The movement of money across borders can be fragmented, slow and inefficient; New Visa research reveals that consumers see the digital future. More than 70% of remittance senders in Mexico and Peru prefer to do so through digital payments rather than physical methods, indicating a significant increase in digital adoption over the past year.
Remittances are not only essential support for millions of migrant workers and their families, but are also vital to the prosperity of many developing economies around the world*. As the number of global remittance flows continues to hit new records*, 53% of consumers are turning to digital apps to send and receive funds around the world.
Visa today launched its research report Money Travels: Digital Remittance Adoption 2023, which, through a survey of more than 14,000 consumers in ten countries (including Mexico and Peru), reveals that digital remittances are rapidly becoming the most popular way to move money internationally, compared to going to a physical bank or branch (34%); send cash, checks or money orders (12%), or give money to another person who is traveling to their country of origin (11%).
In conjunction with the study, Visa also launched “Money Travels,” a new podcast series that explores how payment issues play out in different ways in various parts of the world, featuring the stories of real people, payment experts and partners.
“Fast, easy and secure payments can make a world of difference to families, communities and economies around the world,” said Rubén Salazar, Global Leader of Visa Direct. “This new research study shows an incredible acceleration of digital payments, but there is still more to be done by the industry to make simplified remittances available to more migrant workers and their families who depend on these vital payments to make everything from paying for food and education or even unexpected medical expenses.”
The Money Travels: Digital Remittance Adoption 2023 study examines how consumers send money abroad, taking a closer look at exchange rates or rates, the methods used, and the reasons for sending and receiving these all-important payments.
Specifically in Latin America, we present some of the most relevant key findings:
Digital remittances are the preferred method among surveyed senders from across Mexico and Peru. Sending money through digital applications is the most popular method for 76% and 72% of consumers surveyed in Mexico and Peru, respectively, compared to using a physical branch, cash or check. Only 7-10% rely on cash, checks, and money orders.
The adoption of mobile app-based digital payments is high, and the barriers to their use are few. Because the adoption rate of digital payments is so high in Mexico and Peru, few respondents reported barriers to using app-based payment methods, and remittance users expect to use digital transfers even more in the future.
High fees are the main pain point for digital remittance users surveyed in Latin America, although many report problems calculating the exchange rate to send money digitally. In addition to similar issues with high fees and currency exchange rates, common pain points for physical payments include speed and convenience.
A large proportion of remittance users in all countries consider app-based digital payments to be the most secure method. As in other markets, consumers surveyed in Mexico and Peru consider app-based digital payments to be more secure than any other method. Most believe that using digital transfers has practical benefits, including easier sending/receiving money, along with better security and peace of mind around remittances.
The rates for sending and receiving remittances vary widely by country. Of the countries surveyed, Poland, Mexico, Peru, and the Philippines receive remittances at higher rates than remittances. France and Singapore have higher shipping rates.
Sending more money, more often, is easier than ever. Surveyed residents of Mexico and Peru receive money from other countries more frequently than those who send money abroad. The frequency of remittances in general is higher in Mexico than in Peru. Receiving rates are higher in Mexico (52% vs. 42% in Peru) and sending is slightly more common in Peru (26% vs. 18% in Mexico). In Mexico, among surveyed consumers who have received money, 72% do so at least a few times a year.
Visa works in collaboration with global senders such as Brightwell, Paysend, Western Union and Xoom to enable efficient movement of money through digitized remittances. “One of our visions for Visa Direct is to create new opportunities for financial inclusion and wealth generation by helping to simplify cross-border payments and streamline the way money travels,” continued Rubén Salazar.
“Remittance inflows to Latin America are growing at an exponential rate, and there is no sign that it is slowing down,” said Jairo Riveros, Paysend's managing director and chief strategy officer for the US and Latin America. “At Paysend we understand that remittances play an important role for the loved ones of our clients, whether it is to access medicine, cover food expenses or cushion future expenses. That's why we're on a mission to create a world without borders so our customers can send money instantly, affordably, and securely."
The benefits of this change are obvious for remittance users in Mexico. Jesus, a Paysend client, commented: “I send money to my loved ones at least twice a month. That makes me feel close to them no matter how far apart we are. Being able to send money quickly, securely and conveniently, without having to go anywhere to make a transfer, is very important to me.”
A new guide “The Connective Power of Remittances” explores the rise of digital remittances, the stories behind these types of payments, and how the digital revolution is helping streamline remittance payments.
By Visa Direct.