Global remittances reached a record high of $613 billion in 2017. After a two-year decline, cross-border P2P (peer-to-peer) money transfers had reached new heights. Going forward, global remittances are only expected to increase.
Global remittances have long been a significant source of income for many people around the world. Recent years have seen some major trends develop, which will continue to have a huge impact on the flow of remittances. Right now, wire transfers are still extremely popular as a means to send remittances. However, there are a few problems with the current system. Currently, 7% of remittances go to intermediary services, which is a challenge seeing as many developing countries rely on remittances as a significant portion of their economy, according to the Pew Research Center. Remittances accounted for 30% of Kyrgyzstan’s GDP in 2016, for example. Given this information, 7% of $613 billion is not an insignificant figure, as it can make a big difference.
Going forward, we can expect to see global remittance totals grow, spurred in large part by newer digital services. There is an ever-growing demand for international money transfers, and smartphone use is quickly becoming ubiquitous around the world. These two factors should be more than enough to push remittance services forward.
