In 2023, North America emerged as the largest region in the money transfer agencies market, with digital remittances in the U.S. alone expected to reach $44.6 billion in 2025, according to Statista.
The rise in digital payments is a global trend that has taken the world by storm in the past decade, thanks to a commensurate rise in the adoption of mobile wallets and cashless transactions.
This trend has a significant impact on how the world works today, with the most impact evident in the international money transfers industry, which recorded about $831 billion in international transfers in 2022, according to the UN Migration report.
Looking at these data and the adoption rate of digital wallets and crypto assets, it is safe to conclude that the world is leaning towards a cashless economy.
Let’s look at the drive for a cashless future and the potential effects on international money transfer, as well as consumers, businesses, and the global financial ecosystem.
The Rise of a Cashless Economy
The first countries to adopt banknotes in Asia and Europe, China and Sweden, respectively, are also leading the charge for a cashless economy.
To have a better look at how fast the journey to a cashless economy is happening, it’s best to focus on Sweden.
Sweden’s determination to become the first cashless country in the world is very evident in its quick adoption of two major digital payment platforms developed between 2010 and 2012—with one backed by the nation’s six largest banks.
Since the broad shift to digital payments, the number of ATMs provided by resident payment service providers (PSP) in Sweden reduced from 3,566 in 2010 to 2,049 in 2023, marking a 54% decrease in 13 years. As at 2019, just about 1% of Sweden’s GDP was attributed to cash transactions.
According to Sveriges Riksbank, Sweden’s central bank, the country’s rapid shift to cashless digital transactions is propelled by the fact that digital transactions are generally faster, smoother, and cheaper.
National financial entities and the populace of countries leading the race for cashless economies, including China, Norway, the UK, and Finland, also share this sentiment.
Innovations in modern financial technologies are further streamlining this convenience and boosting transaction security, effortlessly facilitating digital payments and cashless economies across borders through international money transfers.
Current State of International Money Transfers
International money transfers are the go-to method for individuals to send money hassle-free to the local bank account of their loved ones at home or in other countries.
Traditionally, folks who needed to send money to another country usually relied on banks and wire transfers (processed through SWIFT) to send money abroad.
But there was one problem; these traditional international money transfer methods take about 1-5 business days to deliver—sometimes even longer.
Thankfully, modern fintech platforms solve this problem, as they make international money transfers faster and more secure. For instance, you can send money home with BOSS Revolution in just a few minutes! And it’s that simple: with a couple of clicks on your device, you can transfer money from the U.S. to many countries across the world almost instantly.
The money transfer speed, coupled with favorable exchange rates and transaction fees, make modern international money transfer platforms a top choice for individuals looking to send money abroad.
Implications of a Cashless Future on International Transfers
From the standpoint of domestic transfers, it might be difficult to reach a 100% cashless economy soon. However, looking at things from the perspective of international transfers, going cashless is simply the future.
Cashless international money transfer methods are largely preferred for being increasingly more:
- Efficient and fast, as you can easily send money from the U.S. to other countries within minutes.
- Cheaper, with low transaction fees easily offsetting the time and costs that would’ve been accrued with physical cash deposits and transfers.
- Secure and fraud-proof, thanks to blockchain integrations.
Despite these improvements, some challenges and concerns bordering potential accessibility issues, privacy and data protection, regulation and compliance, etc., remain critical questions needing practical answers.
As with its lead in cashless adoption, Sweden is currently creating an e-krona, a stable cryptocurrency that could help improve its approach to international money transfers. This could lead the turn in the widespread adoption of nationally backed stablecoins as a means of cross-border payments.
A Look into the Future
Fintech companies and PSPs are working around the clock to resolve the challenges faced by modern international transfer methods.
Disruptive technologies like AI and blockchain are leading the innovation attempts to further enhance transaction security, validation, inclusivity, personalization, efficiency, and speed while streamlining money transfer processes to lower transaction costs.
The European Parliament and Council, in March 2024, adopted the Instant Payments Regulation (IPR), which aims to boost the implementation of instant payments across Europe through European banks and fintech companies.
This is in line with the union’s earlier commitment to ensure that money transfers arrive in recipients’ bank accounts within ten seconds.
Regulatory efforts are also being ramped up in other regions across the globe to enhance money transfer processes and prepare and protect consumers for potential shifts that would come with the adoption of these disruptive technologies.
How Consumers and Businesses can Adapt
While PSPs are working on making international transfers more inclusive, financial experts encourage consumers to adapt to the fast-rising cashless economy by doing the due diligence to choose reputable money transfer platforms with top-class security and minimal fees.
On the other hand, businesses are encouraged to be open to investing in technologies and platforms that enable easy accessibility to digital payments and cater to diverse markets while staying compliant with applicable local and international money transfer regulations.
Conclusion
Clearly, a cashless economy is the future of the global economy. That much is clear with the way more countries are becoming cashless and the fast-paced technological advancements happening in the digital payment landscape.
It makes sense to stay ahead of the shift by embracing the opportunities and benefits that come with cashless payments, including fast and efficient transactions, reduced costs, and enhanced transaction security.
All of these start with ensuring that you are working with a reputable international money transfer provider and payment service.
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