Arab Press

بالشعب و للشعب
Thursday, Oct 02, 2025

The World Bank said remittances would fall 20% from the COVID-19 pandemic but fintechs in the space have seen unprecedented growth

The World Bank said remittances would fall 20% from the COVID-19 pandemic but fintechs in the space have seen unprecedented growth

"The World Bank said remittances will drop from Covid and would disproportionately impact on immigrants and yet people are sending money home still and digitally."

Every year, millions of workers worldwide send money home to their families. 2019 was a record year for the practice, known as remittance, with the World Bank estimating that a staggering $554 billion was sent by workers to what it terms as low and middle-income countries (LMICs).

During the early months of COVID-19, the organization amended its predictions for 2020 and indicated that volumes would likely drop by 20% as a result of the pandemic.

However, fintech startups which help immigrants send money home say they have had massive years despite the pandemic thanks to the general shift towards digital payments.

"The World Bank said remittances will drop from COVID-19 and would disproportionately impact on immigrants and yet people are sending money home still and digitally," Matt Openheimer, CEO and cofounder of Seattle-based remittances fintech startup Remitly, told Insider. "You have to understand our customers are leaving their families to move thousands of miles away. These are such resilient people and the industry doesn't tend to understand the immigrant experience."

Providers were braced for a drop-off in volumes in the early months of the pandemic. In Europe, pandemic lockdowns stifled economic activity.

"Everything happened really fast, we saw a steep decline in transactions for a couple weeks," Michael Kent, founder of London-based Azimo told Insider in an interview. "It was pretty terrifying to see revenues go down like that and VCs were going mad."

Despite that, Kent estimates that overall the business grew around 50% in 2020 after a boom in referrals which led to a "surge in new customers."

The remittance market has been the traditional preserve of existing players such as Western Union but digitization has been a trend in the industry for a number of years and was accelerated by COVID-19, Oppenheimer added.

"We saw customer numbers triple last year because once people get over the initial hurdle of doing things digitally, they realize we are faster and cheaper than the alternatives," he said.

Kent noted a similar experience at Azimo, with the startup noticing an older demographic of users coming to use the platform.

Michael Kent cofounder and chairman of Azimo
Digital disruption


Despite the enormous size of the global remittances market, it has on the whole remained a cumbersome and costly process. The average fee is around 6.8%, per the World Bank, and it can still take days for money to transfer to parts of the globe, often with eye watering foreign exchange rates.

Fintech startups like TransferWise, WorldRemit, Azimo, CurrencyCloud, and Remitly have sought to help make the market more transparent and cheaper. Research from FXC Intelligence, published in the Economist, indicated that fintech operators are significantly cheaper than incumbents on both fees and foreign exchange rates.

Markets such as India, Pakistan, The Philippines, Nigeria, and Mexico are among the largest recipients of remittances worldwide. Many report figures more granularly with some of the doomier expectations around COVID-19 failing to materialize. For example, Pakistan received a record-breaking volume of global remittances in 2020, with $7.1 billion pouring into the country during the third quarter of the year alone.

Similarly, macroeconomic factors impact the remittance market. The strong dollar weighed on remittances to Mexico from the US with a weak peso making it a more attractive trade than previously. In 2020, $40 billion entered Mexico in remittances, a year-on-year growth of 11.4%, according to research from BBVA. That figure in pesos exceeded the Mexican federal budget for education, health, labor, welfare, and culture for 2021.

The World Bank expects that remittance volumes will stay deflated through 2021 as the coronavirus pandemic continues. However, for fintech startups with a bevy of new customers and high hopes for the future, the macro picture doesn't reflect their daily reality.

"We're humbled and inspired by our customers every day," Oppenheimer said. "We're just getting started in the remittance market, we've served 3 million people but there are 250 million working outside of the place they were born."

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
×