Trends in Global Remittances

by Aug 5, 2018Financial Research


Global Trends in Remittance

The remittance market continues to play an important role in the economic growth and livelihoods of people across the world. Remittance inflows in developing countries often constitute a significant share in their GDPs, and are much higher than development aid and much more stable than private capital flows. In 2018, the World Bank[1] estimated that US $689 billion was sent in global remittances, $528 billion of which was sent to developing countries. India has the largest inflows, with remittances estimated at $80 in 2018, followed by China ($67 billion), Mexico and the Philippines ($34 billion each), and Egypt ($26 billion). This figure is expected to grow by 3.7% to US $715 billion in 2019.

The largest money transfer providers in the remittance industry are Western Union, Moneygram, Transferwise, Paypal/Xoom and Ria. The graphs below, from analysis conducted by indicate that Western Union continues to dominate both traditional and digital (online) money transfers.


Figure 1: Ranking of Money Transfer Providers by Revenue[2]


Western Union recorded U $5.5 billion in revenue in 2017, with over $150 billion in principal sent worldwide through 550,000 agents, engaging 150 million customers.  Although they are the biggest player in the market, Western Union has seen relatively little growth in total revenue in the last 5 years. As a result of this, the company has been pushing to branch out into new payment services. Western Union’s biggest competition are newcomers who are offering a simpler service delivery format, which WU cannot respond to quickly due to the expanse and complexity of its network of over 500,000 agents.

Ria is a subsidiary of Euronet Worldwide and operates throughout North America, Latin America, Europe, Asia, Africa and online. The company earned US $878M in revenue in 2018, with over $38.8 billion in principal sent worldwide. Started in 1987, Ria is now the 3rd largest money transfer service in the world. Last year it recorded over 92 million transactions through over 343,000 agents. The company currently has a partnership with Walmart, where customers can transfer throughout any of their 4,600 stores at competitive prices.


 Digital Remitters

Transferwise, the largest new FinTech entrant in the money transfer space was started in 2011 and has seen phenomenal growth since. In 2017 it launched a borderless account, which offers its customers virtual bank accounts, which routes payments from third parties to physical accounts via traditional transfer. Their growth can be attributed to their peer-to-peer business model, which facilitates reduced money transfer costs through low and transparent fees.

Xoom, which was acquired by Paypal in 2015, allows senders from the United States and Canada to remit to customers in over 131 countries, through a desktop or mobile app. Consumers can send money, pay bills and reload mobile phones with Xoom and PayPal products and it costs on average just 3.93% of the amount sent compared with World Bank data, which indicates that the average cost of sending a remittance is 7.45%.

WorldRemit sends to more than 145 countries around the world and customers can choose whether their transfer is received as a bank deposit, cash pickup, mobile money or airtime top-up. Headquartered in London UK, the FinTech company was founded in 2010 and backed by well-funded venture capital companies. The company stated that it expects to have revenues of US $121 M in 2018.

Remitly which was started in 2011, was another well-funded FinTech startup that now facilitates persons in the U.S., U.K. and Canada to send money to 11 countries across the world. As a digital remitter, the company’s website or app facilitates payments via bank transfer, debit or credit card and recipients can have the money deposited to their bank account, or pickup at a Remitly agent[3]. Remitly charges small fixed fees instead of a percentage of what customers send. The company’s service fees to send money abroad can range anywhere from $0 to $3.99, depending on how fast customers want it to be – either via Express or Economy delivery options.[4]

Threats to the Remittance Business

As access to digital technology increases, smart-phone penetration grows and the cost of traditional remittances remains high, companies have to consider new way of thinking about the money transfer business by considering the following:


⇒Lower fees: There are significant costs associated with transferring money through traditional channels, such as money transfer agents, bank wire transfers and money orders. According to research undertaken by PayPal Inc. in 2016, a 3.52% percentage point cost savings from switching to digital remittances is equivalent to $21 billion in cost savings. As technology improves and competition increases, it is anticipated that the cost to send money across the world will be reduced.Several businesses like Paypal and Transferwise are sending transfers at rates much lower than the global average (to send $200) of 6.9% in Q3 2018. WorldFirst has a “Best Rate Guarantee” policy, in which the customer can approach the company with a current quote from any other provider, and they will promise to beat it. They also offer hedging options such as Forward Contracts and no transactional fee for transactions of $10,000 or above. The United Nations further supports this digital movement, through its Sustainable Development Goals target of lowering remittance costs to less than 3% by 2030

⇒Increased competition from technology, which is enabling upstarts to ramp up new operations quickly, is also a threat to the larger MSBs. The use of digital innovations like mobile payments and virtual accounts will force companies to innovate in the way money is sent across the globe. This can be seen in the raid growth of FinTechs like Transferwise and Remitly and the stagnant revenue of traditional MSBs like Western Union.


De-risking by banks continues and fines for lack of compliance with AML/CFT regulations have increased since 2008. Money transmitters have resorted to using non-bank channels to transfer funds, which has increased costs and risk of theft and forfeitures.

Exclusive partnerships between national post office systems and a single money transfer operator also stifles competition and forces fees to be raised. [5]


Recent Strategic Partnerships

 Western Union & Other Global Market Players

Leading remitter, Western Union, has also formed partnerships in the various countries it serves. Among these include WeChat Pay (China), Yandex Money (Russia) and Hyperwallet (USA). Details of each are highlighted below:

  1. WeChat Pay – In April 2018, Western Union added WeChat Pay, alongside its “WU GlobalPay for Students” product offering. This feature will enable academic institutions to offer Chinese students studying abroad with a greater variety of payment options, such as WeChat Pay, Alipay, UnionPay and Tenpay. This is a significant stride for Western Union, considering that WeChat Pay continues to dominate the digital payments sector in China. This is evidenced by data from the United Nations[6], indicating that during the period from 2012-2016, payments from WeChat rose from circa US$11.6B to US$1.2T.
  2. Yandex Money – This service was started as a joint venture between Russia’s leading search engine, Yandex, and Russia’s largest bank, Sberbank. Yandex Money is an e-wallet that hosts a virtual MasterCard. Customers can utilize this product through mobile app or Apple Pay at any merchant or online store that accepts Yandex.
  3. HyperWallet –Hyperwallet, based out of California, is an online payment solution for collaborative economy and marketplace companies. In 2011, the company was approached by Western Union Business Solutions to embed its technology into Western Union’s B2B (business-to-business) electronic wallet initiative. This service would allow for small and medium-service enterprises to quickly transfer money without the hassle of entering bank routing details to effect a payment. All required from the sender would be the recipient’s email address and a security question/answer pair.

WorldRemit & JMMB

UK-based WorldRemit partnered with JMMB in May 2017 to deliver an online remittance transfer service. Using the WorldRemit app or website, customers can send money to all bank accounts in Jamaica via JMMB Money Transfer. Funds sent by 3 p.m. can be accessed on the same day, and within 24 hours for all other transactions.

Ria Financial & Ecobank Ghana

In March 2017, Ria Financial established a partnership with Ecobank Ghana, in order to facilitate a remittance system for Ecobank. Customers are not required to possess an Ecobank bank account to utilize this service and can opt for direct bank transfer or in-person cash transfer. Those living in rural areas or those lacking formal banking services can particularly benefit, as cash transfers can be redeemed in one of the bank’s 77 branches or 167 sub-agent locations across Ghana.


[1] Accelerated remittances growth to low- and middle-income countries in 2018 –

[2] Money Transfer Startups: race against time? Sept 28, 2018.

[3] – Review of Remitly –

[4] Remitly Shaking Up Billion Dollar Remittances Industry Adds Massachusetts –

[5] Accelerated remittances growth to low- and middle-income countries in 2018 –

[6] “Social Networks, e-Commerce Platforms and the Growth of Digital Payment Ecosystems in China”. 6. Better than Cash Alliance. 2017.