According to a recent report published by Allied Market Research, titled, Asia-Pacific digital remittance market by Remittance Type, Remittance Channel, and End User: Global Opportunity Analysis and Industry Forecast, 2018-2025, the Asia-Pacific digital remittance market was valued at $31,234 million in 2016, and is projected to reach at $215,817 million by 2025, growing at a CAGR of 24.2% from 2018 to 2025. Banks are expected to grow at a highest CAGR during the forecast period, due to several initiatives and awareness campaigns taken by banks to shift the focus of consumers towards digital transfer networks.
Rise in cross-border transactions & mobile-based payment channels, reduced remittance cost & transfer time, and increase in adoption of banking & financial services majorly contribute towards the growth of the market. However, slowdown of the remittance industry in Asia-Pacific and lack of awareness about using digital channels to remit money hamper the Asia-Pacific digital remittance market growth.
Based on remittance type, inward digital remittance segment dominated the market in 2016, and is expected to continue this trend during the forecast period, owing to initiatives taken by the government of different countries to boost digital penetration of inward remittances in this region. Furthermore, the outward digital remittance segment is expected to grow at the highest CAGR during the forecast period, owing to increase in engagement of people in this region with their overseas counterparts for business, leisure, education, medical, entertainment-related activities, which involve transfer of money overseas.
The Asia-Pacific digital remittance market was led by China in 2016, and is projected to maintain its dominance during the forecast period. However, Singapore is expected to witness the highest growth, owing to the emergence of number of remittance technology start-ups in Singapore and widespread use of communication applications or social networking among foreign workers.
The remittance industry shifts its focus on being digitally remastered. Factors such as growth in base of customers comfortable with using mobile devices in Asia-Pacific, rise in competition from new entrants, and margin pressures due to growth in global consensus on lowering remittance transaction fees drive the penetration of digital channels. Existing remittance service providers in Asia-Pacific embrace digital channels to complement their existent services network whilst new entrants such as TerraPay focus on a pure mobile strategy to connect better with users and create greater business value. Numerous benefits of using digital channels for sending money such as high speed, availability of digital channels 24 hours a day, transparency, ease of use, high security, and others create numerous opportunities for the market.
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Rise in penetration of digital wallets is expected to boost the Asia-Pacific digital remittance market growth. For instance, in Bangladesh, B-Kash operates 18M wallet accounts and processes an approximate USD 26M in daily transactions. Also, in Philippines around 12M mobile wallet accounts are active. The increase in penetration of international peer to peer transactions and mobile wallets can accelerate the pace of the shift. Due to which many remittance companies leverage the advantages offered by digital to cost-efficiently expand access in Asia-Pacific. For instance, G-Cash which is a leading mobile wallet service provider in Philippines with 47M customers and a 46% share of the mobile telephony market, launched a remittance-linked medical insurance scheme. Asia-Pacific digital remittance market is highly fragmented and competitive, owing to the presence of well-diversified international and regional vendors.
However, continuous increase in presence of international vendors in this region impedes the growth of the small domestic players and makes the marketplace highly competitive. Although there is intense innovation, competition, and disruption in the digital remittance market, it has already experienced some consolidation. Furthermore, key players operating in this market adopt business expansion as their key developmental strategies. For instance, in May 2018, Azimo Ltd., a UK-based online money transfer company has raised $20 million by Japanese e-commerce company Rakuten to expand its presence in Asia.
Some of the key players profiled in the report include Amazon InstaReM, Remitly, Inc., Flywire, SingX Pte Ltd., Azimo Limited, WorldRemit Ltd, TransferWise Ltd, Ripple, MoneyGram, and TNG Wallet. These players have adopted various strategies to enhance their service offerings and to increase their market penetration. For instance, in April 2017, MoneyGram launched MoneyGram Sendbot, a smart and convenient platform that allows customers in the U.S. to send money transfers to any of its 350,000 locations.
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