In a globalized world where labor follows capital, the remittance industry has been growing constantly in both volume and users. Traditional providers like banks and money transfer companies have been charging high fees for their services which creates opportunities for alternative digital platforms and decentralized cryptocurrencies.
Digital Remittance Volume Projected to Touch $143 Billion by 2023
According to numbers gathered by market data provider Statista, the total transaction value of digital remittances, cross-border transfers made over the internet, has reached almost $95.96 billion in 2020, representing a year-over-year increase of more than 21%. At the same time, the number of users in this segment of the remittance market has been estimated at 8.5 million (+20.5% yoy). Both indicators are projected to increase by 2023, to over $143 billion in volume and 13.2 million users.
Total transaction value in the digital remittance segment. Source: Statista.
Last year, the largest share of users (32%) were between 25 and 34 years old, and another 25% were aged 35-44 years, a majority from labor-active age groups. The average annual transaction value per user in the digital remittances segment amounts to a little over $11,233 according to the data released this year. Five countries, United States, Switzerland, Saudi Arabia, Germany, and China, top the transaction value comparison chart. With a total transaction value of $21.297 billion, the U.S. is the pronounced global leader and Switzerland comes in second with $7.969 billion.
Global comparison, transaction value. Source: Statista
The authors of the report note that remittances often occur on a regular basis and most of the user groups are not inclined to change their fund transfer provider very often.