Exploding Cryptocurrency Use In Remittances From US: 15.8% Now Using Cryptocurrency (#GotBitcoin?)
The survey revealed 20 countries receiving most remittances from the U.S. in 2017. The top ten countries represented on this list are in order, Mexico, China, India, Philippines, Vietnam, Guatemala, Nigeria, El Salvador, Dominican Republic and Honduras. Unsurprisingly, the breakdown of these remittances shows family taking the highest percentage at 76.8 percent.
Crypto’s Growing Influence And Possibility For Disruption Clovr’s breakdown of money transfer methods shows that roughly half of all surveyed people indicated that they use PayPal and money transfer services like Western Union, compared to 15.8 percent who use cryptocurrency, 25.7 percent who use traditional bank wire transfers or credit union, 12.2 percent who use prepaid cards, 11.8 percent who use check or money order via mail, 11.5 percent who use check or money order online, 8.9 percent who use cash via mail, 6.1 percent who use traditional wire transfer via post office, and 1.9 percent who use other methods.
To illustrate the potential of cryptocurrency to create substantial disruption in the space due to its low cost and speed, the study revealed that in order to send $500 abroad, banks charge $52.05 on the average, compared to $30.75 for money transfer operators, $34.05 for the post office and $16 for mobile operators. Customer satisfaction was pegged at 93.3 percent for online services, 84.1 percent at money transfer services and 73.3 percent with traditional wire transfer, via bank or credit union.
In line with other existing data on cryptocurrency use, the study shows a significant gender knowledge gap on the subject of cryptocurrencies among non-users as men continue to dominate crypto adoption. The study concludes that the money transfer industry is “ripe for disruption” through the introduction of cryptocurrency-based solutions, which could potentially offer a cheaper and faster way to transfer funds.
An Excerpt From The Report Reads:
People sending money home after they’ve migrated from other countries to the United States is a practice that will likely continue far into the future… As individuals look to make sure that as much of every dollar they send can make it back – as close to a one-to-one match as possible – digital payment options, like those presented by cryptocurrencies, can pique the interest of customers.
Mexicans In U.S. Sent Record Remittances Despite Covid-19 Pandemic
Unexpected surge in amounts forwarded home shows resilience in U.S. construction and agriculture.
Mexicans working in the U.S. sent record amounts of money to relatives back home last year, illustrating the resilience of the U.S. economy despite the shutdowns imposed to fight the pandemic.
The surge in remittances, which surprised analysts and migrants alike, provided a lifeline for many poorer Mexicans in the midst of the country’s biggest economic slump in decades.
Remittances rose 11% to $36.9 billion in the first 11 months of the year, more than the record $36.4 billion sent in all of 2019, according to figures released this week by Mexico’s central bank. The average remittance was 4.3% higher at $340, the bank said.
In Guatemala, El Salvador and Honduras—the Central American countries that make up the Northern Triangle—remittances slumped in April but later rebounded, and were up 3.4% from January through October.
After the pandemic caused U.S. unemployment to surge to double-digit levels earlier in 2020, the World Bank and others projected that remittances to Mexico and elsewhere in Latin America would fall close to 20% from 2019, threatening a critical source of income for families that rely on the transfers to make ends meet.
“Even I’m surprised, with so many of my countrymen out of work, above all those that work in restaurants,” said Hermelindo Saldaña, a resident of Santa Ana, Calif., who sends money to his mother in Mexico’s Yucatán state. “But people look for ways to make some money to send.”
Banco Bilbao Vizcaya Argentaria estimates that there are some 39 million people of Mexican origin in the U.S. including immigrants, U.S.-born residents with Mexican parents, and third- or later-generation U.S. citizens of Mexican descent.
Many activities in which migrants are employed didn’t shut down completely in the U.S., such as construction, gardening and agriculture, and a significant number of migrants were eligible for unemployment benefits under the U.S. government’s stimulus plan, said Alfredo Coutiño, the director for Latin America at Moody’s Analytics. And because of the crises in their home countries, migrants faced the need to send more money to their relatives, he added.
The 58-year-old Mr. Saldaña, a painter from the southern Mexican state of Guerrero, said work in construction held up “because people are at home, looking to see what needs to be done.” And migrants who had work were spending less because they couldn’t go out to restaurants or amusement parks, and could send some of those savings home, he added.
MoneyGram International Inc., the Dallas-based money transfer company, said that in a December survey of around 1,500 of its customers, 69% said they sent more money in 2020 than the previous year despite hardships caused by the pandemic.
Most cited increased needs of family and friends in their home countries, particularly to pay for food, housing and healthcare. And six out of 10 customers said they had made greater use of digital tools to send money than before.
Mexican President Andrés Manuel López Obrador, whose government responded to the crisis with only a limited stimulus to keep government debt from swelling, has called the rise in remittances “a kind of social miracle” that helped sustain consumption of basics during the economic downturn. Mexico’s economy is expected to have shrunk 9% last year, its biggest fall since the Great Depression.
A rapid recovery in U.S. employment has also played a role.
Petra Fuentes, a 77-year-old grandmother of 21 in the central Mexican state of Hidalgo, said she stopped receiving remittances between March and May, when her daughter lost her job at a frozen-foods plant in Kentucky.
Transfers resumed after her daughter found work at a plant that makes optical lenses as employment activity picked up in May.
“I pay for my electricity, water and groceries with what my daughter sends me,” Ms. Fuentes said. “When I didn’t receive anything for those months, I had to pay for those with the help that the government gives to people over 70.”
Another contributing factor could be the restrictions on U.S.-Mexico border crossings because of the pandemic, which appears to have prompted migrants to resort to electronic transfers instead of taking cash in person or sending it with relatives or friends. Electronic transfers are more likely to show up in the data.
Border crossings last year were down sharply from 2019, after having steadily increased since the 2008-09 financial crisis.
“People are still crossing the border for business and to see families,” said Mark Lopez, director of global migration and demography research at the Pew Research Center. “That’s still happening, but not to the degree it was before.”
Mr. Lopez sees the resilience of the U.S. economy as a crucial support for remittances.
“I think it’s a U.S. economic story as it reflects the U.S. rebound itself, in employment at least,” he said. “It’s not just Mexican immigrants who might be doing better, but others too.”
Remittances elsewhere also point to the strength of the U.S. recovery. Overall remittances in the Philippines, whose expatriates are more widely spread across continents, were down 0.9% in the first 10 months of the year, but those from the U.S. were up 5.9%. Remittances to the Dominican Republic, which has most of its emigrants in the U.S., rose 13% in the first 10 months of 2020.
Remittances have for years exceeded receipts from oil exports and foreign tourism as a source of foreign currency in Mexico, supporting the country’s finances. Lower oil prices and reduced international travel have made remittances even more important for Mexico.
Coupled with the expected contraction in Mexican economic output, remittances are likely to be equivalent to 3.8% of 2020 gross domestic product, up from 2.9% of GDP in 2019, according to analysts at BBVA.
Remittances should continue to grow this year, though they will likely return to a more consistent moderate growth of about 5%, Mr. Coutiño said.
Migrants Keep Money Flowing Home As Rich Economies Bounce Back
Remittances provide lifeline for poor countries still in the grip of the Covid-19 pandemic.
Over the years, Aiza Bolo, a 36-year-old housewife in the Philippines, has come to depend on the $550 her stepbrother sent her each month from his job in Dubai.
When the pandemic struck and the income from a fruit stand her parents own dried up, her stepbrother began sending as much as $950 a month. That enabled her to keep buying medication for her parents and purchase a laptop and internet connection so that her 13-year-old son could continue his schooling online.
“What Justine sends is more than just money. It is a lifeline for us,” Ms. Bolo said. “There was barely any income during the pandemic, so we all relied on him.”
Funds that migrant workers send home—known as remittances—have long offered millions in the developing world critical support, paying for needs including schooling, shelter and healthcare for relatives back home.
Many of those migrant workers continue to send money back, often despite their own economic difficulties, providing financial cushions in countries where Covid-19 cases are still high, vaccines are slow to arrive and the economy is struggling.
In 2020, global remittances dropped 2.4% to $702 billion from the previous year, less than half the drop recorded in the aftermath of the global financial crisis in 2009, according to the World Bank. Remittances to low- and middle-income countries were particularly resilient, falling 1.6%.
Early in the pandemic, the World Bank had estimated that remittances would decline 20% in 2020. Last autumn, it was predicting a 14% drop for all of 2020.
To be sure, part of the resilience stems from the increased use of formal channels to transfer remittances, which are easier to capture in data than the informal channels many migrants relied on when global travel was easier.
Other drivers behind the strong remittance flows have to do with the large government support programs in rich countries, notably the U.S. and parts of Europe, that have enabled migrant workers there to maintain some financial stability. At the same time, the economic crisis last year—which has yet to abate in many poor countries—pressed some migrants to raise their payments to needy family members.
In a recent survey by MoneyGram International Inc., a money-transfer and cross-border payments company, 70% of respondents said the crisis prompted them to send more remittances back home, said the company’s chief executive officer, Alex Holmes.
“They believe that people in those home markets are more in need this year, and last year, than ever before,” Mr. Holmes said.
In 2020, remittances to Latin America and the Caribbean increased 6.5% from the previous year, fueled by a rapid economic recovery in the U.S. and two hurricanes in Central America that prompted workers abroad to give more financial support than usual, according to the World Bank.
Oscar Andara Guerra, a 43-year-old vegetable vendor in San Pedro Sula, Honduras, said the $300 a month he receives from his mother is essential. His mother, who has been working in the U.S. for more than three decades, also sends money to his siblings.
“She works in cleaning and never, not even during the pandemic, did she stop sending us money,” Mr. Guerra said. “She even helped me buy the bed I sleep in.”
In some parts of the world, households have shifted how they spend remittances as the pandemic forces many families to give priority to basic needs. Government statistics from the Philippines show that the percentage of households relying on remittances to cover education costs dropped from 65% in the last quarter of 2019 to 60% for the same period in 2020.
During that time, fewer households in the Philippines used remittances to purchase cars or add to savings, while more began using the funds to cover medical expenses. The number of households using remittances to buy food and basic necessities hardly changed.
The monthly financial support Ms. Bolo receives from her stepbrother has helped offset her family’s lost income from selling fruit in the market and renting out an apartment that was also purchased with remittances from Ms. Bolo’s stepbrother.
“Even after the strict lockdown was lifted, business was still not the same,” Ms. Bolo said. The pandemic has left the rental apartment empty often, while tenants sometimes failed to pay rent on time, she said.
Not all households receiving remittances have been shielded from the pandemic’s economic blows.
In India’s Kerala state, where one in five households receives remittances, many families saw the flow abruptly stop when deteriorating economic conditions in the Middle East forced migrant workers to return home. One in six migrant workers from India has returned home since the pandemic began, according to S. Irudaya Rajan, chairman at the International Institute of Migration and Development in Kerala.
Biju Matthew, 48, returned home to Kerala in February from Kuwait after his company stopped paying him and two dozen other workers.
“When we went to complain, they asked us to resign, offered to give back our passports and pay for flight tickets back home. We refused to leave,” Mr. Matthew said.
His company later asked the workers to vacate the housing facility it had been providing. When the workers refused again, the firm cut off the electricity supply and refused to give their overtime pay. He stopped sending money home for about half a year before returning.
Now, Mr. Matthew works as a supervisor at a mall in Thiruvananthapuram, Kerala’s capital, earning a little over $200 a month, less than a third of what he earned in Kuwait.
“It feels like my life has been pushed 20 years back,” he said. “All I can think of is surviving the day.”
Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,Exploding Cryptocurrency Use In,