The market for cross-border person-to-person (P2P) remittances is massive. It experienced double-digit growth in 2018 as consumers migrated from one country to another in search of better economic opportunities, as well as to escape political and financial upheaval in their home countries.
In many cases, the migration pattern may involve only one member of a family leaving their country for a job on an oil rig in Kuwait, a construction job in the U.S. or as a live-in daycare provider in Singapore while the remaining members stay home. In cases such as these, as well as those who have permanently emigrated yet still want to support an extended family in their home country, remittances play a vital role in the transfer of wealth and represent an economic boon to the receiving country.
The annual volume of remittances grew to almost $689 billion, in 2018 according to a report from the World Bank. For a reference on the scale of this market, as a total value it is larger than the entire GDP produced by the Kingdom of Saudi Arabia ($683.8 billion). Given the large size of the market and the lucrative nature of these payments which tend to be small value (oftentimes $100 to $300) and frequent (typically a weekly or bi-weekly payday) it has attracted the attention of newcomers such as TransferWise, Remitly, and WorldRemit. It has also attracted the attention of larger organizations such as PayPal, which acquired Xoom; as well as Western Union and MoneyGram making further technology investments to maintain their leadership positions.
This opportunity has also led to unique relationships such as payments player Brightwell partnering with the cross-border payout platform, Transpay, to serve a unique market niche of serving cruise line staff that send funds home from a different country every payday.