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Shahebaz Khan, Head of Commercial and Money Movement Solutions, Visa CEMEA

June 2023


5 - 6 Minutes

Unlocking the Economic Empowerment of Digital Remittances

Remittances are crucial for the global economy and the prosperity of developing communities. This is especially true in the GCC, which is home to millions of expatriate workers responsible for supporting families in their home countries. The UAE and Saudi Arabia account for two of the top three countries around the world for originating remittance payments.

Meanwhile, globally, an estimated 800m people receive money from loved ones to pay for things like food, education, or even unforeseen medical costs1. According to the World Bank and KNOMAD, 29 countries received over 10% of their GDP in remittances in 2022, while seven received over 25% of their GDP this way2. In the UAE alone digital remittances account for a ~$35bn per year market3.

Remittances require a nonstop network that can quickly and securely move money, ensuring that the recipients have funds in hand to make everyday purchases and pay for their basic needs. Visa’s recent “Money Travels: 2023 Digital Remittances Adoption” study identifies the progress – and barriers that remain – in how money travels abroad.

Among the countries surveyed were Saudi Arabia and the UAE where digital is becoming the most popular way to move money internationally, benefitting from a safer, faster and more private experience. For instance, 70% of consumers surveyed in the UAE and Saudi Arabia use digital apps to send and receive funds internationally, compared to 53% globally. Meanwhile only 3% in the UAE and 4% in Saudi Arabia don’t expect to adopt digital remittances methods in the future.

On the occasion of the International Day of Family Remittances, it is important to recognize the emergence of digitalization as a proven innovative solution to remittance challenges, offering new business models and global network capabilities that can bring speed, transparency and cost savings for people who depend on them. In the GCC alone, the rise of digital remittances demonstrates the power of choice — digitally enabled migrant workers can more easily compare providers and costs to choose the best options for their families4. With collaboration from the private and public sectors and investment in innovative technologies Visa is confident that we can continue to advance digital enablement across borders.

Visa Role in Supporting Development of Cross-Border Payments

Visa is committed to building the cross-border payment infrastructure of tomorrow. We believe that this involves not only improving the speed and efficiency of cross-border transactions but also ensuring that they are safe, secure, and accessible to all.
To achieve this, we are working closely with governments, central banks, and other stakeholders to create an enabling regulatory environment for digital payments. We are also investing in innovative technologies and partnerships that can help to drive the adoption of digital payments across borders.

At the core of our offering is Visa Direct, a real-time payments platform that enables fast, secure, and convenient cross-border payments. It offers a reliable and cost-effective solution for businesses looking to expand their cross-border payment capabilities, allowing them to send money to Visa debit and prepaid cardholders in over 200 countries and territories.

We believe that building the cross-border payment infrastructure of tomorrow is a way to support economic growth and financial inclusion around the world.

The Digital Path to Economic Empowerment

Digital enablement is more than holding a digital wallet or account – it’s an ecosystem that allows people to receive and spend their money through digital channels. The notion of digital spending sets the new era apart from traditional means of remittances, where the process ends once cash is withdrawn. Our “Money Travels” report found that digital transferring was chiefly chosen by consumers in the GCC for the ease and safety of the process as indicated by the majority of recipients surveyed across both the UAE and Saudi Arabia.

This being said, challenges do persist, chiefly relating to barriers of cost and difficulties in understanding the process of exchange rates. While digital remittances cost less than traditional ones, their fees can still be high and calculating exchange rates can be difficult for migrant workers. For example, those surveyed who have sent funds within Saudi Arabia reported high fees (38%) while in the UAE, they noted difficulties in calculating the exchange rate (28%)5. More broadly, underbanked families worldwide still rely on cash because businesses in their communities have limited digital payments infrastructure.

The remittances industry has ample capabilities to push innovation and digital transformation. However, to meet the diverse needs of consumers, we must collaborate to provide more choices and options that align with their preferences and circumstances.

Ultimately, we believe that building the cross-border payment infrastructure of tomorrow is not just a business opportunity but also a way to support economic growth and financial inclusion within and beyond the GCC. As we strive to enable more digital adoption globally, enormous strides have made in the digital remittances space but families across the GCC continue to encounter challenges. By developing and refining our comprehensive digital ecosystem, we are confident we can overcome these roadblocks and extend the reach of digital remittances to millions worldwide who rely on them.

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

1 United Nations News, Remittances matter: 8 facts you don’t know about the money migrants send back home, June 15, 2019
2 Countries include: Honduras, Kyrgyz Republic, Lebanon, Samoa, Tajikistan, The Gambia, and Tonga
Migration and Development Brief 37: Remittances Brave Global Headwinds. Special Focus: Climate Migration
Visa Global Market Sizing report: P2P sizing for GCC countries provided by EY for 2022
Visa Economic Empowerment Institute, The economic empowerment of digital remittances: How to unlock the benefits of innovation and competition. Harper, C., & Rakkappan, R. (2022, October).
  United Nations News, Remittances matter: 8 facts you don’t know about the money migrants send back home, June 15, 2019
Money Travels: 2023 Digital Remittances Adoption, March 2023; conducted by Visa and Morning Consult during December 14-28, 2022 among a sample of remittance senders and receivers across the U.S., Canada, Mexico, Peru, France, Poland, Philippines, Singapore, United Arab Emirates, and Saudi Arabia.

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