Quarterly Remittances Showing Steady Expansion in Q4 2021
In the final quarter of 2021, the remittance industry saw a mix of growth and decline, with some companies thriving while others faced challenges.
Western Union, a prominent player in the sector, experienced a slight dip in its Q4 performance, reporting a year-on-year decrease of 1%. This marked an improvement from Q3's -0.2% decline, indicating a gradual recovery. However, no specific information regarding the impact of the Russia-Ukraine war on Western Union was provided.
MoneyGram, another major player, managed to produce flat year-on-year growth for Q4, a slight improvement from Q3's -1% drop. This growth was attributed to MoneyGram's ongoing digital push, which helped the company counterbalance the declining cash retail trends. Interestingly, the company's Q4 2021 growth in the consumer money transfer segment began to stabilize after a tumultuous few quarters.
The Covid-19 cases are beginning to rise again, but no specific impact on MoneyGram or Western Union was mentioned in the reports.
Meanwhile, the new entrant, Remitly, saw a significant growth of 69% in Q4. This growth was primarily due to Remitly's ongoing global expansion.
Intermex, a retail player, also reported continued strong growth in Q4. Euronet, another significant player, showed a 10% growth in its money transfer segment in Q4, an improvement from Q3. The growth in Euronet's money transfer segment was driven by the company's focus on its platform offering.
The Russia-Ukraine war is disrupting remittance flow norms, potentially affecting these companies' operations.
As the industry evolves, competition among remittance companies intensifies. They compete on price by offering varying transfer fees and exchange rates depending on the destination, payment methods, and payout options. Customers are advised to compare providers to find the best combination of low fees and favourable exchange rates. Some specialize in cash pickup services, others in direct bank transfers, and promotions or zero-fee offers for initial transfers are also used to attract customers.
Notably, Western Union has a new CEO, who is likely to implement fresh moves in the coming quarters. MoneyGram's acquisition by Madison Dearborn Partners is expected to close soon, with no other bidders appearing during the 30-day go-shop period.
In conclusion, while some companies faced challenges in Q4, others managed to thrive. The remittance industry continues to evolve, with competition, digital transformation, and global events shaping its landscape.
