Asia-Pacific Cross-border and Remittance Service Market

The APAC Cross-border and Remittance Service Market is in its growth stage and it is showing promise of significant growth offering lucrative opportunities in the form of advancement in technology such as AI and Machine Learning. The Market is projected to grow at a staggering CAGR of 23.5% to reach a Market Size of USD 269.78 Billion in 2026 from a value of USD 76.03 Billion in 2020.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Post COVID-19 Recovery
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Further Reading
Appendix

Definition / Scope

Digital remittance, or the electronic transfer of funds from foreign workers to their home countries, is a strong economic growth engine. Improving the capabilities and scope of this money transfer channel has a big impact on people’s lives and represents a significant business opportunity. As the epidemic has delayed cross-border money transfers, many remittance companies have forced to learn how to perform in a digital-first environment. In order to provide lower fees to its clients while being profitable, they must keep costs under control. They must also guarantee that their legal obligations are met and that they are prepared for long-term success.

Cross border payment refers to any financial transaction involving individuals, businesses, banks, or payment settlement agencies from two or more separate nations. These transactions can take place between neighbors or non-neighbors. Both parties may use the automated services supplied by a third-party foreign currency exchange platform to complete the cross-border payments.

Cross-border Payments Category

We are experiencing a very unique development in the global payments business with the rise of cross-border retail transactions. In today’s payments sector, a consumer might be an individual, an agency, a corporate unit, or a government. As a result, we’ll use these linkages to classify agents in a modern payments ecosystem.

Person-to-Person (P2P)
Person-to-Business (P2B)
Person-to-Government (P2G)

Depending on the type of remittance, the Asia-Pacific digital remittance market is divided into inward digital remittance and outward digital remittance.

The Asia-Pacific digital remittance market is divided into three categories: banks, money transfer operators (MTOs), and others.

The research looks at the current digital remittance market developments in Asia-Pacific countries like China, Japan, India, Hong Kong, Singapore, Taiwan, Indonesia, and the rest of Asia-Pacific.

Market Overview

The Asia-Pacific Digital Remittance Market is expected to grow at a CAGR of 23.5%, from USD 76.03 billion in 2020 to USD 269.77 billion in 2026.

By using their in-house payment infrastructure, all major participants are exploring the new Payment-as-a-Service (PaaS) and remittance-as-a-service (white label) business models. From USD 2.34 billion in 2020 to USD 8.47 billion in 2026, the APAC PaaS market is predicted to grow at a 23.9% compound annual growth rate (CAGR).

The COVID-19 pandemic is predicted to have a positive impact on the market. Many people now use digital wallets and internet platforms to send money to their relatives and friends all around the world. Due to global constraints on migration, the demand for global remittances is likely to rise.

Cross-border payments and remittance transactions look to most customers as a commodity; as a result, fee structures must be reduced to avoid appearing as a pain point throughout the transaction, particularly in the digital channel.

Furthermore, the growth of digital adoption in cross-border payments and Remittance Service can be ascribed to the rapid growth of mobile penetration around the world. The use of omnichannel, mobile-first models that allow many touch points between customers and service providers will skyrocket. Digitization improves cost-cutting strategies.

New payment technologies, such as Blockchain and Distributed Ledger Technology (DLT), can reduce transaction costs and transfer times while also generating real-time data on critical elements (e.g., customer behavior). By confirming the origin and legitimacy of a product as it passes through the value chain, DLT helps alleviate cross-border transaction and settlement problems.

Market Risks

The Major Risks for new entrants in the APAC Cross-Border and Remittance Service Market are

Fragmented Market

The APAC cross-border and Remittance Service is highly fragmented, with a few conglomerates, medium-sized and tiny start-up enterprises accounting for the vast majority of market share. The fragmentation of the Cross-Border and Remittance Service industry is caused by lower entry barriers, a lack of economies of scale, and severe market competition. A fragmented market will benefit businesses with lower margins and higher costs. They don’t have the advantage of scale when dealing with other countries.

Low Barriers for Entry

It is for a new player to enter and supply services in the APAC cross-border and Remittance Service market. If it isn’t tough, it isn’t expensive; regulatory barriers are low, proprietary technologies aren’t necessary to manufacture or offer a service, and economies of scale are irrelevant. Then it’s pretty simple for new players to participate and compete for the earnings that could be made.

Top Market Opportunities

Some of the Key Opportunities for the Market Players in the APAC Cross-Border and Remittance Service Market include

Blockchain

It’s safe to assume that financial services have surpassed all other industries in terms of blockchain adoption. Blockchain software, which is based on Bitcoin, is now operating as an automatic public log for transactions, paving the way for a slew of new cross-border payment options. Popular payment networks like Visa and MasterCard have been vociferous in their support for the use of distributed ledgers powered by blockchain to replace their old networks. In B2B payments and cross-border settlements, both Visa and MasterCard now use blockchain-based distributed ledgers.

Blockchain is predicted to mature into an Omni-Commerce platform for security and financial tracking systems by 2022. With a “immutable, security-rich, and transparent shared digital ledger,” Blockchain now delivers an unprecedented level of transparency that helps decrease fraud and errors.

New payments

New payment methods are growing more popular because they offer more cost-effective and speedier alternatives. Fintechs, digital banks, big tech, payment service providers (PSPs), card networks, closed-looped networks, and other non-traditional companies are all contributing to the expansion of cross-border transactions, which are estimated to reach approximately $156 trillion in total payment flows by 2020.

The opportunity

PayDirect is a service that enables our clients to provide a better retail customer experience for cross-border payments in local currency, including faster settlement, greater transparency, and reduced costs.
Coin Systems can act as a payment rail, allowing a domestic network to clear many currencies.

Contactless payments

Contactless payments are another payment method which you’ll see growing rapidly in the year 2021. Customers can make contactless payments by just waving their smartphone across the reader, as the name implies. Waving is a much faster and more convenient approach than inserting a card.

Contactless payments are also faster and more secure than PIN payments since the encrypted data is sent directly to the point-of-sale device.

Many firms, such as Samsung, Apple, and Google, already have contactless payment systems in place, such as Samsung Pay, Apple Pay, and Google Pay. All a consumer has to do to make a payment is download the app, add a card by entering card information, and then wave their phone over any reader. NFC (near-field communication) technology allows for contactless payments. That is why they are often referred to as NFC payments.

Many nations accept NFC payments. In China, for example, it is accepted as a form of payment for public transportation. This technology is utilized in Japan to deliver information about identification cards.

Market Drivers

The Major Factors driving the growth of the APAC Cross-Border and Remittance Service Market include

Reduced Remittance Cost and Transfer Time

Cross-border payments have become insignificant in cost, instant, auditable, and accessible to everyone thanks to the adoption of digital transfer networks such as mobile phone technology, mobile money, digital currencies, distributed ledgers, electronic identity, and others to remit money. The adoption of digital remittance is expected to reduce reliance on cash agents in both sender and receiver countries, which is now contributing to the maintenance of high transaction fees.

It is also expected to address many of the risks, hurdles, and costs associated with security and know-your-customer (KYC). As a result, banks and money transfer companies use digital technology to offer Remittance Service at considerably cheaper costs than traditional over-the-counter services, increasing digital remittance adoption in the region.

Furthermore, the use of modern technology and government-led public awareness initiatives significantly lower remittance costs. The usage of digital remittance is likely to increase as a result of this reduction. Transparency projects like SendMoneyPacific, for example, allow remittance senders to compare prices and learn about the advantages of innovative digital transfer providers. This is expected to increase consumer awareness of digital remittance.

Rise in Internet and Mobile Penetration

The market is likely to benefit from the increase in internet and mobile penetration in Asia-Pacific. In Mid-2021, Asia-Pacific had 4.327 billion internet users, representing 64% of total penetration, and 1.23 billion unique mobile internet users, representing 62% of total penetration. As customers transfer money through digital platforms, the rise in internet and mobile penetration, as well as the usage of digital media to remit money, has become popular in this region.

Several Indian banks, like ICICI and State Bank of India (SBI), have established branded online Remittance Service for nations like Singapore. Furthermore, the Philippines’ high mobile usage and strong remittance industry may position the country as a global leader in mobile remittances. Non-bank businesses such as Remit2India, Xoom, and Western Union are also enabling access to their services via mobile and tablet devices, which is a positive development for the sector.

Payment automation and digitalization

Business expansion is projected to be aided by payment automation and digitization. Many digitally savvy consumers are choosing for digital remittances, moving the market forward. These clients choose digital remittances because of the faster transfer time. Rapid urbanization and industrialization are attracting residents from many rural and semi-rural areas to urban areas. In quest of work or education, many people are relocating to numerous countries and locales. As a result, the number of cross-border transactions is on the rise. As a result, it is projected that demand would increase.

High level of security and privacy provided by digital Remittance Service

Digital Remittance Service provide consumers with a high level of protection and anonymity. As more financial institutions and banks throughout the world choose for a data-driven and open environment, these services are projected to become the preferred means of remitting money. Several banks and financial organizations throughout the world are focusing on expanding their business networks to make their financial and banking services available to everyone. Customers frequently prefer these services because of the inexpensive remittance fees.

Market Restraints

The Primary Factors Restraining the growth of the APAC Cross-Border and Remittance Service Market are

Fluctuating Exchange Rates

A remittance transfer will almost always require a foreign exchange transaction, most commonly a conversion from the sending country’s currency to the receiving country’s currency. To determine the overall cost of the transfer, the sender must first determine the exchange rate that will be used. Because different RSPs are likely to employ different exchange rates that fluctuate from day to day, The margin could be a reflection of the RSP’s uncertainty. Many RSPs only deal in small amounts of foreign currency. currency and must request it from a bank or other foreign exchange broker on their behalf currency to this day RSPs often charge senders an exchange rate that includes a margin in practice. a rate that is higher than the existing interbank or wholesale market rate.

As a result, the RSP may not know what currency rate it will encounter while forwarding the funds, and a margin provides some protection if exchange rates fluctuate negatively. However, rather than a margin, this protection might come from an explicit price. As a result, the margin is simply another type of fee – one that is hidden from the sender (who is unlikely to be aware of the current interbank market rate).

Weaknesses in the infrastructure

Domestic financial infrastructure is often inadequate, particularly in receiving countries. In underdeveloped nations, for example, the banking network or other possible agent networks may be limited, particularly in rural areas. For many receivers, this is causing a major physical access issue. Even when agents are present, the domestic payment mechanism required to send monies to disbursing agents could be problematic. It could be slow and unreliable, or it could be lacking in geographic coverage. The lack of uniformity for remittances, for example, can generate problems with cost and speed. different kinds of payment instruments and a lack of compatibility between systems or arrangements, implying that their geographic coverage potential is not completely realized. This could be especially true for transaction infrastructures like automated teller machines (ATMs) and electronic funds transmission at the point of sale (EFTPOS).

Industry Challenges

The Key Challenges affecting the growth of the APAC Cross-Border and Remittance Service

Exclusivity conditions

Exclusivity conditions exist when an RSP permits its agents or other RSPs to offer its remittance service only if they do not offer any other remittance service. Exclusivity clauses can sometimes be seen in negotiated or franchised services (although they are uncommon aren’t a requirement for such services). The problem with such criteria is that they enhance the chance of de facto local monopolies by restricting alternatives.

As a result, exclusivity circumstances in recipient nations can be extremely unfavorable. As previously stated, the financial infrastructure may be underdeveloped. If a community has just one retail or financial shop, for example, an exclusivity constraint would suggest that there was only one remittance service accessible. The problem is worsened if the exclusivity requirement is applied to big networks of agents (e.g., post offices, telecommunications companies, or significant retail chains) and so has a widespread influence.

The Pressure to Lower Fees Is Affecting MTOs

International organizations (G20, UN, etc.) are putting a lot of pressure on the big players to cut the costs of remittances for consumers, therefore their prices are being scrutinized more closely. Given that banks charge the highest costs, one might expect them to be the hardest hit by this trend, yet banks are well-diversified businesses with numerous revenue streams. In comparison to an MTO, which is their entire raison d’être, international payments are not a fundamental business for a bank. A transaction fee and the foreign exchange (“FX”) spread charged to the consumer are the two sources of revenue for international money transfer providers.

New players are raising competition by using fees as a visible differentiation to promote themselves versus incumbents. Building their company models entirely on digital platforms reduces their fixed expenses, and their modern, cleaner technological operational platforms provide customers with faster turnaround times. As the sector transitions to one that resembles a commodities market, players must discover new ways to set themselves apart from the competitors. This can be accomplished through services such as prepaid debit cards or business payroll services, all of which provide consumers with more options and usefulness.

Technology Trends

Dominance of mobile wallets

In 2019, roughly 2.1 billion customers will use mobile wallets, according to a survey by RetailDive. And this number is only expected to rise in 2020. A mobile wallet solution is just a mobile application that attempts to imitate the functionality of a physical wallet. You can send money to other users, receive money from other users, and save money in your mobile wallet with the use of a mobile wallet. Not only that, but a mobile wallet may be used to pay utility bills, purchase tickets, receive incentives, and much more.

According to Appventurez, the volume of mobile wallet transactions would increase to 274.4 billion (approx.). As a result, many major corporations, like Apple, Google, and Samsung, have begun to offer mobile wallets to facilitate this transaction. Those wallets, on the other hand, are all brand and company specific. More businesses will attempt to develop their own brand-specific wallet in the coming years.

With the use of a mobile wallet, businesses can quickly assess their customers’ usage. In a mobile wallet, there are multiple parties involved. A mobile wallet, for example, is built by a single corporation, such as Google. After that, a different company creates the loyalty cards and credit cards. The Google wallet is also used by a large number of merchants.

Pricing Trends

The costs associated with the processing of the cross-border and Remittance Service vary region by region and it can vary significantly based on the Remittance Service Provider (RSP) and the exchange rates pertaining in the region, so it is obvious that a fluctuating exchange rate would cause significant pop in the processing cost of the cross-border and remittance service during the peak hours of business.

Remittances are currently more expensive than other types of payments. They are usually dispatched to EMDEs, which can have the biggest frictions, such as volatile currency, legacy technology, and de-risking. The cost of remittance varies greatly between corridors.

Regulatory Trends

Regulatory Trends in China

The Service Trade Foreign Exchange Management Policy Q&A was recently released by the State Administration of Foreign Exchange (SAFE). SAFE clarified bank processes for processing foreign exchange payments and receipts for TP adjustments (hereafter referred to as “Clarification”).

Cross-border payments should be separated into two categories (current account and capital account) under the SAFE supervisory system, each of which is governed by various SAFE regulations. The existing local pilot projects for TP adjustment payments, on the other hand, do not have a unified approach to the eligible payment category. This Clarification aims to harmonise bank procedures for processing foreign exchange receipts and payments related to TP adjustments, stating that TP adjustment payments shall be handled through the current account, as per Circular Huifa [2020] No. 142. (“Circular 14”). The Clarification offers advice on three different schemes:

TP adjustments

The Clarification states that the required supporting documents for this scheme should include any relevant written documents from tax authorities or customs, any profit adjustment agreements, invoices, and any other relevant materials, in addition to reiterating the general principle set forth in Circular 14. Furthermore, the payment should be executed in accordance with the original trade type (i.e., goods or services) between the parties. This effectively elevates TP adjustments to the same level as transactions for which TP adjustments are made for foreign currency purposes, allowing banks to process remittances based on TP adjustments.

Cost sharing adjustments

The Reply clarifies the position on required supporting papers (e.g., distribution agreements, financial statements, invoices, etc.) and the detailed reporting sub-category from the SAFE perspective, similar to the TP adjustments scheme.

Regulatory Trends in India

Money Transfer Service Scheme (MTSS) is a method of sending personal remittances to Indian recipients from overseas. Only inward personal remittances into India are permitted, including remittances for family upkeep and remittances for foreign visitors visiting India. The plan involves a collaboration between reputable money transfer organizations in other countries, known as Overseas Principals, and agents in India, known as Indian Agents, who will deliver monies to Indian beneficiaries at current currency rates.

Regulatory Trends in Singapore

Payment services is a rapidly expanding business, and new payment solutions are making digital payments for customers faster, cheaper, and more convenient. These changes have resulted in new risks necessitating a review and modernization of the MAS’s procedures. Regulatory framework for payments The PS Act (Payments Service Act) took effect on January 28, 2020, and merges requirements formerly found in the PS(O)A and MCRBA into a single document of legislative action The PS Act broadens the regulatory scope of the MAS to cover new risks posed by current businesses. payment services, as well as the addition of additional payment services. With a risk-based and modular approach, a regulatory strategy. The PS Act is a flexible regulatory framework that minimizes the consequences of a payment service provider’s failure while fostering Singapore’s progressive payments sector.

Post COVID-19 Recovery

Even before the COVID-19 pandemic, the remittance sector was undergoing significant changes, but the pandemic has made market dynamics more complex than ever before. With more than half of the world’s population under siege, it’s critical to debate and assess the crises’ impact on service providers, clients, and the remittance business as a whole. The COVID-19 pandemic is predicted to have a positive impact on the market. Many people now use digital wallets and internet platforms to send money to their relatives and friends all around the world. Due to global constraints on migration, the demand for global remittances is likely to rise.

Market Size and Forecast

The Asia-Pacific Digital Remittance Market is expected to grow at a CAGR of 23.5%, from USD 76.03 billion in 2020 to USD 269.78 billion in 2026.

The remittance sector is refocusing its efforts to become more digitally remastered. The adoption of digital channels is driven by factors such as an increase in the number of clients in Asia-Pacific who are comfortable using mobile devices, increased competition from new entrants, and margin constraints due to a growing consensus on cutting remittance transaction fees. There are various advantages to adopting digital remittances, including convenience, speed, lower costs, the removal of time-consuming form-filling processes, the use of agents and e wallet use and codes and others, have shifted the focus of consumers toward digital transactions for money remittance.

The COVID-19 pandemic caused widespread disruption in 2020, which provided growth prospects for cross-border and remittance service companies. Digital adoption rates have increased in the market (25% YoY growth rate in 2020).

Inward Digital Remittance to dominate the Market based on Remittance Type

The Asia-Pacific digital remittance market is divided into inward digital remittance and outward digital remittance, depending on the type of remittance. Due to continued expansion in the digital payment industry and the rise in digital spending by consumers, the outward digital remittance category is predicted to be the greatest contributor to the Asia-Pacific digital remittance market projection period.

In 2020, the outward digital remittance sector dominated the market, accounting for more than 59% of revenue. People who live in other nations donate money to their families in their native countries. Financial organizations and banks are assisting these individuals in sending money back to their families in a timely and secure manner. Banks and financial institutions around the world are focusing on charging low costs and expanding their customer base.

The Outward Digital Remittance segment attained a Market Value of USD 44.85 Billion in 2020 and is poised to grow at a CAGR of 20.4% to reach a Market Size of USD 136.62 Billion in 2026.

Over the projected period, the inbound digital remittance market is expected to grow at the fastest rate. Over the projection period, the category is expected to rise due to the increasing acceptance of mobile payment technologies for money transfer among migrants. To take advantage of the Immediate Payment Service, a number of financial institutions and banks throughout the world are focused on implementing real-time banking technology (IMPS). Furthermore, banks can use this technology to provide services to both non-resident and resident consumers.

The Inward Digital Remittance segment accounts for 41% of the Market Share and is projected to grow at a CAGR of 27.3% to reach a Market Size of USD 132.78 Billion in 2026 from USD 31.2 Billion in 2020.

Banks are the largest contributor toward the market growth based on Channel

The Asia-Pacific digital remittance market is divided into three categories: banks, money transfer operators (MTOs), and others. Because banks have been incorporating technologies into their Remittance Service to promote speedier transfer times, banks have been the major contributor to industry growth. Furthermore, due to a substantial movement toward digitalization in the cross-border money transfer market, banks are fast implementing digital innovation to obtain a competitive advantage over other companies.

Many banks in APAC are concentrating on incorporating technology into their remittance platforms in order to reduce transfer times. Furthermore, banks are rapidly embracing digital innovation in order to get a competitive advantage over their rivals. In addition, the cross-border money transfer industry’s ongoing shift toward digitization is likely to drive segment growth over the forecast period.

Money Transfer Operators attained a Market Share of 49% and generated revenues to the tune of USD 37.25 Billion in 2020 and is projected to grow at a CAGR of 24.6% to reach a Market Size of USD 139.39 Billion in 2026.

Banks accounted for 38% of the Market Share and are expected to grow at a CAGR of 20.1% to reach a value of USD 86.67 Billion in 2026 from USD 28.89 Billion in 2020.

The other channels reported for 13% of the Market Share and is anticipated to reach a Market size of USD 35.4 Billion in 2026 from a value of 9.88 billion in 2020 growing at a CAGR of 23.7% over the forecast period (2021 – 2026)

Singapore is expected to grow at the highest rate during the forecast period

The research looks at the current digital remittance market developments in Asia-Pacific countries like China, Japan, India, Hong Kong, Singapore, Taiwan, Indonesia, and the rest of Asia-Pacific. China was the largest revenue contributor to the market in 2018, owing to a significant move toward digital payment. Chinese market companies are concentrating on the deployment of electronic cross-border Remittance Service. Furthermore, due to decreased fees charged by remittance service providers, digital remittance has grown significantly in China, making the process of sending and receiving money much easier than the traditional way.

In the Asia-Pacific digital remittance market share, Singapore is predicted to expand at the fastest rate throughout the projection period. This is due to the extensive use of communication apps or social networking among international workers, and it is expected to be a fantastic opportunity for FinTech firms. Furthermore, leading market players are growing their presence in this region. For Instance, TransferGo joined with Currencycloud, a global payments network, in January 2020. The goal of the alliance was to make cross-border payments easier. With this cooperation, the remittance service has access to Currencycloud’s network, making it easier and potentially faster for users to send money to 19 more countries, including Singapore, Japan and Malaysia

Market Outlook

The Asia-Pacific Digital Remittance Market is expected to grow at a CAGR of 23.5%, from USD 76.03 billion in 2020 to USD 269.78 billion in 2026.

Remittance companies are concentrating their efforts to become more digitally savvy. Factors such as an increase in the number of clients in Asia-Pacific who are comfortable utilizing mobile devices, increased competition from new entrants, and margin restrictions due to a developing consensus on reducing remittance transaction fees are driving the usage of digital channels. The convenience, speed, and cheaper costs of digital remittances, as well as the elimination of time-consuming form-filling processes, the employment of agents, and e wallet use and codes, among other benefits, have moved customers’ attention to digital transactions for money remittance.

The remittance sector was undergoing substantial changes even before the COVID-19 epidemic, but the pandemic has made market dynamics more complex than ever before. With more than half of the world’s population under siege, it’s vital to discuss and examine the impact of the crises on service providers, clients, and the remittance industry as a whole. The pandemic of COVID-19 is expected to have a beneficial effect on the market. Many people now send money to relatives and friends all around the world using digital wallets and online platforms. The demand for worldwide remittances is expected to rise as a result of global movement restrictions.

Because of the rising use of mobile payment applications for money transfers in developed nations, the inward digital remittance market is expected to increase significantly over the projected period.

Many banks throughout the world are concentrating on incorporating technology into their remittance platforms in order to reduce transfer times. Furthermore, banks are rapidly embracing digital innovation in order to get a competitive advantage over their rivals. In addition, the cross-border money transfer industry’s ongoing shift toward digitization is likely to drive segment growth over the forecast period.

Because a substantial number of fund transactions are performed by immigrants studying or working in many countries, the personal end-use segment is likely to maintain its dominance over the forecast period.

Businesses in the Asia Pacific region are increasingly engaging with their abroad counterparts for activities such as leisure, business, medical, entertainment, and education, which includes money transfers. As a result, the regional market is predicted to develop throughout the forecast period.

Technology Roadmap

Market participants have created Money Transfer Platforms (MTPs) that employ APIs to generate a variety of Remittance Service, such as real-time cross-border transfers, local ACH transfers, monies delivered to a debit card account, embeddable payouts, and account payable tool integration. In the medium term, more financial institutions will invest in APIs as the value of cross-border payment transactions conducted through APIs rises.

Companies in the retail, eCommerce, telco, and IT sectors will combine to provide payment capability in the next 5 to 10 years, creating significant opportunities for FIs to further accelerate the adoption of digital payments. The information gathered during financial transactions might be used to develop up-to-date and detailed customer profiles, which could be monetized. Data gathering monetization could potentially be utilized to reduce the entire transaction cost of payment processing. Service providers can run analytics and identify distinctive trends in client behavior using real-time data updates.

Furthermore, as financial institutions try to reach greater compliance standards and adopt efficient KYC processes, the integration of Artificial Intelligence (AI) and Machine Learning (ML) has enhanced the quality and adoption rate of digital onboarding. As a result of this approach, cross-border payments and Remittance Service are linked with regional rules and security needs, improving digital security and risk management processes.

Distribution Chain Analysis

The Supply Chain of the APAC Cross-border and Remittance Service Market is as in the below figure

Competitive Landscape

The market is fragmented to an extent. To strengthen their position in the market, leading companies are pursuing a variety of strategies, including product innovation, partnerships, R&D activities, mergers and acquisitions, strategic joint ventures, and geographic expansion. Money transfer software facilitates the transmission of funds between companies and between companies and their clients. B2B clients and finance professionals mostly use money transfer software and remittances to make online payments.

Key Market Developments

April 2020: The Thai bank Siam Commercial Bank partnered with Azimo (SCB). Customers from Europe could make fast payments to SCB bank accounts in Thailand as a result of the arrangement.

April 2020: Digital Wallet Corporation collaborated with Aeon Bank following which the company would be offering Aeon Bank ATM Card. The card is accepted at all AEON Bank ATMs in Japan. Smiles Mobile Remittance, a mobile international money transfer service popular among expats in Japan, has launched a new and convenient service.

March 2020: Arcus has formed a relationship with 7-Eleven, a multinational retailer. Arcus has added a number of new fintech payment options to their mobile app, with a focus on cash-based customers. 7-Eleven employs Arcus’ technology to improve Latin American customers’ cash payment experiences by making them simpler and more integrated. Arcus’ relationship with 7-Eleven demonstrates Arcus’ commitment to providing everyone with a great financial services experience.

Competitive Factors

To strengthen their position in the APAC Cross-border and Remittance Service Market, leading competitors are pursuing a variety of strategies, including product innovation, collaborations, R&D activities, mergers and acquisitions, strategic joint ventures, and geographic expansion.

Partnerships, Collaborations, and Agreements

In April 2020: Geoswift, a payment technology firm, has partnered with NIUM. The cooperation aimed to make it possible for international consumers to send money directly to bank accounts in China via UnionPay. Users can make real-time fund transfers into UnionPay card accounts at 14 Chinese banks, while another 50 banks will be able to fund accounts at another 48 banks in the market.

In March 2020: For international transactions, TransferWise announced a cooperation with China’s Alipay. The arrangement allowed TransferWise’s 7 million+ users to transmit Chinese Yuan to Alipay users from 17 different currencies.

Acquisition and Mergers

In October 2019: Speed Money Transfer Philippines (SMTP), a remittance and foreign exchange provider, was acquired by Digital Wallet Corporation. In the Philippines and Australia, SMTP is active. The company was renamed Digital Wallet Philippines after the acquisition. The purchase boosted the company’s ability to provide digital wallet services in Asia.

Product Launches and Product Expansions

In December 2019: NIUM (previously known as InstaRem) has announced the launch of an e-KYC tool for Malaysian residents and expats who need to make regular international payments. Users from any part of Malaysia can get KYC done from the comfort of their home or office using NIUM’s totally digital e-KYC process, which takes only a few minutes to complete.

Key Market Players

The key players operating in the Asia-Pacific digital remittance market industry include InstaReM, Remitly, Inc., Flywire, SingX Pte Ltd., Azimo Limited, WorldRemit Ltd., TransferWise Ltd., Ripple, MoneyGram, and TNG Wallet.

Nium (also known as Instarem) provides cross-border payment and money transfer services for individuals and businesses. Peer-to-peer consumers and freelancers are the primary targets of the company. Instarem charges users an amount that covers intra-day Forex swings as part of the transaction, without charging any additional transaction costs like banks. It is a Fintech startup based in Singapore that provides consumers and businesses with digital cross-border money transactions.

Remitly Global Inc. is an immigrant-focused digital financial services company. Customers served by the company are mostly immigrants from underdeveloped nations who have left their homes to pursue new chances. The company provides cross-border Remittance Service through its mobile application. It offers an end-to-end service, allowing customers to transfer money home in minutes after connecting their banking information to the app. Customers and their relatives can also monitor the progress of their transactions in real time. Digital experience, onboarding process, unified site for account administration, and customer assistance are among the company’s highlights. It has worked with a number of financial institutions, including Barclays, Chase, HSBC, and Wells Fargo, as well as other worldwide payment providers, such as Visa.

Flywire Corp is a cross-border payment solutions business established in the United States. Payments are processed on behalf of students from over 200 countries and territories in over 70 different currencies. Over 900 colleges, universities, and other educational institutions are served by the company. The Company’s platform accepts bank transfers, internet banking, credit and debit cards, as well as currency conversions at current exchange rates. The company provides multilingual customer service via phone, email, and chat, as well as online payment tracking 24 hours a day, 7 days a week.

Azimo B.V. is a Dutch online money transfer company based in Amsterdam. It also has a presence across Asia-Pacific and other Regions. WorldRemit and Remitly, two fintech businesses, are its main competitors. Azimo allows you to send money to 190 different countries in over 80 different currencies. The company has 500,000 consumers on its platform and more than 270,000 cash pick-up locations throughout the world.

WorldRemit Ltd. is a cross-border digital payments firm that offers money transfer and Remittance Service in over 130 countries and 70 currencies. WorldRemit specialises in mobile-to-mobile money transfers that are completely cashless on the receiving end. It provides choices for people receiving money, such as bank deposit, mobile money, mobile airtime top-up, and cash collection. There are around 5,000 corridors in the company’s network. It’s linked to mobile money providers all across the world, including M-Pesa in Kenya, MTN in Africa and Asia, and bKash in the United Kingdom (Bangladesh). Sendwave, another cross-border digital payments startup, was bought by WorldRemit in 2021.

Wise PLC is a multinational technology business established in the United Kingdom. Local payment systems, regulatory and compliance coverage, payments technology via application programming interface (API), and customer support and operations are all part of the company’s infrastructure development. Wise Transfer, Wise Account, Wise Business, and Wise Platform are the company’s payment infrastructure solutions. Customers of Wise Transfer can send money internationally. The Wise Account allows you to bank in multiple currencies. Wise Business offers a business account with Wise account features suited to small and medium business needs, such as bank feeds, mass payouts, and multi-user access.

MoneyGram International, Inc. is a company that specialises in cross-border peer-to-peer (P2P) payments and money transfers. Global Funds Transfer and Financial Paper Products are the company’s two segments. The Global Funds Transfer segment primarily provides international money transfer and bill payment services as a substitute for banking services. Third-party agents, such as retail chains, small stores, post offices, banks, and other financial organisations, provide services. Moneygram.com, mobile app solutions, account deposit, and kiosk-based services are among the digital services it offers.

Strategic Conclusion

Digital remittances are the way of the future. Payment methods will shift from real cash to digital payment methods in the next years. Many new trends will emerge and go before the transformation is complete. These changes will have a big impact on how we pay in the future. Some of the emerging trends in the Asia-Pacific Cross-border and Remittance Service Market include Contactless payments, AI and Machine Learning, Smart speaker payments and Biometric authentication. Many of the above identified tendencies will play a significant part in this process. However, only time will tell how everything will turn out.

References

Appendix

PS Act – Payments Service Act
MTOs – Money Transfer Operators
AI – Artificial Intelligence
ML – Machine Learning
P2P – Person-to-Person
P2B – Person-to-Business
P2G – Person-to-Government
PaaS – Payment-as-a-Service
DLT – Distributed Ledger Technology
NFC – Near-Field Communication
KYC – Know-Your-Customer
RSP – Remittance Service Provider