The international money transfer market has advanced from the past to where it stands today after passing through countless evolutions. Since the early migration trends, the need for reliable remittance transfer service providers have remained essential for expatriates worldwide. This piece will include some current statistics about how big and advanced the current global money transfer market is, but a brief background is vital to keep things in perspective.
The global expatriates, whose numbers run into millions, reside in different countries worldwide. They contribute significantly to the economies of their respective countries by sending remittances. The volume of global remittances has crossed a staggering $700bn. How the modern remittance system facilitates the expatriates has helped swell international remittances.
There are many best ways for expatriates to send money to Sri Lanka online or to other countries. These ways become known as best because the facilities offered by the companies such as ACEMoneyTransfer have revolutionized the remittance industry.
International money transfer market’s origin
The need to move funds beyond borders always existed but was never without perils. People move money physically, which posed threats to both life and money until the system of Hawala came into being in the 8th century in South Asia. This system of money transfers was based on trust between two Hawaladars present in different locations. Through this system, goods and services to be transferred were replaced by coins and paper currency.
Initial form of global money transfer industry
The old conventional system continued until 1851, when the first wire transfer company, Western Union, was established. A few years after its birth, Western Union started a telegraph service transformed into a money transfer service based on the telegraph in 1871.
This system successfully moved funds from afar to the desired point where the Federal Reserve Banks adopted it in 1918 to move currency through telegraph. And since then, there was no looking back, and money transfer has become a matter of just a few clicks.
According to the World Bank, the total number of expatriates has crossed 80 million. This is set to increase further once the pandemic subsides. These over 80 million global expatriates have contributed to the worldwide economy alongside their respective countries’ economies with around $700bn annually. Both figures are likely to record expansion in the years ahead.
The expansion of the new market
Soon after the telegraph-based movement of funds, the remitters of that era resorted to this practice quickly as it was somewhat free of risks and dangers, earlier forms of money transfers entailed. The number kept growing coupled with scientific advancements. The companies adopted ways to facilitate the remitter globally and gradually overcame the challenges of risk, delay in transfers, troubles involving physically reaching out to the offices of service providers, etc.
With these and many other facilities, the global expatriates started using these services, which necessitated the industry to expand to the point where the number of expatriates grew to million, with the volume of remittances running into billions of dollars.
Here are a few quick and interesting facts about the international money transfer market.
- Globally, about one in every nine persons is supported by the funds that migrants send home.
- The funds that migrants send back to their homes are roughly 15% of their total earnings abroad.
- Mostly, sending remittances is an expensive exercise, but not if you choose to send your remittance through some of the world’s best service providers
- Remittances help alleviate global poverty substantially.
- Global remittances have the potential to achieve 17 SDGs, at least.
- About half of the global remittances go straight to the rural areas housing most of the poor population in the world.
- Global remittances are around three times more important than the international aid developing countries receive pretty often.
Given all of these interesting facts about global remittances, the UN is working to facilitate the movement of international remittances worldwide.
Rapidly expanding modern remittance market
Countless Money Transfer Operators (MTOs) are working worldwide at present that keep supporting monetary needs of innumerable diasporas globally. According to foreign exchange market, around $4.8 trillion are exchanged in transactions every day that indicates an enormous expansion of the industry. The World Bank shared an astounding volume of international remittances sent in 2016 which was $530 billion. Since 2000, the international remittance market has grown rapidly at a CAGR of 10.4% which reflects the increasing number of migrant workers around the world that keep sending remittances cross-borders.
The benefits of the modern remittance industry
The modern remittance system is beneficial to the expatriates in more ways, such as enabling people to transfer funds quickly and securely. It also includes the facility to initiate a transaction from your comfort zone and keep tracking it even if you are on the go.
Furthermore, in the modern remittance system, the expatriates have the liberty to choose the best company that meets their needs exactly, given the cut-throat competition and diversity in the market.
These are all the features that you must look for when choosing a company, as many online service providers exist only to fleece the customers by making online money transfers a complex process.
What is the future of the money transfer market?
Considering the swift pace of evolution and expansion in the industry, it is obvious that the money transfer market will soon become one of the biggest industries of the business world. As more people keep migrating to other countries for better livelihood, more and more money transfer operators (MTOs) continue to add to the existing list. Since the start to its present form, the money transfer market has served trillions of customers to fulfill their remittance needs in various ways but the present modern form uses cutting-edge technological solutions that offers swift, secure, and smooth transactions across borders.
This article has walked you through the origin and evolution of the remittance industry along with statistics necessary for you to keep in mind. It is also essential to choose your online money transfer service provider wisely because, after all, the quality of the services will make the movement of funds either a joy or burden.