Remittance flows in Asia Pacific have softened in the past year amid persistent inflationary pressures and tightening labour markets in the high-income host economies of overseas foreign and migrant workers.
Yet, high growth emerging markets in Asia Pacific, such as mainland China, India and the Philippines remain a bright spot for continued remittance activity, driven by the pursuit to drive positive change and progress at home.
According to Visa’s annual “Money Travel: 2024 Digital Remittances Adoption” research report, these markets continue to beat the odds despite macroeconomic headwinds that have resulted in remittances decreasing across the globe.
- India, the world’s top remittance receiving market in 2023, continues to account for the highest remittance outbound and inbound flows in the region, as the majority send (86%) and receive (85%) money at least once per year.
- The Philippines, too, saw limited change from the year prior, as 79% and 84% of Filipinos expect to send and receive money respectively, at least once per year.
- Driving consistent growth rates are the increasing prevalence of digital platforms to facilitate remittance transactions. Consistently favoured globally, markets such as India, mainland China and Singapore go as far as exceeding the global averages in the proportion of remittances sent and received in these markets.
The importance of swift, convenient, and secure payments for supporting overseas education is especially highlighted in markets like mainland China and India, largely driven by a desire to enhance future opportunities for the next generation.
“The power of remittances in uplifting ecosystems and economies across the globe is well-understood,” said Chavi Jafa, Head of Commercial and Money Movement Solutions, Asia Pacific, Visa.
“However, what can’t be overstated is the outsized impact of digital solutions in accelerating and strengthening the impact of every single dollar sent and received. Notably, remittances via mobile money increased by 48% in 2021, highlighting a shift towards digital wallets especially in Asia Pacific and Latin America.”
Amid declining remittance rates, digital is a core driver of growth
Visa’s “Money Travels: 2024 Digital Remittances Adoption” research report examines consumer habits and preferences of nearly 45,000 remittance senders and receivers across 20 markets. Highlights of the study include:
- While remittance usage declined in most markets due to inflation, there are bright spots on the horizon. More than half (58%) expect to send more or the same amount of money overseas this year with mainland China (91%), India (74%), and the United Arab Emirates (73%) leading the way.
- Digital app-based remittances are the top method amongst consumers across all surveyed markets globally, except in the UAE and Saudi Arabia. Globally, 67% of remittance users sent or plan to send using digital apps. Across Asia Pacific, digital apps were universally lauded for superior user experiences underscored by accessibility.
Markets such as India, the Philippines, and Singapore exceeded global averages, with over 70% of remittance users having used an app-based digital payment method to send and receive money internationally. - However, accessibility can sometimes come at a cost. Globally, over one-third (36%) of respondents have been offered a free transfer when sending cash, checks, or money orders, only to find out there were hidden fees. The lack of transparency in service terms is also an issue in selected Asia Pacific markets, dampening consumer experiences.
Up to 50% of respondents in the region were offered a free transfer via digital means only to find out that there were hidden fees. This pain point is especially acute in all Asia Pacific markets, especially in India (55%), Philippines (53%) and mainland China (51%).
Jafa continues, “Across Asia Pacific, governments are focused on widespread digitalisation of their economies — and in no area has this been more pronounced than in the modernisation and digitisation of financial services across the region.
“As consumer demands and habits evolve in turn, we’re now seeing these efforts pay off first-hand as Asia Pacific leads in the adoption of app-based remittances compared to other markets across the globe. With the digital agenda taking centre stage for policymakers in the region, the adoption of digital payments is set to intensify in the years to come.”