The future of international money transfers

Digital remittance paving the way to seamless and convenient cross border transactions


The COVID-19 pandemic has presented the world with unique and unprecedented socioeconomic challenges. As a result, we have been forced to change our behaviours and how we interact in the world - from physically distancing and checking in via QR codes, to bigger pivots in businesses and life as we knew it to the realm of modern digitalisation. These changes have affected all industries, including remittance.



The latter is notably apparent in the FinTech sphere, where digital remittances have increased financial inclusivity and stability for many Malaysians over the last 18 months.


According to the World Bank, a bulk of these digital transactions immediately impact low and middle-income countries (LMICs), usually provided by wage earners and migrant workers, who regularly send money back to support their families.


In the wake of this digital revolution, there are key factors that have impacted and will continue to transition the remittance industry in Malaysia, helping customers stay connected to their finances through technology.


The Rise in Digital Remittances

Workers’ remittances have grown rapidly in the past years, representing the largest percentage of foreign income for developing countries, outnumbering FDI. In fact, in 2019, remittances to LMICs hit a record high of USD $554 billion.


In the wake of COVID-19, the World Bank predicted that the pandemic’s effect on remittances would see a dip of 20% in 2020. In spite of this, digital remittances continued to grow in many regions around the world, as families found unique ways to keep in touch with loved ones and travel restrictions and business closures created unprecedented funds for migrants to be able to utilise for remittances.


As we continue to evolve our digital offering in the remittance space, and our customers rely more on technology, the topography of the market will continue to evolve whilst resonating with current times and the needs of global citizens.


How Digital Remittance Helps Malaysians

Remittances have demonstrated the ability to uplift the quality of life for communities, and have been correlated with alleviation of poverty, improved nutritional outcomes, the better quality of education and even reduced child labour.


Fiscal benefits, on the other hand, include boosting the resilience of a country’s financial sector, especially during a crisis like the COVID-19 pandemic by reducing prices, increasing convenience as well as reducing the time spent sending money, and increasing access. Malaysia’s workforce consists of 15% overseas foreign workers and expatriates, facilitating digital remittances around the region and globally from the country, providing resources and the ability for thousands of people a vital way to support family and friends back home for thousands of people living in Malaysia.


When compared to traditional brick and mortar remittance services, digital transfers are clearly safer, faster and easier. Senders do not have to be physically present to make the transaction in digital remittance, unlike its predecessors. With innovation happening in the industry at a rapid pace, we can expect the category to maintain its stake for millions of people around the world, and become commonplace on a global scale.


The demand for innovation in this industry highlights the need for regulatory acceptance for innovative business models along with the heightened need for digital solutions. Digital remittances are here to stay, and for many have already become a way of life.