MoneyGram has released the findings of a new consumer survey, which explores key trending factors and future growth drivers in the global payments industry, taking into account economic impact, digital adoption and demographic behaviours.
Findings indicate that consumers rely heavily on sending money abroad digitally and have a strong appetite for expanded app capabilities
State of Remittances – U.S. Consumer Survey 2023, which includes insights from a survey of 1,000 US consumers who have sent money abroad in the past year.
The overwhelming majority of respondents (9 in 10) expressed concern over inflation or an impending recession potentially affecting the amount of money they’ll be able to send abroad this year.
However, over 75% expect to still send the same or an even higher amount of money in 2023, compared to 2022.
Reinforcing this sentiment, 42% claim that in the event of an explicit economic downturn, they would likely increase the amount they send to help alleviate financial pressure on family and friends abroad.
Survey results highlighted that consumers continue to send money around the world to support the needs of loved ones back home, with ongoing support being the largest reason for sending funds abroad (63%), followed by supporting family and friends with an unexpected situation (52%).
Approximately half of all respondents said the needs of their loved ones abroad have increased compared to a year ago, while 44% said their needs stayed the same.
“This latest survey further solidifies the idea that through thick and thin, consumers who send money to family and friends abroad are resilient and dependable,” said Alex Holmes, MoneyGram Chief Executive Officer.
“We saw this in action during the pandemic – undoubtedly the deepest economic and health crisis in decades – and we continue to be inspired that consumers still plan to prioritise supporting their communities abroad even despite recent economic turmoil.”
Demand for digital capabilities remains high
Across all age groups, the survey found that consumers share a high affinity for digital money transfer platforms (via mobile apps and websites), and their migration to digital is only increasing.
85% of respondents said they primarily use digital methods to send money abroad (over in-person transfers), and nearly half (43%) said they increased their digital money transfer volume in 2022.
However, generations differ on their preferred method for sending digital remittances.
The survey showed a clear line drawn between younger (Gen Z, Millennial) and older (Gen X, Boomer) generations around apps and website use.
About half of younger consumers prefer apps as their primary way to send money abroad, compared to 40% of Gen X and 33% of Boomers.
The majority of respondents would be interested in a digital app that addresses a broader range of financial needs to complement an existing core remittance offering.
Millennials show the most interest in the expansion of app capabilities, as 97% say they would value an app that addresses a range of needs.
Lastly, another strong unifier across all demographics is the appeal of blockchain within the global payments industry.
Among those surveyed who were familiar with the technology (which included over half of respondents), an overwhelming 91% said they would be interested in seeing blockchain technology leveraged in the money transfer space.
“Remittance consumers are increasingly forward-thinking regarding the technology available to them,” said Seth Ross, MoneyGram Chief Digital Officer.
“We’re finding that a strong majority of our current and potential customers are interested in these advanced solutions, especially in an increasingly uncertain economic environment.
Our strategic vision to offer consumers expanded capabilities will better equip them to manage not only their finances, but also the financial health of their loved ones overseas.”
Millennials the future growth of the global remittance market
As Millennials age into a larger share of the primary-earner role in their families, it is clear that they are relying more heavily on international money transfers.
In fact, Millennials are the most likely generation to increase their sends abroad in 2023.
This is not only due to their own financial standing but the increased needs of their loved ones, as 55% of Millennials said their family and friends needed additional financial support over the past year (compared to 48% of Gen X, 39% of Boomers, and 38% of Gen Z).
While Millennials continue to increase their volume of transfers, their tech preferences are especially notable.
According to the survey, 53% of Millennials who send money abroad have increased their use of digital send methods in the past year, the most of any generation.
In contrast, Gen X, Gen Z and Boomers also report increasing their use of digital money transfers as well but by smaller percentages (37%, 34% and 19%, respectively).
“As the next generation takes the reins in the world of remittances, we as an industry must be there to meet the demand for more intuitive and innovative financial platforms,” concluded Anna Greenwald, MoneyGram Chief Operating Officer.
“Millennials are weathering the economic storm to keep money flowing to those who rely on them, and by staying ahead of the technological curve, the global payments industry can empower them to do much more with their money transfers.”