According to a recent report published by Allied Market Research, titled, “Remittance Market By Type, Channel, Application, and End User: Opportunity Analysis and Industry Forecast, 2019-2026”,the global remittance market size was valued at $682.60 billion in 2018, and is projected to reach $930.44 billion by 2026, growing at a CAGR of 3.9% from 2019 to 2026.
The major purpose of remittance is to ensure security of the money during money transfer from one country to another. In addition, many financial institutions across the globe have adopted remittance services to provide customer with transparency, a richer and data-driven ecosystem, and an efficient network of partners. Moreover, increase in cross-border transactions, mobile-based payment channels, and reduced remittance cost & transfer time drive the growth of the market.
In addition, surge in adoption of banking & financial sectors across the globe fuels the growth of the market. However, lack of awareness and decline of the remittance industry in Asia-Pacific is expected to impede the market growth. Furthermore, continuous technological innovations in the digital remittance industry as well as rise in internet and mobile penetration in this region are expected to provide lucrative opportunities for the market growth.
On the basis of remittance channel, the banks segment dominated the remittance industry in 2018 and is projected to maintain its dominance during the forecast period. Owing to their outsized financial power, banks are having significant control over remittance services in the market.
In addition, to gain competitive advantage over the other players, banks are rapidly adopting digital innovation and shifting towards digitalized cross-border money transfer services. Moreover, the growth of money transfer operator is expected to gain momentum space due to increased partnership between money transfer operators and banks to offer digital money transfer service. Thus expected to grow at a significant CAGR during the forecast period.
Based on application, the consumption segment dominated the remittance market industry in 2018 and is projected to maintain its dominance during the forecast period. Owing to large amount of money is remitted every month by the workers to their home country for food, clothing, and other expenditures, which drives the home economy.
For instance, according to the World Bank report in 2018, 70% of the money remitted by the workers to their home land is consumed for house hold expenses and for purchasing goods.Thus, representing a significant remittance market growth in the segment during the forecast period.
Furthermore, the investment segment is expected to grow at a significant CAGR during the forecast period. Remittance helps developed countries to regenerate new revenue stream by investing the remitted money in different investment schemes, which boosts the GDP of the country. In addition, increase in inflow of remittance in the country positively impacts its investment framework, which is providing a lucrative opportunity for the market.
By region, the South Asia/Southeast Asia remittance market was dominated by India in 2019 and is expected to maintain this trend during the forecast period. Due to large number of migrants working in different countries sends their earnings, and thus contributes toward the family as well as country’s GDP in the region. Furthermore, MENA remittance market was dominated by Saudi Arabia due to increased number of migrants led to massive outward remittance from the country.
Key Findings of the Study:
By remittance channel, the banks segment led the remittance market size in terms of revenue in 2018.
By application, the consumption segmented accounted for the highest remittance market share in 2018.
By region, South Asia/Southeast Asia generated the highest revenue in 2018.
The key players profiled in the remittance market analysis are Bank of America, Citigroup Inc., JPMorgan Chase & Co., MoneyGram International, Inc., RIA Financial Services Ltd., TransferWise Ltd., UAE Exchange, Wells Fargo, Western Union Holdings Inc. and XOOM. These key players have adopted various strategies such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations to increase their market penetration and strengthen their position in the industry.