According to a world bank estimate, around $590 billion was sent internationally through official remittance channels in 2014. Mobile phones are augmenting this industry by making it much easier for people to make remittances.

The mobile phone is increasingly the dominant means by which workers overseas keep in touch with their families and friends in their home country. Thus, mobile payments are becoming more and more common around the world. It’s natural, then, that mobile channels are now being used for domestic and international remittances, while reducing the cost and increasing the convenience.
Image source: Wikipedia.com

Faster money transfers

With the help of mobile phones, senders can transfer funds from anywhere in the world. They do not need to go to a local remittance center, fill out forms or stand in line to complete the transaction. Mobile payments can make it seamless and convenient.

Even for the recipients, a mobile remittance can cut through a lot of trouble they used to have. They do not need to go to a remittance center and fill out the form and stand in a line. They just need a simple SMS code which can be used to withdraw funds from a nearby ATM though cardless transactions.

Reduces bottlenecks in branches

Mobile remittance can reduce the number of people that visit a remittance branch in order to complete transactions. It alleviates the traffic inside the branch, reducing lines and waiting periods making it easier for the officials and other customers who can focus on more critical processes.

Decentralizes transaction points making it safer for customers

In most of the developing countries where people receive payments from their relatives outside the country, remittance centers can pose a threat. These centers are the prime targets for criminals, and people have been reported to get mugged just outside banks and remittance centers. Mobile payments allow people to transact from wherever they are, decentralizing the transaction points, making it harder for thieves to find any unsuspecting prey.

Reduces cost for remittance companies

Mobile remittance has the potential to cut costs for remittance companies by reducing the need for physical branches and personnel to deal with the clients, as there would be less walk-in clients. Mobile can be scaled without incurring any significant costs, making a mobile investment much better in the long term for remittance companies that want to expand their operations.

Makes remittance more accessible

The costs of running a remittance operation becomes less with mobile payments when used along with other remittance technology solutions. Hence, remittance companies can lower the cost of sending money for the end-user. This practice makes mobile remittance accessible to remote rural areas of developing nations, where it is needed the most. As the cost is lowered, people would flock to the formal and legal methods of remittance as they are more secure than any other illegal methods.

Mobile network has spread over wide areas, and it is no longer a wise move for remittance companies to ignore it. The company that gets traction in mobile channel is going to have a huge advantage in the market.