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Sending money to family and friends is often a deeply emotional act for migrants, tied to their sense of responsibility and care for their families. This emotional connection together with word-of-mouth from the community, play a significant role in the selection of a money transfer service, with many users opting for providers that offer reliability and security, even if the costs are slightly higher, leading to localized trends in service usage.
Understanding end-users’ consumption behavior when it comes to sending money across borders is crucial for businesses in the remittance industry.
Here are some key trends and statistics:
A significant trend in cross-border money transfers is the shift from traditional methods, like bank transfers and cash-based services, to digital channels. According to the World Bank, digital remittances accounted for over 20% of global remittances in 2022, and this share continued to grow in more recent years.
In fact, as of 2023, digital remittance services accounted for over 40% of the global market share in money transfers, driven by the convenience, speed, and lower costs when compared to traditional banking options. Migrant workers, in particular, are favoring digital solutions for quick and secure cross-border remittances, with digital-first platforms leading the way. This trend is evident as companies like Remitly and Intermex report substantial increases in active users, with Remitly showing a 42% growth in its customer base this year alone.
Financial inclusion and omnichannel flexibility are also increasingly prioritized by industry leaders. Western Union, for example, has recently expanded its ecosystem with a single architecture that integrates retail and digital channels, allowing seamless transactions across various platforms. This approach reflects the broader industry movement toward creating accessible and convenient services that reach unbanked or underbanked populations, especially in regions with strong mobile adoption, like Africa and Asia, where mobile payment options have expanded financial access (Grandview Research, FXCintel, The Paypers).
For example, in Sub-Saharan Africa, over 50% of remittances are sent via mobile money platforms. Users appreciate the convenience, speed, and lower costs associated with digital channels.
Studies,also reveal that young consumers, particularly those aged 18-34, are more likely to use digital channels for remittances due to being comfortable with technology and often seeking out services that offer convenience and integration with their smartphones.
Consumers are highly sensitive to the costs of sending money abroad. Many users actively compare fees and exchange rates across different service providers before making a transaction. Users in cost-sensitive regions like South Asia and Africa are particularly motivated to find the cheapest way to send money.
According to recent data from the World Bank’s Remittance Prices Worldwide database, the global average cost for sending $200 in remittances was around 6.24% in late 2022. This figure has gradually decreased over time, reflecting an effort to meet the UN’s Sustainable Development Goal of reducing remittance costs to below 3%. However, progress remains uneven across service types and regions, with traditional banks often charging significantly more than digital channels.
For digital-only remittance services, the cost is notably lower. In early 2023, the average cost for these digital transactions was 4.72%, substantially below the 6.24% cost for non-digital remittances. Furthermore, a digital-only Money Transfer Operator (MTO) index, which tracks purely digital service providers, showed costs at 3.90%, illustrating the cost-effectiveness of digital channels.
The World Bank also introduced a “Smart Remitter Target” (SmaRT) metric, which represents the cost a well-informed consumer might find using the three cheapest qualifying options in a given corridor. In Q1 2023, the SmaRT global average was 3.47%, closer to the UN goal and underscoring how increased information and digital options could drive further cost reductions for consumers worldwide.
These insights outline the importance of expanding access to digital remittance channels to make cross-border transfers more affordable, particularly for migrant workers supporting families in low and middle income countries.
The speed of transfers is a key factor for consumers. Digital services that offer instant or same-day transfers are highly preferred.
A 2023 study by Juniper Research projects that the growth of cross-border B2B payments through instant payment channels, is expected to rise significantly – from 17% of all cross-border payments in 2024 to about 42% by 2028. This trend aligns with the adoption of ISO 20022, a standardized financial messaging protocol. This protocol allows businesses to exchange detailed transaction data in a streamlined way, enabling automated accounting and other efficiency-enhancing tools.
Furthermore, the study identifies digital wallets as critical tools for small businesses in emerging markets, often providing access to low-cost digital payments where traditional banking is limited. For providers, adopting digital and instant payment capabilities is crucial to stay competitive, particularly as instant payments reduce costs and improve transparency compared to traditional banking methods. As adoption increases, the instant transfer segment is anticipated to reshape the financial landscape, boosting efficiency and cutting costs for both large and small enterprises globally.
The study indicates that by 2028, digital wallets and real-time payments will not only play a central role in enhancing remittance service delivery but also drive substantial growth in the B2B market as businesses adopt these digital channels to meet evolving market demands.
Other recent studies highlight that the same strong demand for immediate cross-border money transfers applies to end users, primarily due to the efficiency and convenience it offers in financial management, especially for families reliant on remittances. Visa’s 2023 “Money Travels” report found that over 70% of surveyed consumers in regions like the Philippines and Singapore use digital channels for international transfers, favoring app-based payments for their speed and ease. Approximately 43% of consumers in Singapore, for example, remit funds monthly, showing the critical role of fast access to funds in supporting loved ones abroad.
The Bank for International Settlements (BIS) also noted that enhanced cross-border payment systems benefit individuals by lowering costs and increasing transparency, which is especially valuable for end users managing urgent or routine financial needs. To meet these demands, key payment platforms like Western Union and regional fintech apps are integrating faster systems, aiming to deliver funds in real time in over 70% of cases globally.
These findings underscore the need for immediate transfers as users increasingly prioritize speed and access in their digital financial interactions. This demand is driving further advancements in global interoperability and real-time payment technologies to meet evolving user expectations effectively.
Trust remains a critical factor in choosing a remittance service. Consumers prefer established brands with a reputation for security. Concerns about fraud and cyber threats have made end-users cautious, often preferring providers that offer robust security features.
Providers that comply with regulatory standards and offer clear, transparent practices are more trusted. End-users are more likely to stick with a service that ensures compliance with international and local financial regulations.
Loyalty programs and incentives have become essential in money transfer services, particularly as competition intensifies and customers increasingly prefer digital channels. Often, consumers remain loyal to a particular service due to the incentives offered, such as loyalty points, discounts on fees, or better exchange rates for frequent users.
In order to shine a light on this aspect of consumer behavior let’s check some notable examples:
These loyalty programs and incentives not only reduce the cost burden for regular users but also encourage them to remain within a particular platform’s ecosystem, increasing brand loyalty and user retention. Additionally, they are instrumental in attracting new users who value added benefits over competing services.
When analyzing end users’ behavior towards remittances we can also highlight the considerable differences in remittance behaviors across regions. The reasons for these differences are often related to economic conditions, available technology, banking infrastructure, and regulatory environments.
For instance, users in North America and Europe are increasingly adopting digital platforms, while in regions like Sub-Saharan Africa and South Asia, cash-to-cash services still hold a significant share, although digital is catching up rapidly. But that is not all. Let’s check these differences per region in a more detailed manner.
Latin America and the Caribbean
Sub-Saharan Africa
South Asia
East Asia and the Pacific
These variations reflect how regional conditions, economic policies, and technology access influence remittance behavior, shaping a unique landscape in each area.
Consumer behavior in the cross-border money transfer industry is increasingly driven by a demand for lower costs, speed, convenience, and trust. Digital platforms are leading the way, particularly among younger, tech-savvy users and in regions where digital infrastructure is improving rapidly. A small but growing segment of users is exploring blockchain-based solutions and cryptocurrencies for remittances, attracted by lower fees and faster transaction times. However, traditional methods still have a strong foothold in areas where cash transactions dominate or digital literacy is lower. Understanding these behaviors is key for service providers aiming to capture or retain market share in this dynamic and competitive industry.
Author
Ana Vargas, Customer Success and Partner Marketing Manager