How fintech is changing the face of global remittance

Fintech, as the name suggests, is a collection of digital technologies which are revolutionizing the way financial transactions are done. Net banking has seen a slow and steady growth over the past two decades in India and elsewhere. Mobile banking and app-based transactions have undergone an explosive growth in recent years. Cryptocurrencies, although not widely accepted yet, have the potential to largely replace conventional currencies in the longer term. The adoption and spread of fintech events is subject to several factors.

Fintech for remittances

The acceptance of technology in any industry is correlated with the improvement in cost and convenience that it can bring. In case of remittances the impact of fintech was to make conventional transactions highly simplified and cost effective. Many of the oldest players in this domain such as nationalized banks adopted digital technology up to a point, while using much of the same legacy infrastructure. Some age old fintech remittance service providers were operating in this space for decades before newer players all but replaced them with lower cost solutions and services. In this way fintech brought about rapid and sweeping changes to remittances without really being disruptive.

The war on cash

There is a worldwide trend of governments and banks trying to slowly eradicate the use of paper money in favor of digital money. The 2016 demonetization move by the government of India is a prime example of this movement. One of the stated intentions of this drive was a push toward digital transactions. Immediately after demonetization the currency to GDP ratio in India sharply declined while the volume of digital debit card transactions rapidly increased. The volume and frequency of the use of digital wallets also expanded, along with the use of cashless payment modes in physical shops. The impact of this upheaval on remittances has been profound. Now when someone wants to send money to India the foremost options that come to mind are all digital. Changes in other parts of the world, although less overt and sudden, amount to the same. Regardless of the other impacts of the worldwide war on cash a huge demand for fintech services has been created. There is a conscious effort by the Reserve Bank of India (RBI) to make remittance transactions easier and cheaper. Therefore government support firmly backs fintech powered remittance solutions.


Blockchain technologies currently rank first among potentially disruprive fintech. Cryptocurrencies have the potential to drastically reduce transaction costs while improving transaction speeds manifold. This is made possible by eliminating many of the middlemen involved in financial transactions such as remittances. Cryptocurrencies are the only truly international fintech services. According to some financial experts blockchain technologies can cut remittance costs by up to 80 percent. They also have the potential to improve the safety, security and transparency of remittances. This is because blockchain technologies are resistant to threats such as hacking, data security breaches, and DDOS attacks, which target conventional online banking systems. Many banks are now experimenting with the implementation of blockchain tech and cryptocurrencies within their systems. This is being done with a view to replace traditional remittance methods such as the SWIFT interbank payment system. Another remarkable fact about cryptocurrencies is that they have the potential to make financial services accessible to people living in areas with very low banking penetration. This can be accomplished through mobile device-based transactions. Cryptocurrencies can thus make access to remittances possible for a billion or more people worldwide.


Owing to the improved convenience and speed of digital remittances fintech has made lasting inroads into the financial services domain. As per World Bank statistics worldwide remittances are set to cross $600 billion annually. The average cost of remittances currently stands at more than eight percent. Over a billion people worldwide do not have access to financial services. These are important areas of improvement which fintech must address. Fintech is set to not only change the face of global remittance, but comprehensively reform global finance.





Login/Register access is temporary disabled