The global remittance market is expected to top $800 billion for the first time ever in 2023, according to Mastercard’s newly released Borderless Payments Report 2023.
The study projects global remittances to reach $810 billion by the end of the year, up from $794 billion in 2022, with the cash inflows accounting for more than 15% of the GDP in 25 low- and middle-income countries. The growth is primarily the result of an increasingly mobile world population, although some serious concerns remain for users of cross-border payments.
Half of the consumers surveyed said they are likely to consider working and living abroad in the next three years, with the percentage highest for those living in India, South Africa, Colombia, and the Philippines. Two in five consumers are now sending more money to another country in order to support their financially struggling families. Mastercard expects this trend to grow, as 41% of senders and 48% of receivers expect the frequency of their cross-border transactions to increase over the next 12 months. Nearly half also plan to increase the value of their transactions.
The research confirms that consumers have become more comfortable with digital cross-border payments, as opposed to in-person transactions. Consumers cited their desire for quick and secure remittance capabilities and built-in confirmation that the funds were received as prime reasons for using digital payments.
Concerns Around Speed and Fraud
Although there’s been an acceleration over the years, serious concerns around cross-border payments remain. Consumers still see them as slower and harder to use than domestic payment methods. Specifically, 52% of consumers said their cross-border payments tend to be slower as compared to a domestic payment, and 43% were less confident making a cross-border payment.
Fraud is also a concern. Although consumers are more likely to say they have been victims of domestic payment fraud, four in ten of those surveyed consider cross-border payment fraud to be the bigger risk.
The most important considerations for these consumers when choosing an online payment provider include:
- Delivers funds in 24 hours or less (cited by 43% of respondents)
- Keeps the transaction, and my personal and financial information, secure (40%)
- Provides confirmation that funds were received (39%)
- Enables me to send funds via mobile app (35%)
- Enables me to track the status of the transfer and when it will arrive (33%)
The Mastercard survey also included small and medium-sized enterprises (SMEs) who pay suppliers or service providers in other countries. Of the SMEs surveyed, 61% said they are relying on more international suppliers than they were 12 months ago. But one-third report having to deal with failed or late cross-border payments, damaging their relationships with critical suppliers.
