Global digital remittance is the electronic transfer of money between individuals or companies. Most of the funds are sent to families in their home countries. Imagine having people depending on you to send them money abroad and then suddenly you cannot because of the covid-19 restrictions. Many people might have been stranded at the beginning of the pandemic. However, digital remittance companies like Western Union accelerated their digital remittance policies to help with the situation. The 4-year process of global digital remittance had to be squeezed into two weeks. With many people out of employment around the world, there was a constant need for the well-off to send money to their families back at home and global digital remittance processes had to be made easier to access.
For example, in a country with many immigrants like Saudi Arabia, there is a constant need to move money around the world to families and businesses due to the significant global digital remittance market. Through the partnership between Western Union and Saudi Arabian Monetary Authority, there has been a step taken to promote Fintech and global remittance. The vision of the partnership was to help promote the creativity and sustainability of financial services. Most of the international money transfer transactions that go through digital remittance companies are supported by banks. With such a partnership, Saudi Arabia becomes one of the countries that support global digital remittance. Digital remittance companies are looking to be the white label provider for banks by giving banks a solution to move money between countries safely and quickly. The idea is to enable people to receive money as quickly as possible while still reducing the possibility of fraud.
In the recent past, Western Union has seen double-digit growth in the pandemic because many people are continually using global remittance services. The digital transfer increased from $600 million to around $850 million between 2019 and 2020. That shows that many people need the service and are subscribing to digital remittance services to transfer money globally. At the beginning of 2021, the digital revenue rose to about $250 million, which is a 45% increase in quarterly revenue. This shows that the company can reach the $1 billion mark by the end of the year.
All this growth in digital remittance companies comes from the accelerated digital transformation. Most of the companies now have faster registration, improved visibility into transaction statuses, and better web page loading performance. The improvement of services pays off. There have been many transactions between customer to customer because of the new sign-ups, which turn into increased revenue collection.
The strong customer-to-customer transactions have seen most of the digital remittance companies center their marketing around improving these services. The business model has seen a lot of growth in the pandemic.
Through digital partnerships with banks and other facilities, there has been an increase in the success that stems from opening cross-border digital remittance platforms to third-party representatives of banks, big tech companies, and financial institutions. For example, the partnership between Western Union and SAMAs of Saudi Arabia has helped many immigrants send money to their home countries. . Many companies opening their platforms have seen a general growth in the digital global remittance services.
The countries that lead in the digital growth that is transforming global digital remittance apart from the USA are:
- United States
- United Kingdom
These countries have made it easy for global remittance companies like Western Union to operate within their laws and enable people to send money globally. The idea is to have as many agents and third-party agents to reduce the time and increase efficiency in global digital remittance. The countries have suitable laws that enable people to send and receive money globally.
Many are asking whether the efficiency of these global remittance companies will remain after the pandemic. The answer is yes, because there has been a lot of money transfer and transactions efficiently functioning. This means that there will be improvements by companies to help them increase customer services.