Em Conversa: The Evolving Remittance Market with Paysend

Em Conversa tries to uncover the mysteries of Latin America (Latam). who caused this Fintech market is booming, from less than $50 million in 2016 to $2.1 billion in 2022. This week we spoke to Jairo riversManaging Director for the Americas and Global Head of Strategy Paysendabout how the remittance market has developed in LatAm.

Paysend is the payments platform that enables customers and businesses around the world to pay, store and send money online anywhere, anytime and in any currency. Paysend is based in the UK with a global reach and was founded in April 2017 with a clear mission to change the way money moves around the world. It is the first payments disruptor to introduce global card-to-card transfers.

Paysend currently supports connections between 12 billion cards worldwide MasterCard, Visas, China UnionPay and local card schemes in several countries around the world. It is active in 60 countries worldwide and has a network of over 110 recipient countries, and the trend is rising.

With over 20 years of experience in various industries such as payments, pensions and investments, we spoke to Riveros to understand how Paysend entered the Latin American market

Can you tell me more about the company and your role in it?
Jairo Riveros, Managing Director for Americas and Global Head of Strategy at Paysend

Paysend was founded five years ago with a mission to change the way money moves around the world. The company was founded in 2017 and to date has served more than 7.5 million consumers who send Money in over 150 countries worldwide.

at Paysend, my role is that of General Manager for the Americas and Global Head of Strategy. I am responsible for defining and executing regional business strategy in the US and Latin America, building our world-class fintech team, and securing additional regulatory approvals, licenses and partnership deals across the Americas.

How has the transfer market in LatAm developed in recent years?

Post Pandemic The World Bank estimated that remittances from the US to Latin America would fall by 20 percent – ​​but the opposite happened. Remittances began to boom in the region as migrants, more than ever, wanted to support loved ones abroad.

Until recently, most banks in Latin America did not have digital options such as mobile apps, leading to an increase in the unbanked or underbanked population. Individuals have been forced to personally manage their finances at a physical banking location that is far and wide making this difficult send funds regularly.

In these cases, users were also faced with extensive paperwork, sometimes including outdated requirements such as landline phone service, although in countries like El Salvador and the Dominican Republic, having a mobile phone only was increasingly preferred. Digital money transfer methods have made it easier to send money to friends and family in LatAm.

How has the remittance market been affected by inflation?

Even before inflation, migrants often saved money send every month to their families. Today, 75 percent of migrants report that the cost of living for those who do send Money has been going up since early 2022. This has pushed migrants to save even more money send back home, despite fears of a recession in the US and other countries.

Consumers around the world are also feeling the effects of inflated tariffs, meaning many migrants who have to support their families have to send additional funds to meet rising costs. Migrants are known for being hardworking and adaptable, so it’s not surprising that people around the world are reportedly actively saving on their daily expenses to maintain their ability to do so send Money home to support loved ones.

Is LatAm affected differently than the rest of the world?

Only 30-50 percent of the Latin American population over the age of 15 has an account with a financial institution, leading to banking disparities within the region. Additionally, monopolies held by more prominent financial institutions have stunted the progress and personal economic growth of many.

Due to the lack of financial services support, the Latin American population faces obstacles such as regulations and requirements to do banking.

Fintechs are democratizing the financial space by providing the unbanked with ways to manage their funds outside of a traditional bank account. This is why we have seen such a boom in digital penetration and funding in the region. Aware of the obstacles faced by underserved populations, fintech companies are taking significant steps to break the cycle, whether by providing financial literacy or facilitating access to financial tools for people in the developing world.

How can those sending money back be helped in financially difficult times?

(“In fact, 49 percent of respondents said they ate out less, and 46 percent said they cook more at home to save on daily expenses so they can continue sending money abroad.”)

Due to rising costs and rates of inflation, many consumers are limiting their leisure spending to ensure they have the means to support themselves and loved ones during these times.

Separating your costs into essential and non-essential items can help consumers manage their funds and consciously think about which costs take precedence over others. Consumers should also create a budget that includes outlined financial goals to avoid spending more than they make.

It’s also good practice to keep track of the amount you’ve spent in any given week or month. Money management platforms like Paysend Allow users to keep track of their spending online and on the go.

what is Paysend do to help remittance users suffering from the high cost of living and inflation?

With the onset and persistence of Covid-19, along with the cost of living and inflation rates remaining in flux around the world, digital remittance companies left and right have touted that they have the lowest fees on the market. However, customers still have to spend more money on transfers due to hidden fees.

Historically, there has been a lack of total cost transparency in the industry. Transfers can increase prices due to exchange rates, transfer fees, reception fees and more. We’re proud to have already achieved this mobility goal and offer customers a flat transfer fee of $2.

Paysend‘s promise to users is to offer our customers instant, free and limitless global transfers send more money for their loved ones at home.

What is the company’s roadmap and growth plan?

This year, Paysend has a partnership with Visa Direct, MasterCard Send and MOVii wallet Expand our digital footprint in the Latin American region. Our team will continue to focus on partnerships like this to expand our capabilities in Latin America to support local economies and contribute to financial inclusion around the world.

We also recently opened our headquarters in Miami, a strategic location with rising status as a global fintech capital, making it the best place to serve PaysendCustomers in the US, Canada, the Caribbean and Central America.

Final Thoughts?

The increasing penetration of internet and mobile phones, as well as the expansion of digital solutions, will further enable financial inclusion in the region as customers seek faster, more convenient and cheaper solutions than those offered by traditional banking systems.

at Paysend We will continue to advocate for consumers by offering instant, freemium and borderless transfers so our customers can continue to do so send Money home at a fair price.

  • Francis Bignel

    Francis is a journalist with a BA in Classical Civilizations and has a particular interest in the Americas.

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