According to a report by the World Bank, global remittances reached an all-time high of $689 billion in 2019, with developing countries receiving $528 billion of that total. However, the COVID-19 pandemic has caused a decline in remittances, with the World Bank estimating a decline of 9.6% in 2020. Despite this, the need for remittances remains high, especially for developing countries where it can make up a significant portion of GDP.
With traditional remittance methods, such as wire transfers and money orders, come high fees and long wait times for the money to be received. However, new technology and alternative methods have emerged to make the process faster and more affordable.
One alternative method is mobile money transfer, which allows for the sending and receiving of money through a mobile phone. This method has become increasingly popular in Africa, where mobile money accounts for over 90% of all transactions in some countries. Mobile money transfer is fast, secure, and often has lower fees compared to traditional methods.
Another alternative is digital remittances, which uses blockchain technology to facilitate cross-border transactions. Digital remittances can offer faster transaction times and lower fees, and are also more secure as they are less susceptible to fraud.
Startups such as TransferWise, WorldRemit, and Remitly have also emerged as popular alternatives to traditional remittance methods, offering competitive exchange rates and low fees. These companies often use technology to streamline the process and offer additional services such as mobile apps and online tracking.
In conclusion, while traditional remittance methods still dominate the market, alternative methods such as mobile money transfer and digital remittances are becoming increasingly popular. Additionally, new remittance startups are challenging traditional players with more competitive rates and innovative technology. As the world continues to evolve, it will be interesting to see how the remittance industry adapts and what new solutions may arise. It is important to research the options available and compare costs and services before making a decision on how to send money abroad.
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