Digital Remittances to drive Sustainable Development

23 May,2020

Digital remittance is the key for the development of financial sector in any economy. The digital transformation and technology adoption have helped the financial sector not only to revive but registered a decent growth rate. In article will highlight the how the digital remittance is playing a vital role in sustainable development:

Of late we are accustomed to use more financial accounts and tools. The innovation and adoption of technologies have made financial transactions much easier and safer than ever before. Amid the COVID-19 crisis most of us prefer to do digital payment over any cash transactions. Not only that, the growth of fintech sector helped customers to manage their everyday financial transactions including saving and expenditures. The digital adoption in the financial sector has been boosting the economy and its sustainable development.

When it comes economy, financial sector is a core and its contribution is significant. And, the flow of currently or velocity of currency is the life-line in macroeconomics. Similarly, the value of remittances to India in 2018 was 2.8 percent of the total GDP (Gross Domestic Product).  

According to World Migration Report (Infosheet No 1), the number of international migrants globally in 2019 was 272 million (or 3.5% of the world’s population). India continued to be the largest country of origin of international migrants (17.5 million) and the USA remained the top destination with 5.7 million international migrants.

According to World Bank Report, Remittance inflows improved in all regions and the top remittance recipients were India with $69 billion, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion), and Egypt ($20 billion).

Remittances are expected to continue to increase in 2018, by 4.1 percent to reach $485 billion. Global remittances are expected to grow 4.6 percent to $642 billion in 2018.

Digital remittance is the key for the development of financial sector in any economy. The digital transformation and technology adoption have helped the financial sector not only to revive but registered a decent growth rate. In article will highlight the how the digital remittance is playing a vital role in sustainable development:

 

Cost efficiency

The digital remittance could be useful in achieving cost efficiency. The UN Sustainable Development Goals (SDGs) is collection of 17 goals including the cost reduction. As per the reports, the global average cost of remittance services is stands at 6.94 per cent and it should be less that 3 per cent by 2030. With the implementation of the new technologies the cost of remittances can be reduced and achieve goal before 2030.  The usage of mobile technologies will also be useful in cutting the remittance costs. And the use of e-money could be useful in cutting down the cost further.

 

Time-Saving

The usage of the technology is the right thing for achieving sustainable development goals. The traditional remittances has been time-consuming and it involves a lengthy process of approval from all the aspects. The digital remittance will save ample time of the industry and core sectors and the advanced version of such implementation is likely to bring significant changes in in terms of time.  Saving time is saving the cost, the latest technologies will be useful and secure in saving time as well as making the transaction secure & successful.

Productivity or Number of Transaction

In other way, the digital remittance will useful in saving time and enhancing productivity.  The productivity of bankers and other accountholders will enhance with the best implementation of the digital services. The human errors can also be checked the digital remittance empowered by the latest technologies.

The technology adoption is one necessity. It will not only bring the changes but it will revolutionize entire process aiming the sustainable development. Here are some to the facts that would indicate need for the digital services in banking and remittances. Following observations of Opportunities for expanding financial inclusion through digital technology, a report by World Bank (2017) are enough to narrate why we need digital payment service and remittances:

  • About 230 million unbanked adults in private sector jobs are paid in cash
  • Most unbanked adults receiving private sector wages in cash have a mobile phone
  • About 235 million unbanked adults receive agricultural payments in cash
  • Digitizing agricultural payments could reduce the number of unbanked adults
  • Digitizing domestic remittances could have a big effect in some economies
  • Nearly 1 in 10 unbanked adults saves using semiformal methods
  • Millions of account owners receive private sector wages in cash
  • Millions of account owners receive payments for the sale of agricultural products in cash
  • In many developing economies a third or more of account owners pay utility bills in cash

In India, we can save a huge amount of money by moving digital payments, Reserve Bank of India (RBI) is spending around Rs. 21,000 crores in currency circulation per year.  The digital payment mechanism is the answer for the sustainable development by saving cost, time and money. Technology driven solutions are the best answers for the sustainable development in all the sectors including digital remittance.

To know more about our fintech solutions, please do write to us at info@learntechx.com. Please do follow us at Facebook, Twitter & LinkedIn. Watch out videos on YouTube.

Of late we are accustomed to use more financial accounts and tools. The innovation and adoption of technologies have made financial transactions much easier and safer than ever before. Amid the COVID-19 crisis most of us prefer to do digital payment over any cash transactions. Not only that, the growth of fintech sector helped customers to manage their everyday financial transactions including saving and expenditures. The digital adoption in the financial sector has been boosting the economy and its sustainable development.

When it comes economy, financial sector is a core and its contribution is significant. And, the flow of currently or velocity of currency is the life-line in macroeconomics. Similarly, the value of remittances to India in 2018 was 2.8 percent of the total GDP (Gross Domestic Product).  

According to World Migration Report (Infosheet No 1), the number of international migrants globally in 2019 was 272 million (or 3.5% of the world’s population). India continued to be the largest country of origin of international migrants (17.5 million) and the USA remained the top destination with 5.7 million international migrants.

According to World Bank Report, Remittance inflows improved in all regions and the top remittance recipients were India with $69 billion, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion), and Egypt ($20 billion).

Remittances are expected to continue to increase in 2018, by 4.1 percent to reach $485 billion. Global remittances are expected to grow 4.6 percent to $642 billion in 2018.

Digital remittance is the key for the development of financial sector in any economy. The digital transformation and technology adoption have helped the financial sector not only to revive but registered a decent growth rate. In article will highlight the how the digital remittance is playing a vital role in sustainable development:

 

Cost efficiency

The digital remittance could be useful in achieving cost efficiency. The UN Sustainable Development Goals (SDGs) is collection of 17 goals including the cost reduction. As per the reports, the global average cost of remittance services is stands at 6.94 per cent and it should be less that 3 per cent by 2030. With the implementation of the new technologies the cost of remittances can be reduced and achieve goal before 2030.  The usage of mobile technologies will also be useful in cutting the remittance costs. And the use of e-money could be useful in cutting down the cost further.

 

Time-Saving

The usage of the technology is the right thing for achieving sustainable development goals. The traditional remittances has been time-consuming and it involves a lengthy process of approval from all the aspects. The digital remittance will save ample time of the industry and core sectors and the advanced version of such implementation is likely to bring significant changes in in terms of time.  Saving time is saving the cost, the latest technologies will be useful and secure in saving time as well as making the transaction secure & successful.

Productivity or Number of Transaction

In other way, the digital remittance will useful in saving time and enhancing productivity.  The productivity of bankers and other accountholders will enhance with the best implementation of the digital services. The human errors can also be checked the digital remittance empowered by the latest technologies.

The technology adoption is one necessity. It will not only bring the changes but it will revolutionize entire process aiming the sustainable development. Here are some to the facts that would indicate need for the digital services in banking and remittances. Following observations of Opportunities for expanding financial inclusion through digital technology, a report by World Bank (2017) are enough to narrate why we need digital payment service and remittances:

  • About 230 million unbanked adults in private sector jobs are paid in cash
  • Most unbanked adults receiving private sector wages in cash have a mobile phone
  • About 235 million unbanked adults receive agricultural payments in cash
  • Digitizing agricultural payments could reduce the number of unbanked adults
  • Digitizing domestic remittances could have a big effect in some economies
  • Nearly 1 in 10 unbanked adults saves using semiformal methods
  • Millions of account owners receive private sector wages in cash
  • Millions of account owners receive payments for the sale of agricultural products in cash
  • In many developing economies a third or more of account owners pay utility bills in cash

In India, we can save a huge amount of money by moving digital payments, Reserve Bank of India (RBI) is spending around Rs. 21,000 crores in currency circulation per year.  The digital payment mechanism is the answer for the sustainable development by saving cost, time and money. Technology driven solutions are the best answers for the sustainable development in all the sectors including digital remittance.

To know more about our fintech solutions, please do write to us at info@learntechx.com. Please do follow us at Facebook, Twitter & LinkedIn. Watch out videos on YouTube.