Connecting the world with cross-border finance Connecting the world with cross-border finance

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The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters.

PRODUCED BY REUTERS PLUS FOR

Cross-border networks contribute to poverty reduction, financial literacy and gender equality

Freedom

through

finance

Cross-border networks contribute to poverty reduction, financial literacy and gender equality

Freedom

through

finance

Some 1.4 billion adults globally are unbanked. The majority of these are women, poor adults and the less educated, according to the World Bank’s Global Findex1. An estimated 800 million people worldwide2 receive money from loved ones to pay for things like food, education or unforeseen medical costs.

Bringing money to millions

In the Middle East, digital remittances are playing a crucial role for expats and blue-collar workers supporting millions of their families and contributing to their home country’s economy. Those sending money to help a friend or family member unexpectedly in need use cross-border remittances most frequently4, with 54% of consumers that were surveyed in the UAE having done so. Some 69% of consumers that were surveyed in the UAE regularly send money abroad to support family or friends.With digital apps becoming the preferred choice for sending and receiving funds internationally, innovative solutions are playing a vital role in facilitating this transition. Financial inclusion has become an increasingly significant way to alleviate poverty, reduce income inequality and promote economic growth. Innovative partnerships with financial institutions, fintech companies and digital remitters are championing the cause of financial inclusion and gender equality. Cross-border payment networks are instrumental in reducing poverty, promoting financial literacy and advancing gender equality.

The digital remittances process can be improved, particularly with a view to enhancing efficiency and user experience. The digital remittance process often encounters hurdles due to the intricate network of systems and channels involved. Simplifying this ecosystem is crucial to streamlining transactions and enhancing user experience.

International networks contribute to poverty reduction, financial literacy and gender equality

By providing businesses with the tools they need to expand their cross-border payment capabilities and by helping provide access to safe, secure and convenient money movement solutions, these solutions can help pave the way for a more equitable and prosperous future.

Collaborative efforts

Cross-border payments have long been plagued by challenges ranging from complex ecosystems to sluggish transaction speeds and security vulnerabilities. While digital remittances cost less than traditional ones, fees can still be high and calculating exchange rates can be difficult for migrant workers. The Money Travels report showed that many people who have sent funds in Saudi Arabia reported high fees (38%)5. Underbanked families worldwide continue to rely on cash because businesses in their communities still have limited digital payments infrastructure.

Meeting the challenge head-on

Despite the progress made in digital remittances, numerous challenges remain, particularly regarding cost and exchange rate transparency. Having to build and manage numerous complex ecosystems, networks and rails is a major roadblock, often partnered with slower transaction speeds and lack of transparency. In addition, businesses have to counteract security and compliance concerns and the cost of managing cross-border payments with evolving demand. With new market entrants and disruptors constantly emerging, the stakes of managing these complexities are higher than ever.

Towards greater equity

With more than 60 years of global payments leadership, Visa is at the forefront of shaping the future of money movement, and we believe that financial inclusion uplifts not only individuals and businesses but communities and economies.

Slow transaction speeds4 remain a significant pain point for digital remittances. Visa Direct addresses this challenge with its real-time** platform, expediting processes to meet the demand for real-time** transactions and ensure prompt fund transfers.

Connecting the world with cross-border remittances

MARCH 2024

Total digital remittances in UAE projected to reach

US$7.52bn

in 2024

69%

of consumers surveyed in the UAE regularly send money abroad to support family or friends4

3bn+ cards*

Visa Direct provides global reach to over 8.5 billion endpoints.

Countries like the UAE and Saudi Arabia are witnessing a surge in digital remittance adoption, driven by the promise of safer, faster and more private transactions. In the UAE, the transaction value in the digital remittances market is projected to reach US$7.52bn in 2024 and the number of total users is expected to reach 1.38m by 20283. According to the World Bank and KNOMAD, 29 countries received more than 10% of their GDP in remittances in 2022, while seven received more than 25% of their GDP this way. Far from just holding a digital card, account or wallet, digital enablement is an entire ecosystem that allows people to send, receive and then spend money through solely digital channels, unlike the traditional means of remittance where the process starts with the cash over the counter and ends once the cash is withdrawn.

Through innovative money movement solutions such as Visa Direct, Visa is demonstrating a commitment to building the cross-border payment infrastructure of tomorrow, driven by a vision of inclusive economic growth and financial empowerment. The company’s global network and expertise is helping drive industry awareness and creating positive change across the CEMEA region.

Collaboration between the public and private sectors is essential in driving further innovation and expanding the reach of digital remittances. By investing in technology, Visa is working to empower individuals and communities across the Central and Eastern Europe, Middle East and Africa (CEMEA) region through eligible financial institutions.

Recognizing the need for transformative solutions, Visa Direct tackles some of these challenges head on. With its real-time** payment platform, Visa Direct helps facilitate fast and convenient cross-border transactions, across geographical boundaries and a range of currencies. With capabilities spanning more than 8.5bn endpoints (accounts, cards, wallets) across more than 190 countries and territories, and 160 currencies, Visa Direct is helping businesses to navigate the global marketplace with efficiency and security.

IVAN PONOMAROV Head of Visa Direct CEMEA

2.5bn+ digital wallets

3bn+ accounts

Many industry challenges persist, including complex ecosystems, inconsistent user experience and slow transaction speeds. With Visa Direct’s Alias Directory, however, consumers can benefit from a better payment experience for both sender and receiver in a variety of use cases, including cross-border remittance. The Visa Direct Alias Directory has been created to help simplify payments, improve the user experience and protect sensitive payment information by using aliases such as phone number or email ID.

Digital money movement requires speed, and Visa Direct's Alias Directory is designed to help streamline payments, enhance the user experience, and help safeguard sensitive payment information by enabling participants to link aliases such as phone numbers to payment credentials.

References

1 The Global Findex Database 2021 2 Remittances matter: 8 facts you don’t know about the money migrants send back home 3 Digital Remittances - United Arab Emirates 4 Money Travels: 2023 Digital Remittances Adoption 5 Visa Defines New Era of How Money Travels Abroad ** Actual fund availability depends on receiving financial institution and region

The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters.

PRODUCED BY REUTERS PLUS FOR

IVAN PONOMAROV Head of Visa Direct CEMEA

New digital business models with faster speed, better transparency and lower costs will help remittance flows become truly digital. While the work being done is a step in the right direction, addressing these remaining barriers is crucial to ensuring that digital money movement remains accessible and affordable for all.

Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.

*eligible cards

Learn more about Visa Direct