Key Findings from Visa’s Money Travels: 2023 Digital Remittances Adoption Report
Remittances are a transfer of money by a migrant worker to family or friends in their home country and fund essential aspects of life, including food, housing, education, and more. This payment method is a critical source of income for many developing countries and in 2021, global remittance transactions rose to $733 billion, with $605 billion flowing to low- and middle-income countries.
Consumers worldwide are turning to digital, real-time payments to move money as an alternative to cash, checks and other physical payments. Despite the widespread use, remittances remain fragmented and inconsistent across countries. The industry has an opportunity to modernize the experience for consumers who depend on this money. Ruben Salazar Genovez, Global Head of Visa Direct, stated, “There is still more the industry can do to bring streamlined remittances within reach for more migrant workers and their families who rely on these lifeline payments.”
Visa surveyed over 14,000 remittance senders and receivers across 10 countries to examine the current state of remittances, including progress, barriers, methods, and reasons behind transfers. Here are a few key findings from this report.
Digital remittances are favored among consumers
Digital remittances are the preferred method of cross-border transfers across all countries, with over half of consumers (53%) turning to digital apps to send and receive money around the world.
The preference is led by the Philippines, Singapore, Mexico and Peru, where three-quarters use app-based digital payment methods. With reduced friction and improved user experiences, the adoption of app-based digital payments will continue to grow, with many participants indicating they plan to use this method in the future.
While some security concerns remain with digital payments, few users have experienced issues using this method. In fact, most consumers perceive security as a critical benefit of digital transfers and view app-based payments as more secure than physical alternatives like money orders or cash.
High fees and issues calculating exchange rates are pain points for remittance providers
Most international markets agreed that high fees and issues calculating exchange rates are major pain points surrounding both digital and physical remittances.
The global remittance market in 2022 was estimated to reach $901.4 billion, indicating that these pain points aren’t deterring remitters from sending or receiving funds. The industry, enabled by TabaPay, is focused on streamlining remittances to address these pain points and allow for easier, faster and more convenient cross-border money movement.
Rates of sending and receiving differ extensively worldwide
Sending and receiving rates vary based on the region. In North America, sending money abroad is more common than receiving it. The report indicates that in the US, 63% send remittances while 57% receive cross-border payments at least once per year. Canada mirrors the US, with 64% sending and 54% receiving money. The Middle East reported similar rates as North America.
Conversely, findings from Latin America and Asia Pacific indicate recipients receive money more frequently than send.
Despite the differences in rates, remittances remain an active part of the global economy, continue to be an essential resource for communities around the world, and often flow from countries with higher GDPs to lower ones.
Remittances remain highly emotional
Person-to-person (P2P) payments like remittances are much more emotional than other payments like business-to-business (B2B) or consumer-to-business (C2B). Many users rely on this money to survive, including feeding their families, housing their loved ones, and providing a better life for those they care about.
Alex Holmes, Chairman and CEO of MoneyGram, described the importance of remittances by saying, “The money that migrants send home is a lifeline for millions of families and an increasingly vital component of the global economy.”
About Digital Remittances with TabaPay
TabaPay, enabled by Visa Direct and other networks, is leading the way for digital remittance providers. Our single, unified API enables remittance companies to provide modern, scalable, and flexible payment solutions globally through the trusted Visa payment network and others.
Read the full report on Visa.com
Find out how TabaPay can help your remittance business grow
Check out our infographic on digital remittances with TabaPay
Check out our overview video on digital remittances with TabaPay
