Mobile international remittances, including airtime top-ups via mobile phones, will exceed $25 billion by 2018, up 67% from an estimated $15 billion in 2015.
This is according to Juniper Research, which found the international remittance market is increasingly being disrupted by a proliferation of smaller, agile 'pure-play' digital providers such as PayPal-owned Xoom and WorldRemit.
The research found a significant upsurge in international remittance activity in the past two years, with a number of cross-border mobile remittance services being deployed. For example, Xoom announced in April that it will expand its services to 13 new recipient countries.
Juniper found international mobile money transfers are forecast to grow in frequency in all regions as users become more accustomed to using the service. Higher value transactions are also forecast, going forward.
This as the world prepares to celebrate International Day of Family Remittances tomorrow, 16 June.
"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," says research author Nitin Bhas.
In addition, the research found mobile international remittances will have an impact on remittances via informal channels - for example, the 'grey remittance' market composed primarily of cash - by offering a lower-cost alternative to traditional remittance services.
Airtime top-up boom
The research also found 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.
Juniper says the simplicity of airtime and the need to facilitate basic P2P money flow means these still represent the initial deployments in many markets. It also enables the sender of the remittance to control precisely what that remittance will be used for.
However, the international airtime transfer segment represented very high commission rates when compared to international remittance. Nevertheless, Juniper forecasts that the total number of mobile international airtime top-up transactions will approach half a billion dollars for the first time in 2018.
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