Digital remittances are a lifeline to the world—but they can do more

Learn more about the opportunity to foster innovation in global remittances.

By Yanilsa Gonzalez-Ore, SVP, North America Head of Visa Direct

AUGUST 24, 2023

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The process of sending money to family members or friends in one’s home country, otherwise known as remittances, is a lifeline for many migrant workers around the world. Not only do remittances aid in the prosperity of individual households—helping to pay for things like food, education and unexpected bills—they are also vital to the prosperity of many developing economies around the world. Of the estimated 200 million migrants who send funds to their collective 800 million family members back home,¹ many are turning to digital methods, because app-based digital payments are considered the most secure means for sending funds abroad, according to a recent Visa study.² What’s more is 29 countries received over 10 percent of their gross domestic product (GDP) in remittances in 2022, while seven³ received over 25 percent of their GDP this way.⁴

Digital adoption in North America is behind other countries

The United States and Canada remain some of the top send corridors in the world—meaning markets where remittance funds are most often traveling out of, as opposed to into, these regions to individuals overseas. A recent survey conducted by Visa and Morning Consult found that 63 percent of surveyed remittance users in the United States send remittances at least once per year, versus 57 percent who receive funds in the United States at least once per year. Similarly, of those surveyed in Canada, 64 percent send funds and 52 percent receive money at least once per year.²

Still, that same survey found that while well over half of surveyed U.S. remittance users use app-based digital methods to send or receive funds abroad (61 percent send versus 60 percent receive), surprisingly those surveyed in the United States still rely more on cash, checks and money orders than most countries in the study (10 to 15 percent).²

Remittances are personal

I’ve experienced firsthand just how important these lifeline payments can be. When I immigrated to the United States from the Dominican Republic as a student 25 years ago, I relied on my parents sending money to pay for my everyday living expenses. I never knew exactly when I was going to receive the money to cover my monthly bills, or how much would ultimately be deposited after fees were deducted. Today, with the help of providers that have adopted Visa Direct, I send money to my family back home and they quickly receive the funds directly in their bank accounts.

Advancing remittances requires collaboration between the public and private sector

While Visa, together with many global remitter partners and enablers around the world, has made progress in helping to bring streamlined remittances payments within reach for millions, there is still more that needs to be done. And we won’t reach full digital enablement through technology alone. It will require collaboration between both the public and private sectors to spur further innovation in the space. I’d like to leave readers—specifically policymakers—with a few key considerations to help foster innovation that uplifts everyone:

• Engage in public-private dialogue and partnerships. There is widespread recognition that governments, non-governmental organizations and the private sector need to work hand-in-hand to close the digital equity gap and ensure secure, reliable and fast remittances are available to everyone everywhere.
• Harmonize regulatory environments. Remittances and other cross-border payments are subject to regulatory regimes that can add friction and complexity. Harmonizing and aligning rules as much as possible can streamline the process for everyone.
• Prioritize open interoperability. There is a clear need for a global, interoperable payments platform that is fast and reliable, and that allows service providers to transfer funds from an originating account to a recipient account via card (using a 16-digit primary account number) or bank account (using routing or account numbers). It also needs to handle multiple use-cases and provide strong risk controls, security management protocols, network reliability and settlement or exceptions handling services—with gateways to global card networks, as well as to local debit, AutomatedClearing House or Real Time Payment schemes.

Many families back home, and immigrants to other countries, depend on remittances just to cover the basic needs. And as global money movement becomes increasingly digital, there’s a pressing need for more flexibility, payments interoperability and regulatory harmonization to strengthen these lifelines. Together, Visa and our network of enablement partners as well as the private sector can help prioritize inclusion and make that change possible.

1. United Nations News, Remittances matter: 8 facts you don’t know about the money migrants send back home, June 15, 2019
2. “Money Travels: 2023 Digital Remittances Adoption” report conducted by Visa in partnership with Morning Consult in Dec. 2022 amongst a survey of over 14,000 consumers across United States, Canada, Mexico, Peru, France, Poland, Philippines, Singapore, United Arab Emirates and Saudi Arabia.
3. Countries include: Honduras, Kyrgyz Republic, Lebanon, Samoa, Tajikistan, The Gambia and Tonga
4. Dilip Ratha, Eung Ju Kim, Sonia Plaza, Elliott J Riordan, Vandana Chandra and William Shaw. 2022. Migration and Development Brief 37: Remittances Brave Global Headwinds. Special Focus: Climate Migration. KNOMAD-World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO.

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