New data from Juniper Research has found that international digital remittances will reach $525 billion by 2024, up from an estimated $332 in 2019.
According to the new research, Digital Money Transfer & Remittances: Domestic & International Markets 2019-2024, the mobile channel will become increasingly popular; accounting for 41% of international digital money transfers by volume in 2024, up from 33% in 2019.
Meanwhile, blockchain-based payments have the potential to increase digital payments further, as the technology has a high possibility of disrupting existing business models. Juniper recommends that traditional money transfer operators aggressively pursue partnerships to effectively leverage blockchain for future transformation.
Blockchain has Strong Potential in Remittances
The research found that by utilising a blockchain-powered network, operators can offer their users a much faster, cheaper and more transparent service. Solutions such as RippleNet and IBM Blockchain World Wire are set to transform the area, by connecting diverse sets of partners in different markets to enable more effective payments.
In order to succeed, blockchain platforms must focus on gaining as many partners as possible to increase the reach of their networks. This is an opportunity for traditional money transfer operators to change the way they operate; reorienting their business models around the benefits blockchain enables.
Traditional Players Still Need to Innovate to Meet Fintech Challenge
The research also found that the rise of fintech players, such as TransferWise and WorldRemit has meant that traditional players have had to evolve rapidly, with Western Union and MoneyGram both focusing on digital strategies going forward. However, mere digitisation of strategies is not sufficient. The research found that fintech players offer a superior user experience, with heightened transparency on fees a crucial differentiator.
Research author Nick Maynard explained: “While traditional operators have launched digital solutions, they have yet to adopt transparent pricing of transfers. Unless operators accept this requirement, they will continue to lose market share. Innovation must be the number one priority.”