South Africa international remittance market to grow by over $34 billion by 2023, research
South Africa is expected to experience increased internal migration with the rising economic opportunities in the urban areas.
The rural population is looking for prospects in the urban areas thus mounting the remittance market forward. The country continues to remain as being one of the costliest spaces to remit money from across the world.
However, in the coming 5 years it is expected to see a decline in costs owing to the increasing rivalry and intense competition from the ADLAs. Ken Research in its latest study "South Africa Domestic and International Remittance Market Outlook to 2023 - By Channels Used (Banking Channels, Retailers, ADLAs & MTOs and Others), Remittance Corridors (Inbound-Outbound and Rural-Urban)" suggest that Western Union, MoneyGram, Hello Paisa, Mama Money and Mukuru together captured majority market share of the overall South Africa International Remittance market in 2018. The market is projected to witness a CAGR of close to 6per cent in terms of total value of transactions during 2018-2023.
The government and banks in the country are increasingly focusing on financial inclusion moreover; radical technological innovations are expected to accelerate the same.
Use of Bitcoin is expected to boom mainly as an easier and cheaper means for disposal to send money back to their families.
The South African market is expected to adopt digitalization at a rapid pace over the next 5 years.
The smart phone users in South Africa would increase to 27.3 million users by 2022. This increase in penetration of technologically advanced mobile phones is expected to showcase the adoption of mobile wallets, e-wallets and other electronic modes of remittance services like WeChat across South Africa.
South African government has been liberalizing their policies and regulatory frameworks for remittance service providers. The documentation, fee structure and business conducting guidelines are likely to be improvised by the regulators leading to a higher remittance business.
The flexibility expected to be adopted by the government is serving as an incentive for both the service providers as well as the customers availing remittance services. The growth rate for mobile/digital channel is expected to be very high in the coming years since ADLAs are expected to be market leaders with their low pricing strategy focusing on making the services available to all the segments of the population.
The market is also likely to expand in terms of the digital channels like mobile wallets and bitcoins which can be used readily for international transfers and deliver services within few hours.
People from SADC countries will continue to migrate to South Africa as a result of increasing income opportunities.
As a result of increase in migration, the remittance sector is expected to showcase growth with rise in the value and volume of remittance across all major corridors. The government support policies are likely to increase and thereby augment the value of transactions remitted by the immigrants.
