Most conversations about the benefits of digital wallets focus on the benefits to consumers; safer than cash, quicker and more convenient than visiting the ever diminishing number of bank branches and how they eliminate little things like the need to input credit card details or a PIN to complete a purchase.
However, digital wallets aren’t simply about replacing cash and card on the high street, they have an ever increasing role to play when it comes to supporting a global workforce.
Globalisation sees remittance value hit record highs
An increasing number of people live or work abroad for extended periods of time and one thing they all have in common is a desire to send their money back home. While it’s unclear what impact Brexit will have on the British population, migration is forecast to increase for the foreseeable future and that gives a growing industry for financial transfer and FX transactions.
In April, The World Bank published a press release titled “Record high remittances to low- and middle-income countries in 2017” which outlined official figures and stated the stronger than expected recovery in remittances is driven by growth in Europe, the Russian Federation, and the United States. The rebound in remittances, when valued in U.S. dollars, was helped by higher oil prices and a strengthening of the euro and ruble.
The Bank estimates that officially recorded remittances to low- and middle-income countries reached $466 billion in 2017, an increase of 8.5 percent over $429 billion in 2016. Global remittances, which include flows to high-income countries, grew 7 percent to $613 billion in 2017, from $573 billion in 2016.
“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the Brief and head of KNOMAD.
One thing is for certain; and that is a focus on the business of FX and easing the remittance is going to be a key industry trend in the global economy for the foreseeable future.