THE amount of money that would be remitted globally through the mobile channels is expected to exceed $25 billion by 2018, representing an increase of 67 percent from an estimated $15 billion in 2015.
International IT research firm, Juniper Research, which did the survey, stated that transaction volumes had surged in the airtime top-up market, saying that it discovered that the international remittance market is increasingly being disrupted by a proliferation of smaller, agile ‘pure-play' digital providers such as PayPal-owned Xoom and WorldRemit.
According to Juniper, the research found a significant upsurge in international remittance activity in the past two years, with a number of cross-border mobile remittance services being deployed, and that Xoom announced in April that it will expand its services to 13 new recipient countries.
The research firm said that international mobile money transfers are forecast to grow in frequency in all regions as users become more accustomed to using the service while higher value transactions are also forecast to increase.
The release of the report coincided with the celebrate International Day of Family Remittances today, 16 June.
Research author Nitin Bhas, said that the market was previously dominated by Western Union and MoneyGram, and that the international mobile money transfer is becoming increasingly competitive with these new mobile remittance providers offering markedly lower prices than the established players.
Juniper report further revealed that mobile international remittances will have an impact on remittances via informal channels such the ‘grey remittance' market composed primarily of cash by offering a lower-cost alternative to traditional remittance services.
The research observed that while international cash remittance growth had slowed, transaction volumes have surged in the airtime top-up market, where service providers are not required to obtain money licenses.
Juniper said that the simplicity of airtime and the need to facilitate basic P2P money flow means these still represent the initial deployments in many markets. It also enables the sender of the remittance to control precisely what that remittance will be used for.
However, the international airtime transfer segment represented very high commission rates when compared to international remittance. Nevertheless, Juniper forecasts that the total number of mobile international airtime top-up transactions will approach half a billion dollars for the first time in 2018.
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