A significant surge in demand for cross-border transfers is expected within the Middle East, with a distinct focus on sophisticated and productised remittances, a new market research said.
The growth in demand for reliable and affordable money transfer services in the region will be driven by the increasing number of expatriates, particularly from India, Pakistan, Bangladesh, Egypt, Nepal, Sri Lanka, and the Philippines, who send money back to their home countries, according to a study titled “The Evolution of Cross-Border Transfers” conducted by Prepay Nation, a global B2B marketplace for prepaid products, said.
This trend is expected to continue in the coming years, it said.
The UAE and Saudi Arabia, each hosting over 22 million expatriate workers – 9 million in the UAE and 13.5 million in Saudi Arabia – serve as the primary sources of remittance to home countries in Asia and the Middle East.
Rising demand for purposeful cross-border transfers
The report suggested that cross-border transfers go beyond cash transfers and there has been an increased demand for purpose-driven remittances from expats, especially unbanked customers, who want to have greater control over their finances.
“This has led to a more diverse variety of prepaid digital vouchers, including products such as airtime top-ups, data, bundles, gift cards, and utility bills,” the study said.
Airtime top-ups have become particularly popular in the Middle East, where mobile phone usage is high, and people often rely on airtime to stay connected to their family and friends back home, it said.
Paolo Montessori, CEO of Prepay Nation said the global shift from cash to digital payments has catalysed the momentum of the digital revolution, and the Middle East is no exception.
“With this ongoing shift, consumers are exploring innovative solutions, such as productised remittances,” he said.
These solutions provide a comprehensive one-stop approach, enabling individuals to stay connected with their loved ones, while gaining enhanced control and value over their financial transactions, Montessori added.
The study, citing recent data, said the global digital cross-border transfers market was valued at $148.08 billion at the start of 2023 and is expected to grow at a CAGR of 12.58 percent to reach $339.87 billion by 2030.
Increased mobile phone usage, online shopping, and the need for convenient, fast, and secure money transfer services are the primary drivers of this trend.
The UAE and Saudi Arabia are two of the largest remittance hubs in the Middle East region that sent an estimated $39.6 billion and $39.3 billion, respectively in 2022, amounting to about 7 percent of the GDP of the two countries, the study said.
Prepay Nation said it is strategically expanding its offerings to meet evolving customer needs.
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