International digital remittances will reach $525 billion by 2024, up from an estimated $332 in 2019, says Juniper Research.
According to its new report, Digital Money Transfer & Remittances: Domestic & International Markets 2019-2024, the mobile channel will become increasingly popular, accounting for 41% of international digital money transfers by volume in 2024, up from 33% in 2019.
Meanwhile, blockchain-based payments have the potential to increase digital payments further, as the technology has a high possibility of disrupting existing business models. Traditional money transfer operators should aggressively pursue partnerships to effectively leverage blockchain for future transformation, Juniper states.
By utilising a blockchain-powered network, operators can offer their users a much faster, cheaper and more transparent service. Solutions such as RippleNet and IBM Blockchain World Wire are set to transform the area, by connecting diverse sets of partners in different markets to enable more effective payments.
In order to succeed, blockchain platforms must focus on gaining as many partners as possible to increase the reach of their networks. This is an opportunity for traditional money transfer operators to change the way they operate; reorienting their business models around the benefits blockchain enables, Juniper argues.
The report also finds that the rise of FinTechs such as TransferWise and WorldRemit has led traditional players to evolve rapidly, with Western Union and MoneyGram both focusing on digital strategies going forward. But they need to do more in this area as FinTechs are offering a superior user experience, with heightened transparency on fees a crucial differentiator.
Juniper Research’s Nick Maynard says: “While traditional operators have launched digital solutions, they have yet to adopt transparent pricing of transfers. Unless operators accept this requirement, they will continue to lose market share. Innovation must be the number one priority.”