How Money Transfers & Remittances Are Affected By The Covid-19 Pandemic?

How Money Transfers & Remittances Are Affected By The Covid-19 Pandemic?

How Money Transfers & Remittances Are Affected By The Covid-19 Pandemic?

 

 

As the world suffers from the economic and societal crisis due to Covid-19, the reports say that the flow of global remittances is projected to decline by about 20% in 2020, specifically in the low- and middle-income countries (LMICs).

This crisis is having a clear impact on:

  • Migrants and their families,
  • Local economies and communities,
  • And remittance service providers.

 

  1. THE IMPACT OF COVID-19 ON MIGRANTS AND THEIR FAMILIES.

Migration creates a great channel for income and remittances.

The current pandemic and the related interruptions in financial flows affected the migrants and their families.

Many migrant workers are facing unemployment or decreased incomes, and stuck in their host countries with little or no financial support.

Also, most families who depend on remittances to afford these basic needs are facing the acute consequences.

On the other side, remittance service providers are closing or reducing their working hours while limited public transportation, making it difficult for people to reach branches and cash-in or out.

These challenges that face migrants and their families in sending/receiving money, made it necessary to turn to technology to solve the problem of remittances.

 

  1. THE IMPACT OF COVID-19 ON LOCAL ECONOMIES AND COMMUNITIES.

Remittances contribute to more than 5% of the GDP of at least 60 low- and middle-income countries (LMICs).

Due to Covid-19 pandemic, foreign investment is expected to decline by more than 35% in 2020, making remittance flows a primary source of external financing for these countries.

It is important that action is taken to ensure that remittance channels from migrants will not drain, including through adoption of accessible digital technologies and technological solutions.

 

  1. THE IMPACT OF COVID-19 ON REMITTANCE SERVICE PROVIDERS.

Migrants’ income reduction means that remittances will drop down, and so the revenues of remittance service providers in sending and receiving countries.

Volatile exchange rates, forced closures, and remote working pose challenges to providers’ ability to manage their liquidity and continue operating.

Transitioning clients to digital channels is not that easy due to lack of digital readiness in the market and the obligations of face-to-face customer verification.

Higher rates of digital financial solutions can mitigate this, and help keep flows in formal channels.

 

HOW SHiFT RESPONDED TO THE GLOBAL PANDEMIC UPDATES?

Through studying the updates of the global financial situation, and in order to keep the lives of clients safe, SHiFT adopted many solutions for remittance challenges worldwide.

One of these solutions is the instant money transfer service from home via WhatsApp for clients in the UK & EU.

Through this service, the customer can transfer their remittances worldwide without socialization in public places!

 

The Whatsapp number for clients in UK: 00447903577160

The Whatsapp number for clients in EU: 0037061444149

 

References:

https://www.knomad.org/covid-19-remittances-call-to-action/

https://rosanjose.iom.int/SITE/en/blog/how-are-remittances-being-affected-covid-19

https://www.worldremit.com/en/stories/story/2020/09/11/sending-receiving-money-covid-19