Mobile apps now surpass legacy methods for consumers who routinely send or receive cross-border payments in 10 key global remittance zones, according to a
Fifty-three percent of remittance users are using a digital app to send or receive funds across borders, Visa said. But about 10% of consumers are still manually carrying cash to recipients in other countries, underscoring opportunities to convert them by improving access and costs, according to the San Francisco-based card network.
Visa surveyed 14,000 consumers in the U.S., Canada, Mexico, Peru, France, Poland, Singapore, the Philippines, Saudi Arabia and the United Arab Emirates online during the last two weeks of December 2022 with assistance from Morning Consult.
Visa lacks data to directly compare digital app use with legacy methods for transferring funds across borders in those countries from recent years. But remittance traffic via mobile devices surged after the pandemic along with digital payments, said Ruben Salazar, global head of Visa Direct, in an interview.
"Recent gains in the migration of cross-border payments to digital methods is a significant win because it's more secure and less costly for all parties, but there's still plenty of room for improvement," Salazar said.
In the 10 countries Visa's survey covered, around 30% of consumers typically visit a physical bank or branch to initiate a cross-border payment, while about 10% of senders rely on cash, checks or money orders for remittances and about one in 10 consumers moves cash across borders by entrusting it to another person — typically a friend or family member — when traveling to their home country, according to Visa's survey.
Saudi Arabia, the UAE and countries in North America have the highest rates of digital-app adoption for cross-border payments, ranging between 60% and 70% in each market, Visa said.
Countries with the highest proportion of consumers routinely sending remittances across borders via any method include the UAE at 71%, Saudi Arabia at 64% and the Philippines at 48%, according to the survey.
On the receiving end, countries where the highest proportion of respondents reported routinely receiving remittances (through any channel) were Saudi Arabia at 80%, followed by the Philippines at 77% and Mexico at 70%.
Nearly 40% of UAE consumers surveyed who routinely send remittances through any channel cited high cross-border payment fees as a common pain point, and 37% of survey respondents in Singapore complained about difficulties in calculating exchange rates when sending remittances via any channel.
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Consumers still using legacy remittance methods represent a significant growth opportunity for U.S. banks that support digital cross-border payments, according to Salazar. In addition to those who hand-carry cash across borders to recipients, 10% to 15% of U.S. consumers continue to rely on cash, checks and money orders to transfer funds.
"Many older people are still using manual methods to transfer funds across borders, and U.S. banks could go further to attract more digital remittances by improving the user experience for sending cross-border payments within their mobile apps," Salazar said.
