Global remittances hit a record $613 billion in 2017, up from $573 billion in 2016, following a two-year decline. That growth is poised to continue at a healthy, but steady rate: Business Insider Intelligence expects global remittances to grow at a 3.4% compound annual growth rate (CAGR) to reach $750 billion by 2023.
Digital remittances will drive the overall industry moving forward. Digital growth will be fueled by factors like rising smartphone penetration, increasing demand for digital transactions, and an overall need for faster transfers. Business Insider Intelligence expects digital remittances to grow at an 11.5% CAGR from $225 billion in 2018 to $387 billion in 2023.
Competition is rising between legacy giants and digital-first startups competing for the same segment of young, digital-savvy customers. These consumers are entering the cross-border transfer space for the first time, which is creating a highly competitive dynamic in the industry as legacy and digital players look to win share.
To win this audience, legacy and digital players need to focus on the four areas consumers value most in remittances: cost, convenience, speed, and safety.
Remittance providers need to target two areas — the cost of transferring and pricing transparency — to meet the cost-related preferences of this audience.