Covid accelerates remittances transformation

Since March, when lockdowns commenced and many physical stores were closed, companies offering digital remittances have reported significant growth. Robin Arnfield reviews underlying factors that will ensure the trend is permanent. 

The Covid pandemic is transforming the remittance industry, with many digital players reporting triple-digital transaction growth increases. The convenience, speed and low cost of digital remittances means that, once consumers have migrated to digital, they are unlikely to revert to cash. Going forward, digital as a channel of initiation and pay-out will continue to grow at greater rates than cash remittances.

Digital as a channel of initiation and pay-out is set to grow at greater rates than cash remittances. That is the one of the safer forecasts when one looks at how Covid is impacting the payments sector.

Research from PayPal and Xoom shows that the average cost of sending a digital remittance is just 3.93%, nearly half the cost of traditional remittances.

The strength of the digital remittance industry is indicated by recent venture capital investments. In July 2020, TransferWise announced $319m in secondary funding, pushing its valuation to $5bn from $4.5bn last year. Also, in July US-based Remitly received $85m in funding to expand its digital financial services products, valuing it at $1.5bn. In February 2020, UK-based Azimo signed a €20m debt financing agreement with the European Investment Bank.

Cash remittances remain important on the sending and receiving side, especially in countries where money transfer agents are located in businesses seen as essential services such as grocery stores. The low levels of bancarisation in emerging markets and among migrants are a key factor.


MoneyGram, a business originally built on retail locations, saw digital growth take off in Q2 2020. It reported 106% year-on-year digital transaction growth in Q2 compared to year-on-year digital growth of 57% in Q1 2020. Digital transactions accounted for 27% of all MoneyGram money transfer transactions in Q2 2020, up from 18% in Q1 2020.

The growth was driven by sending from the US, Canada and Europe to destinations in Pakistan, Bangladesh Latin America and the Caribbean.

MoneyGram’s digital business comprises MoneyGram Online, its direct-to-consumer channel ( and MoneyGram mobile app); its digital partnerships; and deposits to bank accounts and wallets.

MoneyGram is leveraging partnerships with other firms to acquire customers and raise awareness of its digital capabilities.

MoneyGram’s marketing campaigns have resulted in a significant increase in new customers. For example, there is a 220% year-on-year increase in the number of users of the app in June.

Account deposit and wallet transactions increased 148% year-on-year compared to growth of 80% in Q1 2020.


Viamericas uses walk-in locations for sending remittances. It principally focuses on Latin America, but its Philippines and Indian remittance transactions have been growing very quickly and become major corridors.

The termination of Viamericas remittances depends on the receiving market. Specifically, it depends on the level of banking penetration in each country and consumer habits.

In late March and early April, Covid affected the number of people walking into Viamericas agent locations but by the end of Q2 it reports year-on-year growth in the second quarter.


UK-based Azimo offers worldwide digital remittances from 25 countries in Europe plus Hong Kong.

“In April and May, we saw 50% more new customers starting with us than we usually would, mostly because remittance agents were closed,” says Azimo’s CEO Richard Ambrose. “As the lockdown started to lift, this growth in new customers was less prevalent in June.”

Azimo is cashless for pay-ins, Ambrose says, with the overall majority of remittances funded via cards, principally debit cards, though a significant minority are funded by bank transfers. In Europe, Azimo supports online bank payment schemes Sofort and Ideal and will soon add Google Pay and Apple Pay due to demand from customers.

For Azimo, transfers to wallets such as M-Pesa are significant in countries such as Kenya and Ghana with high wallet penetration, though overall they represent a small proportion of transfers, says Ambrose. “Two thirds of our volume is paid to bank accounts and most of the remainder is cash pick-up,” Ambrose says.


Singapore-based InstaReM operates a digital platform in 90 markets, branded as Nium. The platform has multiple connections, allowing consumers to send remittances via bank credits, ACH transfers and wire payments, and receive pay out to bank accounts, cards and cash.

InstaReM partnered with Visa Direct to allow consumers to conduct payouts via cards, and has worked with China’s Geoswift to enable remittances to UnionPay cards and affiliated Chinese banks.

InstaReM saw 60% growth between March and June 2020, and continues to see double-digit growth, especially in markets where governments have been urging the population to go digital.

InstaReM has launched its Remittance-as-a-Service platform to enable banks, enterprises and fintechs to offer digital remittances and other payment services such as Visa corporate cards on their own platforms. Businesses can send salaries and other payments in real-time to these cards.


UK-based Paysend offers digital account-to-account remittances, enabling users to send money using a recipient’s name and card number. They are also able to transfer funds to bank accounts and digital wallets.

From February to June 2020, Paysend transaction numbers rose by over 70% and active users by 65%.

As of July, Paysend’s Global Transfer Service had 2 million users, up from 1.5 million in March 2020.

Paysend’s B2B arm Paysend Business saw business registrations during the pandemic rise to 15,000 in June 2020, in which month it processed over 1.6m transactions. Paysend Business offers merchant acquiring, payroll services and international payments.


Between February 2020 and March 2020, Remitly saw 100% growth in new customers and 40% transaction growth.

Remitly offers ‘express’ transfers from debit and credit cards and ‘economy’ transfers from bank accounts. It can send funds to 200,000 cash pick-up locations and to bank accounts and wallets, plus door-to-door delivery. It has partnerships with Alipay, Green Dot, and Cross River, which offers international debit card network access.

From February 2020 to March 2020, Remitly saw 40% transaction growth month-on-month. One area that is growing particularly fast in Asia, Africa and Latin America is wallets.”

Remitly has seen very high demand for Passbook, its low-cost bank account for US migrants which includes cross-border transfers and is offered through Sunrise Bank.


UK-based TransferGo supports bank transfers, cards and Apple Pay for pay-ins from 33 countries and has 2.2m customers. 

Bank account transfers are the largest by volume, but TransferGo is increasingly seeing a demand for transfers to cards, Knight says. TransferGo is currently exploring opportunities to partner with Visa Direct and Mastercard Send.

TransferGo is seeing significant growth in Poland, Romania, Ukraine, Lithuania and Turkey. In January 2020, TransferGo partnered with cross-border payment platform CurrencyCloud to launch in 14 new markets, taking its total to 69 countries. 

Between January 2020 and July 2020, it enjoyed 100% year-on-year growth, and it's all digital.

In addition, to address cross-border payments to contractors and freelancers, TransferGo is investing in a product team for gig economy workers. 


TransferWise has 8m customers worldwide, and processes £4bn in cross-border payments every month. Its business service is one of the fastest-growing elements in its portfolio, with 10,000 new business clients being added each month. 

In June 2020, TransferWise launched a service allowing instant domestic and cross-border transfers to TransferWise users’ cellphone contacts who also have a TransferWise multi-currency account.

TransferWise has partnerships with small business services such as Xero and GoCardless, and offers money transfers to China through a partnership with Alipay. 
TransferWise’s borderless account, which is designed for expats, freelancers, and travellers, holds £2bn in current deposits, and 1m debit cards have been issued by the firm since 2018.