There is a growing trend of working overseas and living in other countries. According to a World Bank report, the number of people living outside their country of origin has risen to 222 million in 2012. Working overseas or living in other countries as an expatriate is a popular option for many people who want to live and work in another country. Expats often choose to live outside their home country because of the better job opportunities, higher standard of living, or better education and health care. The growth in international working and Expat living have led to an increase in the remittance industry.
The sector is made up of banks, money changers, remittance companies and other financial service providers engaged in the processing and exchange of funds from one country to another.
This sector is expected to grow at a CAGR of 13.9% over the next five years. It is projected to reach a value of $365 billion by 2025.
Positive impact of remittance on recipient country
The positive impact of remittance can be seen in the development of the recipient country. In some developing countries, remittance has become the primary source of income. Several studies have shown that remittance has played a significant role in boosting the economic growth in some areas of the world. An example of this is the growth of Africa’s economy. Most African countries receive a large portion of their income from remittance. The African Development Bank has projected that the amount transferred through remittance will increase to more than $400 billion by 2021. In addition to the growth of the African economy, the positive impact of remittance can be seen in other developing countries, such as Indonesia and Philippines. In these countries, remittance is the primary source of income and it also serves as a source of foreign exchange.
Remittance’s impact on the sender country
Many people in developed countries work abroad, which leads to an increase in the number of expatriates. This increase in the number of expatriates impacts the foreign exchange market, which in turn leads to a decrease in the value of the local currency. When the currency of a country loses its value due to the increase in the number of expatriates, one of the options that the government has is to implement a transfer system. This system is used to help the expatriates transfer the money to their home country and help their country’s economy. The negative impact of remittance is not limited to the countries of origin, it can also affect the sender country. A study was conducted to analyze the impact of remittance on the foreign exchange market. The research found that the flow of remittance to a particular country represents a contraction of the foreign exchange market. In other words, when a country receives a large amount of remittance, it can lead to a decline in the value of the local currency.
Traditional Remittance Methods
- Cash transfer: In this method, a person transfers a specific amount of money. The cash can be in foreign currency or a local cash. If the cash is in another country’s currency, the exchange rate will be applied.
- Check transfer: In this method, an individual writes a check or an ACH (automated clearing house) transaction to transfer funds. The check or ACH transaction is authorized and processed by a bank.
- Wire transfer: In this method, funds are transferred electronically through a bank wire. The transfer can be initiated by the sender or received by the recipient.
Blockchain and cryptocurrency
The blockchain technology can be used to create a global network for the processing of remittance. This network can reduce the cost of the remittance and increase the transparency of the transfer. For example, a blockchain network can be used to track the origin of the money and the destination of the money. This information can be used to track down the money and the recipient of the money. With the help of the blockchain technology, the remittance sector is expected to have a huge impact on the future of the remittance industry.
Future trends in remittance
There are many benefits of the growth in remittance. One trend that can be expected in the remittance industry is the growth of cashless payments. In many developed countries, cash payments are declining. The growth in the remittance sector is expected to be one of the drivers of the development of the cashless payment industry. Along with the growth of remittance, the number of expatriates is also expected to increase. The growth of the expatriate population will lead to an increase in the remittance. In addition to the growth of the expatriate population, the number of expats who work outside their country of origin is also expected to increase. The growth of the working expats is one of the trends that can be expected in the remittance industry.
The growth in the remittance sector will have a significant impact on the future of the remittance industry. The growth in the amount of remittance will lead to an increase in the use of traditional methods, the use of the blockchain technology and the growth of cashless payments. The development of the blockchain technology and the growth in remittance will have a huge impact on the future of the remittance industry.