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Remittances, or cross-border peer-to-peer (P2P) money transfers, hit a record high of $613 billion globally in 2017, following a two-year decline. And the remittance industry will continue to grow, driven largely by digital services.
Several factors will fuel digital growth globally, such as increased smartphone penetration, greater demand for digital transactions, and an overall need for faster cross-border transfers. And with the shift to digital comes an audience of younger, digital-savvy customers using remittances — a segment that companies are looking to target.
As a result, the global remittance industry is becoming increasingly competitive for firms to navigate, with incumbents like Western Union and MoneyGram competing for the same pool of customers as digital upstarts like WorldRemit and Remitly. And in order to win, companies across the board will need to prioritize the four areas consumers value most in remittances: cost, convenience, speed, and safety.
In The Digital Remittances Report, Business Insider Intelligence will identify what young, digitally savvy users value in remittances. We will also detail the concrete steps that legacy and digital providers can take to effectively capture this opportunity and monetize digital offerings — the primary growth driver — to emerge at or maintain their presence at the forefront of the space.
The companies mentioned in the report are: MoneyGram, Remitly, Ria, Western Union, WorldRemit, TransferWise, and Xoom, among others.
Here are some key takeaways from the report:
- The global remittance industry recovered from a two-year decline in 2017 to reach a record $613 billion in transfer volume. That growth will continue and will be fueled by digital remittances, which Business Insider Intelligence expects to grow at a 23% CAGR from $225 billion in 2018 to $387 billion in 2023.
- There’s a new segment of customers that both legacy and digital firms are competing to grab share of. Young, digital-savvy consumers are the customer segment that all firms are vying to reach, which is creating a highly competitive dynamic. The needs of those consumers will precipitate transformational change in the industry.
- We’ve identified several tangible steps firms can take to improve in four key areas — cost, convenience, speed, and security — to not only attract but also maintain this customer segment to align with their preferences and ultimately win in the space.
In full, the report:
- Outlines the global remittance landscape and sizes the opportunity that the industry presents.
- Identifies the new audience for remittances and future drivers of the remittance space going forward.
- Discusses four key areas that providers can focus on — cost, convenience, speed, and security — to improve offerings and ultimately capture that shifting audience.