- APAC digital transfer and remittance market expected to grow by 24.2% from 2018 until 2025
- But what’s astounding is the expensive services charging as high as 10.34%
In its latest insight report, Ripple shares the growing demand the Asia-Pacific (APAC) region is seeing.
“More remitters than ever are sending money home to their loved ones,” the San Francisco-based company points out adding APAC saw a growth of 12% in remittance flows in 2018, as per World Bank. About 2bln in remittance transactions flow in the area every year.
APAC region to see a growth of over 24%
Remittance flows in the Philippines, makes them the 3rd largest remittance-receiving nation worldwide, and another staggering number that is reaching record highs of $529 billion last year is Thailand, and is also anticipated to see exponential growth as the Philippines greatest help for external financing.
On the opposite side, Australia and Thailand entice a remarkable amount of migrant workers. Australia’s payment outflows are $7.2 billion to China, India, Vietnam, the UK, and the Philippines. Also becoming a major destination for foreign workers is Thailand, with $7.5 billion set against ejaculations of $4.9 billion estimated payment inflows.
From 2018 until 2025, APAC digital transfer and remittance market is actually expected to experience a Compound Annual Growth Rate (CAGR) of 24.2%.
But traditional payment channels charging fees as high as 10%
The rise of worldwide remittances is “significant” but even more astounding are the expensive services. Ripple notes,
“The Asia-Pacific (APAC) region is seeing significant growth in remittances, yet the high cost of cross border payments leaves remitters with few options.”
Here blockchain technologies have a huge part to play as they can offer a fast, smooth encounter for global payments with reliability, and transparency, that people are accustomed to and require from services like email.
The global median cost of transferring $200 was 6.84% in 3Q19, with banks charging an average fee as high as 10.34%.
There is also a high price variance by corridors, from Thailand to Vietnam, Lo PDR, and China has remittance fees exceeding 10% in 2018.
Blockchain provides a solution
Financial businesses desire a cheaper, simpler, and more effective way of processing cross-border transactions and blockchain has created a resolution.
With APAC market “ripe for digitization,” Ripple is already working and seeing much activity in the Philippines and Thai market.
Recently, the company along with Thailand’s oldest bank Siam Commercial Bank announced that they were working on enabling cross-border payments via QR codes.
Through its partner FlashFX, Ripple has opened payment channels in Mexico, the US, and the Philippines with Australia next on the list. Apart from SendFriend, MoneyGram is also using XRP to conduct transactions in Europe, Australia, and the Philippines as well to tap this growing demand in APAC region.