In today’s interconnected world, digital remittances and cross-border fund movements in Asia have become an integral aspect of international finance.
Billions of dollars travel across the globe every second, and the vast majority of these transactions involve individuals, particularly migrant workers, sending money to their loved ones back in their home countries.
These remittances are a lifeline for families on every continent, providing vital support for everyday needs and important life events.
Remittances to low- and middle-income countries are expected to grow by an estimated 3.8 percent to reach US$669 billion in 2023, highlighting the growing importance of these cross-border transactions.
Regional trends in remittance flows
Growth in remittance inflows varied across regions, with positive growth recorded in Latin America and the Caribbean, South Asia, East Asia and the Pacific.
Latin America and the Caribbean saw an increase of 8 percent, while South Asia, East Asia, and the Pacific saw growth rates of 7.2 percent and 3 percent, respectively.
Visa Money Travels: 2024 Digital Remittance Adoption Report – Digital remittances on the rise in Asia
However, not all regions saw growth in remittance flows, with the Middle East and North Africa seeing a second consecutive year of decline of 5.3% due to a sharp decline in remittance flows to Egypt.
Similarly, Europe and Central Asia experienced a decline of 1.4% in 2022, after a strong increase of over 18%.
Visa’s Money Travels: Digital Remittance Adoption Report 2024
To gain a deeper understanding of the progress and challenges in the remittance industry, visa The comprehensive survey surveyed approximately 45,000 remittance senders and recipients across 20 countries, including the United States, Canada, Mexico, Peru, Brazil, France, Poland, the United Kingdom, Germany, Denmark, Sweden, Norway, the Philippines, Singapore, Australia, Japan, China, India, the United Arab Emirates and Saudi Arabia.
The Money Travels: 2024 Digital Remittance Adoption Report delves into remittance patterns, digital app adoption and barriers to frictionless payments, providing valuable insights into the current state of the industry.
Interestingly, the report found that humanitarian needs are sometimes given more weight than personal unanticipated needs, highlighting the interpersonal impacts of digital transactions.
Key findings and trends
Visa’s report highlights several key findings and trends in the digital payments space, one of the most notable being the continued increase in adoption of digital apps. Digital Remittance It emerged as the preferred method among surveyed consumers in all countries.
The move to digital platforms is driven by several factors, with security being a key benefit. Digital payments It is perceived to be more secure than other payment methods, giving users peace of mind when sending and receiving funds.
The report also reveals the main reasons behind remittance transactions, with helping those in need, covering education costs and supporting healthcare costs ranking as the top motivations for sending money.
But the remittance industry is not without its challenges. Senders often face pain points such as high fees and hidden charges that catch both senders and recipients off guard.
Moreover, the speed of sending and receiving remittances varies widely across countries and has slowed alarmingly overall due to a variety of economic factors.
Digital remittances growing in Asia
Visa’s report highlights that digital remittances are becoming more popular, with the movement of money becoming more digital than ever before.
Transferring money between individuals can make a big difference to families, communities and economies around the world.
But cross-border remittances often come with a variety of pain points that prevent funds from flowing smoothly. In addition to the financial aspects, Visa’s report also delves into the humanitarian impact of digital payments.
For the first time in the 2024 report, money transfer The payments were sent for humanitarian needs, highlighting the human-to-human impact of these digital transactions.
For many respondents, helping those in need emerged as a key motivation, improving their outlook, supporting the livelihoods of those in crisis and covering education and health costs. The survey findings highlight the vital role that remittances play in uplifting and providing support to communities during difficult times.
Vira Platonova, chief revenue officer and senior vice president of global money movement at Visa, highlighted the personal nature of money movement and Visa Direct’s vision to create new opportunities for financial inclusion and wealth building by simplifying cross-border payments and streamlining the movement of funds.
While research shows a surprising acceleration in digital payments, Platonova acknowledges there is more the industry can do to make remittances more efficient for migrant workers and their families who rely on these lifeline payments.
This statement is to ensure that Visa continues to improve the payment environment. Cross-border trade It will be more accessible and efficient for everyone.
Explore Asia Pacific
The Visa report also provides an in-depth analysis of remittance trends in the Asia-Pacific region, where participating countries include China, India and Singapore, which are global leaders in remittance movements.
Among respondents, they most frequently send and receive remittances at least once a year. In ChinaIndia and Singapore follow closely behind, with Singaporean respondents actively participating in cross-border trade with China, Malaysia and Australia.
Visa Money Travels: 2024 Digital Remittance Adoption Report – Top Reasons for Remittances
Meanwhile, the top countries from which remittances are sent by those surveyed in India include the US, Australia, Canada and the UK.
Interestingly, while remittance frequency remains high in Asia Pacific, the report found that adoption of digital remittances, tracked in previous studies, has declined year-on-year in the Philippines and Singapore.
The findings suggest that while remittances continue to play an important role, transaction volumes may fluctuate due to a variety of factors.
Digital apps lead the way
Across the Asia Pacific region, digital apps have emerged as the primary method for sending and receiving international remittances among those surveyed, followed by digital transfers from physical locations.
Digital adoption is moderately high in the region, with around three-quarters of remittance users in India, the Philippines, China and Singapore using app-based digital payment methods to send or receive international remittances.
High usage of digital apps is primarily driven by ease of use and security: Respondents in the Philippines, India and Singapore cited ease of sending and receiving data as the top reason for using digital apps.
Safety was also a top concern, with respondents in India, the Philippines and Singapore citing it as the top reason for choosing a digital platform.
In China, the safety of sending and receiving money was rated less highly, followed by “sense of security,” indicating the importance of safe transactions.
Barriers and challenges to digital remittances in Asia
Despite the growing popularity of digital remittances, Asia Pacific still faces certain barriers and challenges. High fees emerged as the main pain point for digital remittance users across all Asia Pacific markets surveyed.
A significant proportion of respondents in most countries in the region said they had been offered a free transfer when sending cash, cheque or money order, only to later discover hidden fees.
In China, respondents believe that receiving a cheque or money order through the mail is the safest way to receive money. They believe it is safer than cash due to traceability and the ability to replace the money order if lost.
The survey findings highlight the need for more education and awareness regarding the security features and benefits of digital remittance platforms.
Reason for remittance
The primary reasons for sending and receiving remittances vary widely across Asia, with the majority of people surveyed in India, Australia and Singapore citing humanitarian needs as their main motivation for sending remittances.
In China and India, respondents said they sent money to improve their prospects, a higher proportion of whom said this was the reason than in other Asian markets.
China also stands out when it comes to sending or receiving money for accounts or investments, with a significant proportion of respondents citing this as their main reason.Interestingly, among Australian respondents the main reason for receiving money from overseas is to send money to yourself from your own accounts or investments.
The future direction of digital remittances in Asia
Visa Money Travels: 2024 Digital Remittance Adoption Report: Digital Platformwe discuss the key motivations behind remittance transactions and the challenges that must be addressed to ensure a seamless and secure cross-border remittance experience.
As the world becomes increasingly interconnected, digital remittances will continue to play a key role in connecting families across borders and providing vital support to communities in need, particularly in the Asia-Pacific region.
The insights and findings from the Visa report will serve as a valuable resource for industry players, policymakers and consumers as they work together to shape the future of the remittance industry and unlock the full potential of digital platforms to drive financial inclusion and economic growth.
Featured Image Credit: Free Pick
