordable, and reliable as possible. 

It’s abundantly clear to us that the global community depends on each and every payment, and we’re doing everything we can to perpetually advance our technology and expand our reach. 

In light of the United Nations’ laudable Sustainable Development Goals, UniTeller remains fiercely committed to providing great exchange rates and low fees to all of our customers. 

And while our state-of-the-art technology plays a role in this mission, so do our partnerships.

To that end, UniTeller recently began a formal alliance with Tranglo, one of the leading cross-border payment service providers in Asia Pacific. As a result of this partnership, UniTeller can now reach 13 Asia Pacific markets, including Bangladesh, India, Indonesia, and Nepal – adding over 58,000 cash pick-up points, more than 1,100 account deposit banks, and nine e-wallet platforms. 

We’re equally proud to meet the growing demand for digital payment capabilities across the continent of Africa. 

By partnering with Singapore-based global payments network, Thunes, UniTeller adds account deposit service with 552 banks and e-wallet service with 28 operators across both Africa and Asia Pacific at large. 

Such partnerships are essential to increasing the accessibility of remittances while progressively reducing their cost. 

We’re thrilled to continue this journey, and we welcome you to join us. 

Partnering With UniTeller

When it comes to transferring money and international bill payments, UniTeller maintains the highest standard of excellence.

As a fully-licensed money transmitter in the United States (and soon in Canada), UniTeller remains intensely committed to providing payment services with a uniquely transparent and flexible business model.

By partnering with UniTeller, you’ll also gain access to in-depth training, marketing support, and our multilingual Customer Service department, available seven days a week.

As a UniTeller Selling Agent, you will have total confidence in the speed and safety of the money transfer and international bill payments services you provide. Also, you’ll have access to our extensive network of over 200,000 paying locations and billers in over 80 countries worldwide.

It’s fast. It’s reliable. And it’s trusted by countless customers and businesses. Want to learn more about becoming a UniTeller Selling Agent? Click here to get started.