04 Aug 2023
A report by Pilot Guides said that about 9 million Pakistani migrants live abroad, most of whom work to earn a living and send money to Pakistan to provide financial aid to their families back home. These Pakistani migrants, a report by Dawn said, had sent in around $31 billion in inward remittances to the country in FY22. The same report, while taking stock of the global economic trends, said that the inbound remittances to Pakistan would remain close to about $30 billion in FY23, slightly lower than in the preceding year, 2022.
Since technology has revamped the financial behaviour of humans, the one thing that remains constant in technology is its unceasing evolutionary nature that exposes users to new dimensions in technology.
But with it comes several risks to which opportunities run parallel. In the field of online money transfers worldwide, keeping a sharp eye on these risks and opportunities is important because you, as an expatriate, work hard to earn a living. And if you are not too careful about your money, you run the risk of getting duped at the hands of scammers while transferring funds online.
Remember that these risks and opportunities birth trends in a particular field. This means that a change, regardless of big or small, is on its way, which can either be a risk or an opportunity.
If you look for such trends resulting from these evolution-based risks and opportunities, you are at the right place and time. Because this blog will walk you through some of the most important trends in the digital money transfer industry.
To understand the future trends in the field of digital cross-border payments in your money transfer to Pakistan, a quick look at the evolution of online money transfers is essential.
Here are a few firsts in the field of digital payments.
Western Union (WU) initiated the first Customer-to-Customer (C2C) money transfer as far back as 1871 while keeping the convenience and facility of people.
It was a catalyst in the financial world of that era and paved the way for even easier and more long-distance financial transactions.
Jane Snowbell, aged 72, did the first online shopping from home in 1984. She had ordered cornflakes, margarine, and eggs.
She placed her order at a local supermarket through her phone line, using a remote control and Videotex on her TV.
The payment was, however, made in cash as Tim Berners-Lee had yet to invent the World Wide Web (WWW)!
The first online order was for a Pizza after Pizza Hut launched Pizzanet.net.
In 2008, PizzaNet’s online sales of Pizza Hut had reached $1 billion and had crossed $6 billion by 2013.
Barely a year after the first online order for a Pizza, Jeff Bezos launched Amazon as the first online bookstore in July 1995 after he saw that internet usage was growing at 2,300% annually.
In 1998, music and videos were added to the online Amazon bookstore.
Now let’s take a quick look at the economy of Pakistan to see why they go abroad to earn a living.
It is due to the flailing economy of the country that the people find work abroad and earn a living and send money to Pakistan online to offer financial support to their families.
It makes it all the more important for them to be careful about their online money transfers.
Here’s how you can ensure your safety in digital money transfers.
Now let’s take a look at some of the trends in online money transfers to look for in 2023.
Online payment services are changing in a matter of weeks and months due to customers’ demand for increased freedom and flexibility.
Below are the important emerging trends you need to know that will shape digital payments.
Societies worldwide are increasingly pushing for cashless payments based on mobile devices and technology improvements.
In this context, a Juniper Research study revealed that the volume of contactless transactions is expected to grow to $10 trillion by 2027 from $4.6 trillion in 2022.
People are now moving away from traditional payment methods, and businesses – small and big alike – are altering their financial processes accordingly.
It is pushing non-conventional financial methods into the mainstream faster than expected. One of the most important emerging trends is that optional financial methods are becoming mainstream.
As technology is advancing, so are the tricks of scammers. With an uptick in online scams, both online money transfer service providers and customers are emphasising the safety of data and funds more than anything else.
In the future, you can expect that the core focus in online money transfers will be security rather than speed, fees, exchange rates, etc.
More and more regulation is put in place to overcome the volatility in the crypto market. Currently, people are wary about investing and doing business in Cryptocurrency.
But policies are underway to roll out solutions for wider Cryptocurrency usage and make it and blockchain technology more user-friendly.
These are some of the major emerging trends to watch out for in the global remittance market.
Although several service providers are shifting focus from many important service features to safety only, a few companies, including ACE Money Transfer, will still offer you the best deals with low fees, competitive currency exchange rates, security and much more, should you choose it for your online money transfer to Pakistan.
FAQs
What are the key trends to watch out for in the future of digital money transfers to Pakistan in 2023?
The future of digital money transfers to Pakistan is expected to evolve rapidly in 2023, with key trends including:
How is the growing adoption of mobile wallets changing the landscape of digital money transfers in Pakistan?
The growth in mobile wallet usage is democratising access to financial services in Pakistan. Now, even those without a traditional bank account can receive funds digitally, making remittances easier and more convenient. Moreover, mobile wallets enable instant transfers, providing recipients with immediate access to their funds. This also reduces the costs associated with physical delivery or traditional bank transfer methods.
What role does blockchain technology play in the future of digital money transfers to Pakistan?
Blockchain technology has the potential to revolutionise digital money transfers to Pakistan by making them faster, more secure, and less expensive. This technology eliminates the need for a middleman, enabling direct peer-to-peer transfers. Its inherent encryption ensures the security and privacy of transactions. Furthermore, with the potential integration of cryptocurrencies, this could open new avenues for money transfers in the future.
What are the implications of increased government regulation on digital money transfers?
Increased government regulation may have both positive and negative impacts on digital money transfers. On the one hand, it could mean improved security and fraud prevention measures, fostering consumer trust in digital platforms. On the other hand, too much regulation could potentially hinder innovation and growth in the sector. Ideally, a balance should be struck to allow for both consumer protection and industry development.
How is increased competition expected to impact fees associated with digital money transfers to Pakistan?
With more players entering the market, competition is expected to drive down the fees associated with digital money transfers. As companies strive to attract more customers, they will likely lower their fees or offer additional services to make their platforms more attractive. This can result in cost savings for customers, making digital money transfers a more affordable option for remittances to Pakistan.
Resources
(The Pakistani Diaspora – PILOT GUIDES)
(Why are remittances falling? - Business - DAWN.COM)
(GDP (current US$) - Pakistan | Data (worldbank.org)
(GDP per capita (current US$) - Pakistan | Data (worldbank.org)
