By: Scott Eddington, Managing Director of Asia-Pacific at WorldRemit
According to WorldBank data, Australia sent close to US$4.4 billion in remittances in 2020 and is projected to grow in 2021, the trend towards digital money transfer increases as customers seek out speed, value and convenience in every aspect of their financial lives.
With widespread efforts to increase COVID-19 vaccination rates and grow the economy throughout Australia and the wider Asia-Pacific region, all eyes are now on what 2022 will bring for millions of families dependent on remittances each year.
With these factors in mind, international payments expert Scott Eddington, Managing Director of Asia-Pacific at WorldRemit, shares his predictions for market trends in 2022.
1. Remittance growth expected to continue
In response to the COVID-19 pandemic, the Australian government implemented policies that have helped stabilise the country’s economy, provide much-needed finances to citizens out of work and drastically reduce unemployment levels.
WorldRemit processed nearly 10 billion dollars in transactions in 2020. Given people’s increasing preference for digital tools and services to send money overseas, remittances will continue to grow steadily into 2022, perhaps at a slightly slower rate as economies around the world stabilise in the aftermath of the pandemic.
The shift towards digital, deeply accentuated by the pandemic, will continue its course as a growing number of tech-savvy consumers opt for lower costs, greater convenience, and the ability to send money on the go through mobile applications.
2. Mobile wallets surge in popularity
Mobile wallets, which allow users to store, send and receive money using their mobile phones, are expected to continue gaining popularity due to the greater flexibility and convenience they offer users. The pandemic has fueled the $2.4 trillion industry’s growth as the use of contactless mobile payments boomed in 2020.
Locally, we have witnessed digital wallet usage increase at a dramatic rate. In the 12 months spanning the coronavirus pandemic to March 2021, transactions rose from 36 million to 68 million, with the total value more than double from $1 billion to $2.1 bn.
The security and simplicity of electronic payments also make mobile money a popular way of sending and receiving money internationally. Among its advantages are low fees, wide access
given the significant penetration of mobile services in Asia-Pacific, no requirement to travel to collect funds during lockdowns or movement restrictions, and the ability to immediately leverage the ecosystem around wallets that allows for direct purchases and payments of services in the recipient country.
3. Safety comes first
Understanding safety concerns surrounding money transfers and sharing personal information online, money transfer companies will continue to prioritise safety measures above all else.
On the sending side, more companies are integrating additional features that allow them to validate the identification of their customers from phone’s IP addresses to the validation of identity documents.
On the receiving side, more deposits will be made directly to bank accounts or electronic wallets, as an increasing number of people prefer not to handle cash.
In the case of WorldRemit, all connections through our website and mobile app are secure and encrypted. We have also built a sophisticated automated machine learning system for fraud detection.
4. Speed is of the essence
While customers are used to waiting hours or even days for a bank wire transfer to arrive at its destination, the expectations for money transfer apps and platforms are much different. Due to new advancements in the digital landscape, users expect their money to be sent within minutes.
The trend of faster money transfers is booming, and in order to deliver, companies will continue to invest in enhancing their technology systems so that data exchange with financial institutions, telcos and local partners is even more seamless and the flow of remittances is uninterrupted.
At WorldRemit, our technology allows for 95% of transfers to be ready within minutes.
Money sending services that work with API technology, which generates the confirmation that the receiving account or wallet is ready to receive the money, will be able to ensure transfers in almost real-time. In addition, increased communication and tracking features will be integrated at global scale for users’ peace of mind.
5. The simpler the better
There will be a strong tendency to decrease the number of steps for each money transfer, from downloading the application and creating the user profile to adding the beneficiary. The trend is
towards more efficiency and effectiveness so that sending money becomes as easy as sending a text message.
Digital remittances eliminate the need to go to a fixed point to do the operation, saving users time and money. And in these uncertain times of pandemic senders and receivers are prioritising safety and looking for a simple, straightforward solution to do their transactions.
Technology has gained a more prominent role in people’s lives and money transfers have not been the exception. A relatively new industry about ten years ago, digital money transfers/remittances are not only here to stay, but they are becoming the preferred method for customers.
They have proven that they’re just as safe as a bank transfer, only much faster, cheaper, and more convenient.