A new blogpost by Currencycloud has underlined how the coronavirus pandemic and the restrictions put in place due to it has led to the massive growth of digital remittances.
When the world en-masse began to lockdown in March 2020, new challenges arose for the individuals who sent money back to their families in other countries. Prior to the pandemic, people who did this commonly did it in-person on the high street. With the high street closed, the remittance market was forced to go strictly online.
Currencycloud noted the pandemic ‘clearly served as a catalyst for a more rapid digitalisation of the industry’, as it had to adapt quicky, as 75% more people turned to making digital remittances in 2020 than they did in 2019.
The company added, “The lockdowns that occurred as the pandemic took hold caused an acceleration of change not just in retail purchasing habits, which went from high street to digital overnight, but also transformed the way people sent money to their families and friends abroad.
“With one in nine people on the planet relying on remittances, their needs were not going to stop because of the pandemic. So, when the bricks and mortar remittance service providers shut up shop during lockdown, existing service providers moved quickly to stay in business and offer their customers an easy way to access their services.”
This explosion in the digital remittances market has seen FinTechs like Transferwise, WorldRemit and Remitly experience huge growth due to the change in behaviours. In April 2020 for example, World Remit reported a 150% year-on-year growth in new customers, while digital-only Azimo secured a 100% month-on-month uptick in customers in the same month.
Also as important has been the shift of how remittances are done post-pandemic, with mobile now seen as the preferred way of sending and receiving cash. Countries in Asia such as China and a number of African markets have led the way in this area, with mobile app tracking firm Apptopia reporting year-on-year growth of 52% of mobile app downloads across leading remittance players. Leading this demographically is the younger population, who have benefitted from the speed, ease and convenience of mobile apps and services.
Currencycloud added, “While the acceleration of digital has been relatively smooth for some of the bigger players, it’s equally possible for smaller high street remittance businesses to improve their offer to their customers by launching new digital remittance products.”
Read the full blogpost here.
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