The shift to digitalisation in the cross border remittance industry


2020 has been not only challenging, but also full of opportunities for the remittance industry. Remittances are extremely important as a source of income for millions of people around the world. By guaranteeing the wellbeing of their beneficiaries, migrants contribute to the global effort to achieve the Sustainable Development Goals set by the United Nations.


During the first months of the pandemic, the demand for remittance services declined in most of the world. Many migrants had lost their jobs owing to lockdown policies and to the global economic slowdown or were struggling with health issues due to the COVID-19 virus. This frequently obliged migrants to interrupt the financial support they usually sent to their families at home. Even when they wanted to send remittances, many migrants often found themselves unable to do so because of local restrictions which had forced the closure of shops.


In the subsequent months, both migrants and remittance services providers (RSPs) demonstrated an outstanding ability to adapt their behaviour to these challenging circumstances. The necessity for migrants to send remittances online has accelerated the ongoing shift from cash remittances to digital remittances. While a large majority of companies have expanded their digital offerings through new products and new digital partnerships throughout 2020, the shift to digitalisation is now proceeding faster than ever before.

Additionally, in many cases, the intervention of national regulators has been necessary in order to allow more flexibility in the rules controlling the remittance market, at least temporarily. In many countries, fees on transactions were waived and transaction limits were increased. Electronic KYC (know-your-client) has been allowed in some jurisdictions, allowing RSPs to onboard new clients online. All these initiatives have allowed RSPs to continue providing their much-needed services to migrants.


The remittance market is a particularly dynamic one, which has been able to offer a quick and innovative response to the COVID-19 pandemic, but major challenges persist. Unexpected changes in regulations can sometimes require very fast action from RSPs, which was the case in 2020 following Brexit, or after the issuance of a circular regarding remittances in Nigeria during December.


In order to ensure the efficient functioning of the remittance market, the cooperation of all its stakeholders is necessary. IAMTN, RSPs, regulators and the international public sector should continue working together to keep remittances flowing.


The trends observed throughout 2020 vary across regions. In fact, they all have their own particularities and each country has reacted differently to the multiple challenges generated by the pandemic.


To learn more about general trends, partnerships, digitalisation and regulation in the global remittance market last year, read our 2020 Industry Report.

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