Remittance Market Expected to Reach $1329.9 Billion by 2032

According to a new report published by Allied Market Research, titled, “Remittance Market, Application (Consumption, Savings, and Investment), Remittance Channel (Banks, Money Transfer Operator, and Others), and By End User (Business, and Personal): Global Opportunity Analysis and Industry Forecast, 2023-2032" The remittance market was valued at $784.25 billion in 2022, and is estimated to reach $1329.9 billion by 2032, growing at a CAGR of 5.8% from 2023 to 2032.

Cross-border remittances provide numerous economic benefits, including increased financial inclusion and economic development. Remittances are extremely important in the lives of migrants and their families. Money received in migrant households in their countries of origin accounts for most of the household income, typically spent on necessities such as medicines, education, food, and housing. Sending money abroad has traditionally been time-consuming and costly, as evidenced by the never-ending chains of intermediaries, hidden fees, and manual paperwork. Fortunately, advancements in the industry over the last few years mean that individuals and even small-to-medium-sized businesses can now benefit from cheaper, faster, and value-added foreign fund transfer services.

Moreover, the increase in cross-border transactions, mobile-based payment channels, and reduced remittance cost & transfer time drive the growth of the market. In addition, the surge in adoption of banking & financial sectors across the globe fuels the growth of the market. However, lack of awareness for digital remittance and stringent regulations to prevent rapid growth is expected to impede the market growth. Furthermore, continuous technological innovations in the digital remittance industry as well as rise in internet and mobile penetration are expected to provide lucrative opportunities for remittance market growth.  

By application, the consumption segment attained the highest remittance market size in 2022. This is due to the fact that the developments in the digital space are rapidly altering the dynamics of the remittance industry. 

On the basis of region, Asia-Pacific is considered to be the fastest growing region during the forecast period. This is due to a rise in rivalry from new rivals and a surge in the number of customers.

Impact of the Russia-Ukraine War on global remittance market

Impact on market size

The Russia-Ukraine conflict has the potential to significantly impact the global remittance market in various ways such as reducing the cost of sending money to recipients in the country, however, the war has limited the ability of payout services to function. For instance, according to news sources, several players in Russia have suspended remittance services from the country. In some cases, this is due to the sanctions imposed on banks with ties to the Russian government. For example, Western Union's service in Russia has been made possible through a collaboration with Sberbank. Following the sanctions, digital players Wise, Remitly, and WorldRemit announced the suspension of their services to Russia.

Moreover, the economic disruptions stemming from the conflict lead to decreased remittances from Ukrainian migrants working abroad and from Russians sending money back home, affecting the income and livelihoods of families in both countries. In addition, currency fluctuations resulting from geopolitical uncertainty could reduce the purchasing power of remittances, further impacting recipients, which significantly influences the economic well-being and standard of living of individuals and households in remittance-receiving countries. The displacement of people, both internally and across borders, due to the conflict has increased the volume of remittances sent to affected regions as displaced individuals rely more heavily on financial support.

Furthermore, disruptions in remittance corridors between Russia, Ukraine, and neighboring countries could affect the flow of funds within these regions. Policy changes in response to the conflict, such as restrictions on capital flows or changes in exchange rate policies, could also influence the remittance market dynamics. In addition, remittances have played a significant role in Ukraine as it provides a steady source of income for many Ukrainian families, contributing to the overall economic stability by reducing poverty level and supporting household consumption. Remittance flows to Ukraine surpassed $14 billion in 2021, representing around 7% of GDP, and equivalent to 2.1 times the size of foreign direct investment in the same year. Remittance flows to Ukraine have been resilient during the pandemics, and even during the war, as many Ukrainians living abroad mobilize to support their families back home. According to recent projections by the World Bank, remittances to Ukraine are expected to increase by 22% in 2022.

Moreover, humanitarian aid initiatives involve the transfer of funds through remittance channels to provide direct financial support to populations affected by the conflict. Finally, the long-term economic implications of the conflict, including changes in migration patterns and investment flows, could have lasting effects on the global remittance market trends.

Key Findings of The Study

• By application, the consumption segment accounted for the largest remittance market share in 2022.
• Region-wise, North America generated the highest revenue in 2022.
• By remittance channel, the money transfer operator segment accounted for the largest remittance market share in 2022.
• Depending on the end user, the personal segment generated the highest revenue in 2022.

The key players profiled in the remittance market analysis are Bank of America, Citigroup Inc., JPMorgan Chase & Co., MoneyGram International, Inc., RIA Financial Services Ltd., TransferWise Ltd., UAE Exchange, Wells Fargo, Western Union Holdings Inc. and XOOM. These players have adopted various strategies to increase their market penetration and strengthen their position in the remittance industry.