Money transactions across nations are growing rapidly with overseas workers sending more remittances than ever before. Approximately $630 billion was transferred as remittances to countries with low and middle income in 2022, according to the World Bank.
Migrants, refugees, and expats across the world have played a significant role in cross border transactional flow. These individuals have resumed work and are now able to make cross-border transactions due to their revived earning capacity post-pandemic.
India and the Philippines are among the top 10 countries that received the most money from overseas in the form of remittancances. In contrast, Qatar, Saudi Arabia, Australia, US, UK and Australia are nations where migrant workers are bouncing back and are now capable of sending money back to their home countries.
Over the past few years, the use of digital payment channels has aided in increasing the transparency of worldwide money transactions. TerraPay, which is a mobile payment services provider based in London, manages the infrastructure for partners such as Western Union, MoneyGram, and Visa, and operates in numerous corridors spanning over 200 nations. Data from the company also shows that India is the biggest recipients of money from overseas.
This is consistent with the data from the World Bank and the United Nations, which indicates that 18 million Indians are residing in foreign countries – making it the largest dispersion in the world. India recorded a historic high of $100 billion in remittances in 2022, reflecting a 12% increase compared to the previous year.
Pandemic trends have partly caused such a spike in money transactions. Relaxation of travel restrictions and vaccination have enabled migrant workers to move back to Gulf regions and resume work. Similarly, skilled migrant workers from US, UK and Australia have been sending money back home with the help of job-support programs during Covid-19 restrictions. They had an added advantage due to the depreciation of the Indian Rupee against the US dollar, as per World Bank.
Mobile and digital banking have made it possible worldwide to make smooth and safe transactions. The increase in digital payments on a global scale has led to intensified competition among remittance services. This transformation has enabled foreign workers to send money to their home countries in a more cost-effective and efficient manner, as stated by Leora Klapper, a senior economist at the World Bank.
An instance to support that is how laborers are now able to send money using their mobile banking outside of conventional banking hours and from the comfort of their own homes, without having to visit a bank or a money transfer service. This advancement has significant implications for the capability of low-income families to pay for fundamental requirements such as food, basic medical care, education, and housing, Leora Klapper emphasized.
