Navigating Covid-19 lockdowns: Have digital money transfer platforms stepped up and provided a valuable service when it was needed the most?
COVID-19 has changed a lot this year. When the pandemic started spreading rapidly in early 2020, many of the world's largest remittance sending nations like the United Kingdom, United States, France and Italy gradually imposed nationwide stay at home orders to slow down the rate of infection. The lockdowns had an adverse impact on the money transfer industry, according to the World Bank, global remittances declined by 20% due to pandemic. Juxtapose that figure with the fact that remittances had not had a quarter on quarter decline since the beginning of this century.
The measures implemented by governments everywhere impacted a lot on businesses and every industry. The spread of Coronavirus stopped work; which led to longer term job losses particularly amongst foreign workers who relied on wages to provide financial support to their families and loved ones. Remittance flow to low and middle-income countries has certainly reduced, whether temporarily or permanently is yet to be seen until we know the duration of the pandemic.
However, contrary to the World bank insights on remittances, the decline has almost all been seen on the cash side. Digital money transfer services have actually witnessed a sizable uptick in global remittance as a result of the pandemic
Despite the looming introduction of vaccines we cannot assume that the COVID-19 pandemic will end soon. The need for digital remittances is unlikely to fall, and it's possible that with more people accessing these platforms, the remittance industry could be saved from a severe contraction.
By digitizing the international money transfer process, the industry is breaking down borders and reducing yet another friction point to financial inclusion for 164 million migrant workers around the globe.
The universe of people using money transfers whether for cross border or domestic purposes is quite large. Most people use money transfer platforms to support families overseas and meet daily needs. COVID-19 has brought numerous challenges for individuals and businesses and severely impacted many industries. Regular income and financial security for many families is in doubt.
Right now faster, safer and cheaper money transfer options are the highest priority in the whole world. There are many money transfer services and P2P apps available to the expats and diaspora. They are helping to meet the needs of families in these crucial times of the pandemic.
How COVID-19 affected the customers of online money transfer companies
In this time of the pandemic, moving back or to a cramped brick and mortar office is not a good idea from a public health standpoint.The depopulating of city centers, with vast swaths of the job market now working virtually has changed the face of the high street. A place once normally dependent on millions of footfalls daily to generate merchant traffic has now seen sharp and in some cases drastic declines.
An important corollary of this shift away from the high street, is how consumers are changing their shopping patterns. People are getting more cautious about shopping in public places and mostly going online when shopping and making payments.
A sudden spike in payment processing might bring challenges in handling both merchants and payment processors.
As per Statista, by 2020 the global number of users of a digital wallet user will reach 100 million. This figure reflects the people embracing the cashless economy and contactless payments.
Covid-19 and digital money transfer
Remittances help in alleviating poverty in developing countries but also increases domestic spending. The one thing which we need right now is for people to be spending more. MTOs and IMTOs are the ones ready to offer the robust and accessible easy channels for money transfer services with fair, reliable and affordable exchange rates.
Migrant workers rely on physical money transfer services, and these services work as a pillar of the community. As per records, the recipients of many international remittances are unbanked, which might explain why 90% of remittances currently begin and end with cash.
Well, this indicates that digital remittance operators need to prove that their model has value and make themselves more accessible to those seeking an alternative due to the pandemic.
Digital growth beyond the pandemic
COVID-19 changed the world overnight; it impacted all sectors and especially the migrant community. The impact on this community is under-reported. Foreign travel is almost impossible, migrant families are unable to visit their families, and the pandemic has amplified the pressure on migrants where they are facing striking a delicate balance between supporting themselves or supporting their families back home. Native money transfer operators play a crucial role in redefining remittance and money transfer to families in Covid and post-Covid time.
N2Xpress has proven itself as a predominant payment method throughout sub-Saharan Africa, and South East Asia especially in Kenya, Nigeria, Ghana, India, & the Philippines. It is a digital solution for the traditional banking ecosystem, which is not accessible by the majority of natives. The digital money transfer alternative has been quickly accepted and preferred by people as they realize how powerful, easy and convenient it is to transfer. International money transfer, like N2Xpress, gives highly competitive exchange rates, high security, instant transfer and cheaper fees and helps shoulder some of the stress that migrant families are currently facing.
Why is digital money transferring so essential in this pandemic?
- Payments made possible through social distancing norms
- Convenient service for users
- Easy currency converter
Consumers are switching towards a cashless economy. As many cash-based remittances are forced to close due to COVID-19, the future is brighter for the digital money services business. What money transfer and fintech providers need to understand is that this is an incredible opportunity for them to prove themselves. Borders might be closed, but digital remittances are always open. Expats and migrants are switching to more accessible solutions than traditional and outdated ones. If you are looking to transfer online globally at best rates, then we are here to help.