C2C Payments Part 2 - Remittances to Low and Middle-Income Countries grew an Estimated 3.8% in 2023 to nearly 670 Billion USD

In 2023, remittances to low- and middle-income countries saw a remarkable increase of approximately 3.8%, reaching nearly $670 billion.

This growth highlights the continued importance of remittances as a crucial source of income for many families across these regions.

For the financial technology sector, this presents a significant opportunity to innovate and expand consumer-to-consumer (C2C) payment solutions.

The Reason Why Remittance to Low and Middle-Income Countries has a fast Growth

Several factors have contributed to this uptick in remittances:

• Economic Resilience: Despite global economic uncertainties, many migrant workers continue to send money home, driven by the need to support their families and invest in local economies.
• Technological Advancements: The proliferation of digital payment platforms and mobile banking has made sending remittances more accessible and affordable.
• Policy Changes: Governments and regulatory bodies in various countries have implemented reforms to reduce transaction costs and improve financial inclusion.

Opportunities for C2C Payments Fintech Companies

Some Statistic about Remittance

The Number of Immigrants Worldwide is Increasing because of Economic Crises and Wars.

As of 2023, there are approximately 281 million international migrants globally, according to the United Nations Department of Economic and Social Affairs (UNDESA).

This number has grown from 258 million in 2017, reflecting a steady increase in international migration.

The United Nations High Commissioner for Refugees (UNHCR) estimates that by mid-2023, over 108 million people were displaced globally due to conflict, violence, and human rights violations.

Countries experiencing significant conflict, such as Syria, Afghanistan, and Ukraine, have seen large numbers of refugees and internally displaced persons (IDPs) fleeing their homes.

The Cost of Banks is still too high

The latest statistics show the cost of remittance through these popular channels:

• *Banks: an average cost of 12.1%
• Post Offices: 7%
• Money Transfer Operators: 5.3%
• Mobile Operators: 4.1%*

*Source: World Bank

According to this data, it can be concluded that transferring money through traditional methods such as banks and post offices incurs significant costs for users.

Imagine having to pay up to $12.1 for every $100 sent home; you would probably find that quite uncomfortable and inconvenient, wouldn't you?

Opportunities for C2C Payments

The growth in remittances opens up new avenues for C2C payment solutions:

Enhanced Payment Platforms:

As remittance flows increase, there is a growing demand for robust and secure payment platforms that can handle high volumes of transactions efficiently.

Fintech companies have the opportunity to develop and refine platforms that offer lower fees, faster processing times, and enhanced security features.

Integration with Mobile Wallets:

Mobile wallets are becoming increasingly popular, especially in regions with high remittance activity. Integrating remittance services with mobile wallet applications can offer users a seamless and convenient way to manage their funds.

As a fintech company involved in cross-border payments, FinFan understands that market trends will focus on developing mobile applications to best serve users, given the increasing number of smartphone users each year, making them seemingly indispensable.

Therefore, we always strive to select partners that provide the best user experience by developing remittance apps for sending money to Vietnam, such as Remitly, Ria Money Transfer, MoneyGram, Paysend, etc.

Moreover, in Vietnam, we continually strive to connect with fintech partners that are at the forefront of the mobile money trend, such as MoMo, ZaloPay, VNPay, etc., and have developed the first ewallet aggregator product for the Vietnamese market related to receiving international money transfers to Vietnam.

Cross-Border Payment Innovations:

The rise of blockchain technology and cryptocurrencies presents innovative ways to facilitate cross-border payments.

These technologies can help reduce transaction costs and provide faster settlement times, addressing some of the traditional challenges associated with remittances.

At FinFan, we are constantly working to develop new technologies to better support the Vietnamese community worldwide in remitting money to Vietnam, in addition to the three main products we have been providing in the market, which are:

. Cash pick-up at the bank counter

. Remittance to Vietnam directly to bank accounts

. Remittance to Vietnam directly to e-wallet

We are also working diligently to explore and research blockchain technology (especially the cryptocurrency market), actively participating in related community events, and collaborating with international partners such as Triple-A to provide Vietnamese people nationwide with remittance experiences that are “Faster - Safer - More Cost-Effective.”

Localized Solutions:

Understanding and catering to the specific needs of different regions can lead to more effective C2C payment solutions.

Customizing services to meet local preferences and regulatory requirements can enhance user experience and drive adoption.

Challenges and Considerations for Cross-Border C2C Payments

While the opportunities are significant, there are also challenges to address:

• Regulatory Compliance: Ensuring compliance with international and local regulations is crucial for avoiding legal issues and maintaining user trust. Fintech companies must navigate complex regulatory environments and stay updated on changes.
• Security Concerns: As digital transactions increase, so do the risks of fraud and cyberattacks. Implementing robust security measures and educating users about safe practices is essential for protecting both financial and personal data.
• Market Saturation: With the growing number of fintech players in the remittance space, differentiation becomes key. Companies need to offer unique value propositions and maintain high standards of service to stand out.

Conclusion Regarding the Growth in Remittances to Low- And Middle-Income Countries presents a Promising Landscape for C2C Payment Solutions.

The growth in remittances to low- and middle-income countries presents a promising landscape for C2C payment solutions.

By leveraging technological advancements and addressing the associated challenges, fintech companies have the opportunity to enhance financial inclusion and drive positive economic impact in these regions.

As the industry evolves, continued innovation and adaptation will be crucial for capitalizing on this expanding market.

This article was curated and authored by FinFan's market research and development team, alongside our marketing department.

About FinFan

FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.

FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.

For more information, please get in touch with us through:

🌐https://finfan.io

📞(+84) 2866 85 3317

✉ support@finfan.vn

LinkedIn: FinFan