New data has found that international digital remittances will reach $525 billion by 2024, up from an estimated $332 in 2019.
Meanwhile, blockchain-based payments have the potential to increase digital remittances further, as the technology has a high possibility of disrupting existing business models.
The recommendation is that traditional money transfer operators aggressively pursue partnerships to effectively leverage blockchain for future transformation.
Blockchain has strong potential in remittances
The research found that 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.
Need to innovate to meet FinTech challenge
The research also found that the rise of FinTech players, such as TransferWise and
WorldRemit has meant that traditional players have had to evolve rapidly, with Western Union and MoneyGram both focusing on digital strategies going forward.
However, mere digitisation of strategies is not sufficient. The research found that FinTech players offer a superior user experience, with heightened transparency on fees a crucial differentiator.
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