Pandemic Fuels Digital Remittance Growth, Here to Stay

The COVID-19 pandemic has impacted almost every aspect of the economy. Many businesses have had to change their models and adapt themselves to the new reality. This is true even for the money transfer industry.

Although digital remittances had started to gain popularity even before the pandemic, the prolonged restrictions and other measures to curb the diseases have fueled digital remittance growth in a way that no one anticipated.

According to experts from the World Health Organization (WHO) and other scientists, one of the ways through which the infectious disease could spread was by touching surfaces and objects like money. As a control measure, many governments around the world started a campaign to discourage the handling of hard cash.

This was a blessing in disguise for money transfer services as people were encouraged to use contactless payments to reduce the chances of being infected by the physical handling of money.

How has the pandemic fueled digital remittances?

There are many ways through which the COVID-19 pandemic has led to the growth of digital remittances across the world. Here are some of the ways:

1. Need to minimize handling of physical cash

As mentioned earlier, one of the measures that governments across the world took to reduce the spread of COVID-19 was to prevent people from using physical currencies. This is because there was substantial evidence that some people got infections as a result of holding money that contained the virus.

As a result, digital money transfer services took advantage of the situation to scale up their operations and meet the growing demand. Although several vaccines have already been found, it is not certain when or if things will ever get back to normal for that matter.

2. Increase in the number of people who need help

The coronavirus pandemic rendered many people jobless across the world. This meant that those who had jobs had no option but to support their family members and friends. Consequently, the demand for digital money transfer services rapidly increased as people moved money from one location to another.

The good news is that there are many transfer companies like Western Union that have existed for many years. According to the company’s Chief Finance Officer Mr. Raj Agrawal, the pandemic has seen their money transfer services increase significantly.

3. Need for faster transactions

This is probably another major reason why digital remittance growth has been experienced during the pandemic. Considering the fact that many people have shifted to online money transfers for most of their transactions, speed has become more essential.

Today’s customers like it when things happen instantly. For example, when they are shopping for products online, they want a system where they can make payments fast and without delays. This is where online mobile apps come in.

Why digital remittance is here to stay

Even before the world’s economy was disrupted, digital money transfer companies have already established themselves. What the pandemic did was just to trigger something that was already in existence.

The world is increasingly becoming digitized and almost everything is moving online. This means that more and more people will continue to move from using traditional money transfer means to modern methods.

Additionally, more companies are being formed every year to meet the increasing demand for online money transfer services. One of the reasons why many people are embracing digital remittance is convenience and efficiency.

Unlike traditional money transfers, digital transfer methods allow customers to transfer large amounts of money almost instantly. The recipient doesn’t have to wait for weeks or days before the money hits their bank account.

Bottom line

There’s no doubt that the COVID-19 pandemic has played a key role in fueling digital remittance growth. The number of people using digital money transfer services has significantly risen than ever before.

But whether the pandemic will come to an end or not, digital remittance is here to stay. Companies like Western Union have proved that online money transfers have been and will continue to be a reality.