When you look at the trend of international money transfers, it’s clear that online-first organizations are rapidly winning over a larger and larger portion of individuals looking to transfer money abroad. However, the popularity of international money transfers is somewhat spotty. Australia, the UK, and Canada lead the charge in the most people who are actively searching online for money transfer companies such as, “TransferWise” or, simply, “international money transfer app.” Yet in equally populated and financially competitive nations such as the United States, the interest is significantly less. India in particular has very significant search volumes, even in comparison to its vast population.
The disparity in the popularity of international money transfers is surprising, especially since it is such an affordable, secure, and efficient service when compared to brick-and-mortar bank transfers.
Why Is the Popularity Not Worldwide?
The places in which searches for international money transfer are not the most populated areas of the globe. Still, they drive the ever-growing international money transfer industry. If we look at the top three rich locations pushing the interest of the international money transfer industry, Canada, Australia, and the UK, there are a few clear reasons that they lead the world in the participation of money transfers. These three nations each have a very large expatriate population, as well as a large number of migrant workers looking to send money home to loved ones. Additionally, there are a large number of people from these nations originally who have chosen to live abroad. This, in part, explains why they lead the world in international money transfer users.
These nations also have very advanced financial institutions, as well as a populous who is very well informed about their financial options. Individuals from Canada, Australia, or the UK are all very aware that transferring money abroad through traditional banks is expensive, therefore they look to advanced digital companies for less expensive and more efficient options.
India is another nation where the remittance industry thrives. A very large population, and limited employment opportunities domestically. Many Indians living abroad are blue-collar workers, living and working with a tight budget and low wages. For this reason, international money transfer organizations are appealing as they offer a cheap option to send money internationally that traditional banks do not. Money transfer rates to India have decreased by significant figures since 5 or 10 years ago.
If we follow this same trend, it may be assumed that international money transfer would be equally popular in the United States. Oddly, this isn’t the case. The information about international money transfer organizations that provide digital options isn’t widespread throughout the United States. However, we may see this changing in years to come as several well-known news outlets have begun highlighting the importance of avoiding bank fees when wiring money abroad. Perhaps this means that in the future the United States will jump on board the international remittance industry train.
For now, however, the United States still shows signs of primarily transferring money through their brick-and-mortar financial institutions i.e. banks, such as Wells Fargo or Citibank. This can also be contributed to the technology fear that many experience when dealing with funds, especially considering the recent large-scale data breaches experienced by big-name companies. Many Americans fear that if these things could happen to large organizations, digital money transfer companies may not be safe, either. This, of course, is a relatively unfounded anxiety as digital money transfer companies are very secure and are constantly updating their technology to improve their cybersecurity and protect against hacks.
Finally, we can assume that countries with minimal access to the internet, or government limited access in some cases, will also be less aware of digital-first international money transfer companies even if they might benefit from their services.
Will International Money Transfer Become More Widespread?
In short, yes. The world is becoming increasingly tech-oriented. The world is also becoming more globally aware as it gets to be more common for people to live and work abroad. As these things happen, more and more people in coming generations will look for inexpensive money transfer options to accommodate their need to either transfer money home or make it more possible to transfer their funds around when they are travelling or living abroad. If we look at the statistics surrounding the international money transfer industry, we can see very clearly that it is increasing in popularity. In fact, it has been called one of the hottest industries to keep an eye on for explosive growth in years to come.
Furthermore, as the technology becomes available, the remittance industry will become more secure for users which can only mean an increase in use. Additionally, the increasing number of fintech startups focusing on making the remittance process more streamlined, more cost effective, and generally easier for users to access, also indicate that the industry will continue to see dramatic growth in the future.