Will remittance trends from 2022 in Zimbabwe continue in 2023?
Byline: By Susan Sitemere, Country Manager, Zimbabwe, and South Africa, WorldRemit
Remittances continue to offer a crucial lifeline in most developing countries across Sub–Saharan Africa, contributing significantly to changing the lives of millions of people. In Zimbabwe, diaspora remittances increased to $1.4 billion in 2021 from $1 billion in 2020, reflecting the outstanding contributions of Zimbabwean migrants to national development and providing financial aid to their families back home1.
Globally, remittance flows in 2022 to low and middle-income countries withstood global headwinds in 2022, increasing with an estimated 5% to $626 billion a sharply lower rate than the 10% increase in 20212.
According to the latest 2022 year in review by World Bank, remittances in Sub-Saharan Africa grew an estimated 5.2% to $53 billion in 2022, compared with 16.4% last year. However, in 2023, remittances are projected to soften to 3.9% growth as many nations face adverse conditions in the global and regional environments2.
With close to 82.80% of Zimbabwe's population living below the poverty line as of 2019 remittances have helped accelerate poverty reduction in the country3.
All eyes are now on what 2023 will bring for millions of families dependent on remittances each year with the widespread efforts to increase COVID-19 vaccination rates and stabilise the Zimbabwean economy.
With these factors in mind, remittance expert Susan Sitemere, Country Manager Zimbabwe & South Africa at WorldRemit, shares her top market trends for 2022 and beyond.
Remittance growth continues
As the preference for digital tools and services to conduct money transfers increases, digital remittances will continue to grow steadily throughout 20224. This shift towards digital, deeply accentuated by the pandemic, is predicted to continue as many tech-savvy customers opt for affordability and greater convenience.
Safety comes first
It is predicted that money transfer companies will continue to prioritise safety measures above all else. For international markets that enable migrants to send money, more companies will integrate additional features that allow them to validate the identification of their customers, from phones' IP addresses to the validation of identity documents.
On the receiving side, WorldRemit supports Zimbabwe by ensuring money is delivered directly and instantly through EcoCash mobile wallet service and via its robust network of cash pick-up locations across the country. Currently, WorldRemit has the largest network of cash-pick up locations in Zimbabwe compared to other IMTOs. All connections through our website and mobile app are secure and encrypted. We have also built a sophisticated automated machine-learning system for fraud detection.
Speed will continue to be of the essence
With new advancements across the digital landscape, expectations for the speed of money transfer apps and platforms are the opposite from what was there before and users expect money to be sent and received in minutes.
To deliver the best and quickest customer experience, companies will continue to invest in enhancing their technologies. Hence, data exchange with financial institutions will be more seamless, and the flow of remittances will be uninterrupted.
Our technology at WorldRemit allow 90% of money transfers sent to Zimbabweans to be ready within minutes5.
Money transfer services that work with API technology, which generates the confirmation that the receiving account or wallet is ready to receive the money, will be able to ensure transfers are completed almost in real-time. In addition, increased communication and tracking features will be integrated globally for users' peace of mind.
The simpler, the better
Companies will focus on making things as simple as possible, with a strong tendency to decrease the number of steps in each money transfer - from downloading the application and creating the user profile to adding the beneficiary. The trend toward more efficiency and effectiveness will ensure sending and receiving money becomes as easy as sending a text.
Digital remittances eliminate the need to go to a fixed payment point, saving users time and money. Living in the uncertainties of a pandemic, senders and receivers prioritize safety and look for a simple, straightforward solution for their transactions.
Technology has gained a more prominent role in people's lives, and money transfers have been no exception. A relatively new industry about ten years ago, digital money transfers and remittances are not only here to stay, but they are also slowly becoming the method of choice for customers by proving that they're just as safe as a bank transfer, and much faster, cheaper, and more convenient.