A Snapshot of the World Money Transfer Market
Every year, migrant workers living in other countries send money back to their home countries. The flow of money earned in one country and sent to another is known as remittances. Remittances account for one of the main forms of international money transfers, in addition to foreign direct investment and development aid.
- Developed countries like the U.S., Canada, Japan, and the U.K. tend to have more outflows than inflows of remittances.
- Developing countries like India, Egypt, and Brazil have more inflows than outflows of remittances.
- Remittance flows follow regional patterns. For example, eastern Europe and central America have more inflows, while the Middle East and northern Europe have more outflows.
- Unlike foreign direct investment or development aid, most remittances are sent to individuals rather than the state. Remittances are often used for basic necessities like food and housing.
Our latest visualization uses the World Bank’s April 2019 Migration and Remittances data to chart whether each country sends out more remittances (outflows) or receives more remittances (inflows). Countries shaded in pink indicate a higher volume of outflows, while green indicates a higher volume of inflows.
Looking at a more micro level, we can gain a better idea of how remittances vary across countries and regions. In the visualizations below, we map out the remittance inflows and outflows of each country. The size of the country indicates the volume of remittances (the bigger the countries, the more remittances). The pink and green shading are also in direct proportion to the size of the inflows and outflows. All monetary values are expressed in USD.
Among all world countries, the U.S. has the largest number of outflows at $68 billion. Conversely, almost all remittances in Mexico are inflows ($32.3 billion). Countries in the Caribbean vary greatly in whether inflows or outflows are the greater proportion of remittances, while countries in Central and South America tend to have more inflows. A few notable exceptions are Chile, Argentina, and Panama, which all have a higher volume of outflows.
In the Australia and Oceania region, Australia ($8.8 billion) and New Zealand ($969 million) have the highest total remittances. Unlike most of the Oceania region, both of these countries also have a significantly higher proportion of outflows. In Africa, Egypt ($25 billion) and Nigeria ($22.3 billion) have the highest volume of remittances. Interestingly, most of the countries in northern and central Africa have a higher volume of inflows, while countries in the south like South Africa and Angola have more outflows.
Overall, countries in east and southeast Asia tend to have more inflows than outflows. Outliers include the highly developed nations of South Korea and Japan, which send out more money than they take in as remittances. Worldwide, India has the highest volume of inflows, at $69 billion. By contrast, most countries in the Middle East have a greater percentage of outflows. For example, the United Arab Emirates sends $44.4 billion as outflows, but does not have any significant inflows.
In Europe, wealthy northern and western countries like the UK, Germany, Norway, Switzerland, and Luxembourg have a greater volume of outflows. By contrast, countries in eastern Europe like Ukraine, Hungary, and Croatia take in more inflows. At $38.9 billion, Germany has the highest number of total remittances.
Due to the high cost of regular remittance services like Western Union, new innovations in fintech and mobile banking are flourishing, especially in Latin America and sub-Saharan Africa. There is a lot of money on the line for the providers of these services, and newcomers like the TransferWise “borderless” bank account are entering the race to make money transfers as seamless as possible. Even established businesses are trying to get in on the action. Facebook, for example, wants to add cryptocurrencies to the mix to compete in the money transfer market too. As technology related to money transfer continues to evolve, it remains to be seen how these remittance statistics are going to change.
Have you worked abroad and sent remittances back home? Leave a comment below to share your experience.
Data: Table 1.1