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Consumer Money Transfers: Powering Global Remittances

Consumer Money Transfers: Powering Global Remittances

Aite Group reveals that major cash-to-cash money transmitters continue to gain market share in the rapidly expanding workers’ remittance market. Global workers’ remittances will reach US$289 billion by 2007, up from US$231 billion in 2004.

Boston, MA, January 25, 2005 –In a new report, Consumer Money Transfers: Powering Global Remittances, Aite Group reviews market trends in the global workers’ remittance market. Among key findings, the report shows that the remittance market is much larger and growing more rapidly than often suspected. Global workers’ remittances have grown from US$165 billion in 2000 to US$213 billion in 2003, and are expected to reach US$289 billion in 2007.

Aite Group also reveals that cash-to-cash money transmitters continue to gain market share. The top four money transmitters, Western Union, MoneyGram, Dolex and Vigo have grown their market share of U.S. outbound remittances from 27% in 2000 to 40% in 2004.
 

However, in the shadow of cash-to-cash networks, some new money transfer services are emerging. By the end of 2006, Aite Group estimates that there will be 1.1. million Visa/MasterCard money transfer cards issued in the U.S., up from 400,000 in 2005, and 145,000 in 2004. By 2006, U.S.-issued money transfer cards will account for 1.9% of the face value of the remittances sent out of the U.S, up from 0.7% in 2005.

Aite Group estimates that Bank of America has already taken the lead with SafeSend over other banks with similar programs. “This should set off alarm bells among Bank of America’s competitors” comments Gwenn Bézard, a Research Director with Aite Group and co-author of the report. “With SafeSend, Bank of America is taking one of those small steps that consolidates its appeal to the Hispanic market, a segment of the U.S. population poised to play a considerable role in the development of the domestic retail banking industry,” points out Bézard.

This is a 46-page Impact Report. Clients of Aite Group's Retail Banking service can download the report.