LOS ANGELES—The digital remittance market is expected to make a little over $8.59 billion in 2025, according to a new study.
The news comes as new fintech startups have begun operating in Europe. Observers say that newcomers, as well as the older ones, will get a bigger share of the pie, FXcompared stated.
Data published by QY Research in their study Global Digital Remittance Market Report 2018 to 2025 found the sector will expand by 23.3% through 2025, amounting to billions of dollars in profit. The study focused on small businesses, migrants, students and the money they send home or receive from their home country, FXcompared reported in its analysis.
According to the study’s researchers, it is more cost effective to transfer money internationally through digital transactions as overseas transfer rates have been slashed due to lower overhead costs.
‘Powerful Monetary Solutions’
QY Research also found that cheaper rates contribute to the GDP of remittance-receiving nations, a welcome addition to the household income of direct recipients. The research firm added that the savings from digital transfers also curb poverty worldwide, FXcompared said.
“Digital remittances are powerful monetary solutions. A study done by the United Nations supports this claim, noting that remittances and the savings from cheaper transfers can bring positive development for both the local and global economy,” FXcompared said.
Fintechs are slowly taking a larger chunk of the market as more customers shift to digital transactions. The costs are often just a fraction of the total fees charged by traditional brick and mortar banks. According to experts, digitization is the future and international money transfer giants are working on new technology to make this possible, FXcompared explained.