• Research from leading firm Juniper finds that an increase of $193bn is expected over the course of the next five years
• Mobile money transfers are also expected to surge in the same period, this time by 7% – while blockchain and disruptive start-ups are also on rise
• “Innovation must be the number one priority”, says Nick Maynard, the author of the report
A new report from a leading firm exploring the digital remittances market has suggested that there may be a rise of almost $200 billion in international digital remittances over the next five years.
Juniper Research, a firm which researches digital technologies, found that while there is currently a $332 billion per year market for digital remittances, this is likely to leap to $525 billion in 2024.
Juniper’s report, entitled Digital Money Transfer and Remittances: Domestic and International Markets 2019-2024, flagged the role of mobile international money transfers in the changes.
The report claims that cross-border payments conducted through phones and other mobile devices are set to spike. While mobile is currently responsible for 33% of the overall volume of payments, this is set to rise to 41% by 2024.
The role of blockchain in the global remittances markets was also explored by the author.
Firms aiming to cater to the cheaper end of the remittances market were advised by the report to invest in blockchain.
Specifically, it was suggested that RippleNet and other leading blockchain services could improve money transfer speed and cut costs thanks to their decentralised networks.
Many firms in this space are already working alongside Ripple. In May of this year, for example, it was announced that remittances firm Ria Money Transfer, which is owned by Euronet Worldwide, would begin to use Ripple to improve its remittance services offer.
“Ria’s integration with Ripple serves to build rails for an innovative payment infrastructure that seeks to provide easier access to potential partners”, said Juan Bianchi, Euronet’s Money Transfer Segment CEO, at the time.
The report also specifically highlighted the impact that the start-up scene has had on the remittances market. It pointed out that the rise in disruptive financial technology firms which had broken into the sphere, such as WorldRemit, were causing more established firms to change their behaviours. It had, the report said, caused tangible knock-on effects for corporations such as Western Union. However, it also claimed that it was not enough for firms such as Western Union to adopt digital-friendly strategies – and that, fundamentally, it came down to prices.
The author of the report, Nick Maynard, emphasised this element of the findings.
“While traditional operators have launched digital solutions, they have yet to adopt transparent pricing of transfers”, he said.
“Unless operators accept this requirement, they will continue to lose market share. Innovation must be the number one priority”, he added.
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