The new research - Digital International Money Transfer: Key Trends, Player Innovation & Market Forecasts 2019-2024 - from Juniper Research found that both online and mobile channels are achieving strong growth, with fintech disruptors and market incumbents rapidly gaining traffic.
But, according to the research, much of this growth will be at the expense of unofficial remittances, such as funds sent with travelling family members, rather than established formal remittance channels.
Juniper Research says it recommends that money transfer operators invest heavily in digital transformation, whilst retaining strong agent networks, to ensure they gain the full benefit of digital migration.
According to Juniper Research, mobile transfer will continue to dominate, requiring vendor innovation, and the research firm found that the mobile channel will account for 68% of transaction volume in 2024 - up from 63% in 2019.
The study found that this dominance is primarily due to the superior app-based experiences available on mobile, rising interoperability of mobile money solutions and highly competitive pricing from app-based disruptors.
“Mobile has become the go-to channel for international money transfer; dominating the digital landscape,” said research author Nick Maynard.
“This means that incumbents in the area, such as Western Union and MoneyGram, must relentlessly focus on their app experiences, fully embracing digital transformation. A failure to do so will result in a steady erosion of market share by digitally-native disruptors,” Maynard cautioned.
The new research also found that international digital money transfer, while highly compelling via a digital channel, requires effective agent partnerships in recipient countries to ensure success, with agent networks crucial to success in emerging markets.
“Over time, both ends of the money transfer transaction will be digital, boosted by mobile money interoperability but, for now, retaining a physical cash out location will be crucial.
“Juniper Research recommends that money transfer operators make partnerships in emerging markets a high priority, including with physical players such as supermarkets or retailers,” Juniper Research said.