International remittances, including airtime top ups via mobile phones, will exceed $25bn by 2018, a surge of 67% from an estimated $15bn in 2015, according to a new research report published by Juniper Research.
The study found a significant upsurge in international remittance activity in the past two years with a number of cross-border mobile remittance services being deployed.
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International mobile money transfers are forecast to grow in frequency in all regions as users become more accustomed to using the service, the report says.
The report, titled Digital Money Transfer & Remittances: Domestic & International Markets 2016-2021, noted that the international remittance market is increasingly being disrupted by a proliferation of smaller, agile ‘pure-play’ digital providers such as PayPal Xoom and WorldRemit.
Research author Nitin Bhas said: "Previously dominated by Western Union and MoneyGram, the international mobile money transfer is becoming increasingly competitive with these new mobile remittance providers offering markedly lower prices than the established players.
He pointed out that London-based start-up TransferWise offers more of a direct threat to the traditional players, as it offers extremely low (0.5%) transaction fees for higher value ($295+) transactions.
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By GlobalDataAdditionally, the study says that mobile international remittances will impact remittances via informal channels by offering a lower-cost alternative to traditional remittance services.
The study also revealed that while international cash remittance growth had slowed, transaction volumes have surged in the airtime top-up market, where service providers are not required to obtain money licences.
However, the international airtime transfer segment represented very high commission rates when compared to international remittance.
Juniper forecasts that the total number of mobile international airtime top up transactions will approach half a billion for the first time in 2018.
