Overview: Remittance refers to that process in which transfer of money is done by a foreign worker to any individual in their home country. Most of developing countries are depending on the remittance which comes from the foreign worker. Not only has this the GDP of developing countries also affected by the remittances received and lead to the economic growth. In the past few years the global remittances is totaled in billions. Some countries such as India, China and others receives tens of billions of US dollars as remittances. Accordingly to the World Bank, it is estimated that remittance will total USD 585.1 billion in 2016. Moreover, according to the report analysis, Remittance Market Research Report’ suggests that remittance is having significant impact on the development of the economy growth with the increase in the income of the foreign workers.
Outlook: Transfer of money at home places from abroad through bank is bit costly and time consuming process whereas converting currencies also occur loss and need excessive time for transfer approvals. For making effective transaction blockchain platforms are established in which usage of bitcoin is done. The platform of blockchain are able to reduce fees and transfer money more quickly. The old system with the banks has been bogged down and blockchain technology is creating a new payment network that can be helpful majorly for the foreign workers as well as businesses. The applications of blockchain for remittance is broadly classified across the globe which includes no higher cost of transfer, high speed, simplified experience, elimination of middle man, security measures, privacy measures and others. Moreover, governments are using this technology related to concern over terrorists and criminals to move their money around the world. Blockchain is observed as opening the door to working with underdeveloped markets, particularly those in Africa as well as in countries throughout Asia. Whereas, the World Bank estimated that India had USD 69 billion as remittance in 2015 while China had USD 64 billion, Mexico had USD 25 billion and Nigeria had USD 21 billion. Additionally, evolution is continue in the technology of blockchain across the all types of applications which will help in remittance and generating more options related to sending and receiving money anywhere in the world. Therefore, the blockchain is very much reliable and secure thus prevents hackers. Not only has this, the key players are doing well in developing more application and reducing the average cost of transfer.
Market Size: According to the report, ‘Remittance Industry Analysis’ suggests that the remittance in many countries has gone up and in the coming years it will grow more significantly. Globally, significant growth is seen in the urbanization and there is tremendous increase in the urban population. Due to the transparency also the usage of blockchain is done majorly and can be easily accessed by the users. The rapid growth in the remittance industry is currently influencing the global GDP at a rate of 2.5% which is observed by the World Bank. Remittances from foreign workers made up a big chunk majorly of many Asian Nations’ GDPs. Additionally, the blockchain is the fastest-emerging technology and it is the key to a safe, cost-efficient, and fast money transfer channel that can support the needs of the Asia remittances industry.
Competition: Transfer of money can be done through bank to bank or with the help of independent agencies whereas, an independent agency includes PayPal, RIA, Western Union and others and banks include Bank of America, DBS Bank, Citi Bank and others. In addition, establishment of many new companies is done in the past recent year which includes Money Gram, Western Union and others which are resistant to adopt this new technology whereas willing companies will drive the market of remittances and providing much reliable, cheaper and faster money transfer using blockchain network. Moreover, remittances in Southeast Asia is a huge market, and many believe it’s ripe for innovation. Whereas, key player such as Coins.ph partners with banks and other financial institutions to make the remittances possible more significantly at a reasonable fee.
Conclusion: With the more development in the technology of blockchain in the remittance industry will result in the entire industry. Many key players are doing their job more efficiently and investing more in the industry which will lead to growth in the coming years over the decades and increase the knowledge related to blockchain also admire the growth of the remittance industry.
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Ankur Gupta, Head Marketing & Communications