The digitization of remittances is transforming the global financial sector and optimizing the user experience. Technological solutions such as those from Inswitch allow businesses and users to make cross-border payments efficiently, scalably, and in a regulated manner, opening new opportunities for financial inclusion and economic development in Latam.
In an increasingly competitive fintech business environment, where regulations to prevent money laundering and other illicit activities demand greater efforts from companies, the digitization of remittances has disrupted businesses and helped them sustain the ‘boom’ in cash flows.
These data reflect a key reality for companies operating with cross-border payments: the user experience is no longer just a differentiator but a market requirement. The speed of fund delivery and transaction security are absolute priorities, forcing companies to adopt solutions that ensure real-time payments and frictionless regulatory compliance.
Furthermore, the demand for transaction confirmations and tracking indicates that users require transparency and control over their funds, posing a challenge for traditional providers that still rely on fragmented systems. Fintechs that successfully integrate these elements into a seamless digital experience will dominate the sector.
In this scenario, Inswitch is the ideal partner for businesses seeking to offer efficient, secure, and scalable cross-border payments. Its API-driven platform not only meets these needs but also enables fast and adaptable integration into different business models, ensuring companies can retain customers, reduce operational costs, and accelerate growth in global markets.
Remittance Technology Solutions
Leading remittance companies are adopting technologies that allow them to centralize key KYC/KYB (Know Your Customer/Business) and AML (Anti-Money Laundering) functions to verify identities globally. They are also implementing comprehensive fraud management tools, enabling them to define policies, rules, user scoring, whitelists and blacklists, and anti-money laundering restrictions.
These advanced solutions also involve detecting suspicious activity through user profiling, limits, and event-based alerts to identify risks in real-time, with automatic notifications that enable swift and effective responses to potential threats.
According to a global survey conducted by Mastercard across 15 countries, while consumers tend to report more fraud cases in domestic payments, 34% of respondents perceive cross-border payments as the primary risk. “This perceived danger prevents many individuals from even attempting cross-border payments. Trust is essential.”
The Global Payment Ecosystem in Numbers
The global payment ecosystem is rapidly evolving, with users prioritizing speed, security, and seamless experiences. These preferences reflect the growing demand for innovative solutions that address diverse needs in an increasingly connected world.
46% of international payments are already made through banking apps, with key markets like Mexico (50%) and the U.S. (33%) increasing adoption. The growth of digital wallets (45%) and remittance apps (37%) confirms a trend: users demand integrated, secure, and frictionless mobile solutions.
For businesses, this represents both an opportunity and a challenge. Without digital cross-border payments, they risk losing customers to more agile competitors. Inswitch enables the integration of international payments into any digital ecosystem, ensuring speed, compliance, and scalability.
The transformation is clear: companies that offer mobile cross-border payments will capture customers and dominate the global market.
To meet these expectations, it is essential to have robust, adaptable, and secure financial platforms that connect local and global needs. With its comprehensive suite of integrated financial solutions, Inswitch stands out as the ideal partner for companies seeking speed, security, and scalability in their operations. By adopting advanced technologies such as its API-driven platform and user-centered designs, Inswitch not only strengthens customer trust but also drives financial inclusion and significantly enhances operational efficiency on a global scale.
Growing Demand and Technological Advances
Alongside regulatory compliance, the digitization of remittances is addressing the growing demand for money transfer solutions beyond borders. This is occurring amid an unprecedented wave of human displacement and changes in work dynamics driven by remote work.
Remittances to Latin America and the Caribbean have grown by 159% in the past decade, increasing from $62.2 billion in 2014 to $160.9 billion in 2024. This rise reflects the growing dependence on these flows for local economies, especially in countries where they represent a significant portion of GDP.
For businesses, this growth not only means higher transaction volumes but also a key opportunity to capture and optimize these financial flows. Digitalizing the process is crucial: users demand speed, reduced costs, and mobile accessibility in their transfers.
Inswitch enables banks, fintechs, and retailers to offer efficient cross-border payments through its API-driven platform, reducing costs and improving the user experience. In an expanding remittance market, companies that adopt digital solutions will lead the next decade.
Within this framework, technological solutions address key aspects such as processing payment orders and managing international collections, as well as executing mass payments with automated tasks. Inswitch stands out in this field, as its Cross-Border Money Services facilitate cross-border payments with efficient and scalable processes.
This Inswitch service, presented as a “remittance in a box,” is based on digitizing and simplifying the remittance process, offering multiple payment options for both senders and recipients. With a focus on flexibility and convenience, Inswitch transforms processes that once took days into transactions now completed in minutes. For example, it allows the recipient to send a remittance request and the sender to approve it remotely, optimizing the user experience.
Opportunities in the B2B Market
These tools also open a window of opportunity to develop the business-to-business (B2B) remittance market, which still has untapped potential. Industry trends include simplifying the mass dispatch of payment orders via QR or barcodes and managing the entire collection process through APIs. These tools enable companies to make mass payments to employees or suppliers, directly to their preferred payment method and in their local currencies.
Inswitch's Cross-Border Money Services offer key functionalities, among which the following stand out:
Advanced Features for Seamless Transactions
With this service, remittances are sent and received 100% digitally, with multiple payment options such as cash, banks, wallets, credit cards, and checks. Users can receive money through their preferred channels, including cash networks, bank transfers, or cards. Additionally, they can open a U.S. bank account, make payments, send remittances, and manage transactions from anywhere with a card linked to their account.
Advances in payment systems and the digitalization of remittances are key aspects that explain part of the good dynamics of hiring under this modality, which is also diversified thanks to the use of collection methods such as cryptocurrencies and stablecoins that are pegged to the dollar.
Technologies such as APIs, advanced encryption, and process automation are fundamental to address challenges like lack of traceability, high costs, and transaction security.
For example, automation and AI help optimize global transaction management and tracking, while also speeding up money transfers. Other applications include forecasting currency demand to ensure liquidity and reducing failed transactions.
Chatbots, digital apps, and other tools are also enhancing the customer experience by providing real-time transaction updates and making it easier to access funds, by eliminating unnecessary steps, users have a smoother experience with financial services.
Remittances: A Key Economic Driver
According to a report by the Inter-American Development Bank (IDB), remittances to Latin America grew by 5% in 2024 compared to 2023, reaching $161 billion. Specifically, South America saw a 9.1% increase, totaling $31.7 billion. Latin America has become one of the top global remittance destinations, with remittances contributing about 2.5% of GDP. In some Central American and Caribbean countries, this figure can reach double digits.
A Deel report highlighted a 35% increase in remote hiring by international companies in Latin America in 2023. Argentina, Colombia, and Brazil led the region in remote employment. Factors driving this trend include growing adoption of digital technologies like AI, labor market globalization, and the adaptability of Latin American professionals.
Remittances are particularly crucial for low- and middle-income countries, serving as a vital source of foreign currency for households. According to JP Morgan, remittances in Latin America grew from 1% of GDP in 2012 to 2.6% by the end of 2022.
The money that flows through remittances has a particular impact on vulnerable populations, which include women and informal workers. Nevertheless, their contribution to GDP is higher in countries like Nicaragua with US$5.196 billion accounted for in 2024 (27.6% of GDP). (Source of the graph IDB).
Challenges in Cost Reduction and Increased Transparency
From migrants sending money home to their families, to freelancers getting paid in Latin America, remittances and the fintech platforms that help with these transactions are changing how finances work.
From remittances sent abroad by migrants to their families, to the payments received by ‘freelance’ workers in regions like Latin America, remittances and the fintech platforms that facilitate these operations are driving a transformation in finance.
Magda Bianco, co-chair of the G20's Global Partnership for Financial Inclusion (GPFI), says, "Going digital lowers transfer costs, speeds up transactions, and makes payments more secure and traceable."
"It also gives you access to financial services like savings, credit, and insurance, especially when there are good consumer protection rules and financial education. These things help more people use financial services and make families who get remittances more financially secure," adds Bianco, who is also responsible for the Consumer Protection and Anti-Money Laundering Service of the Bank of Italy.
Going digital can help lower costs and reduce the use of cash.
One of the challenges is that cash still represents almost 50% of formal global remittances and is one of the causes of the still high costs of these transfers, resulting from the operation of traditional physical agency networks.
The World Bank estimates that sending $200 to Latin America and the Caribbean cost, on average, 5.9% of the total in 2023 ($11.8). In Sub-Saharan Africa, it was 7.9%; in Europe and Central Asia (excluding Russia), 6.7%; in the Middle East and North Africa, 5.9%; and in South Asia, East Asia, and the Pacific, 5.8%.
Digitizing remittance processes can potentially lower these costs and make the user experience smoother. Plus, it helps fight money laundering and other transnational crimes.
In this area, Inswitch's Cross-Border Money Services offer lower remittance costs with competitive fees, making transactions more affordable for both businesses and users.
According to the Mastercard report, prepared in conjunction with Payments and Commerce Market Intelligence, 'unregistered flows that take place through informal channels are at least 50% greater than registered flows'.
By digitizing remittances, the goal is to increase oversight of these money flows, allowing governments to be more transparent and benefit from tax collection. "Authorities need to create and implement regulations that ensure proper monitoring of international transfers to keep the likelihood of detecting money laundering high. However, these regulations add transaction costs for the entities handling the funds, and these costs are usually passed on to users," says a study by the IDB.
An important part of this change is how well technology systems can work together across different places. Solutions like Fintech as a Service (FaaS) platforms allow businesses and users to process payments efficiently, following international rules and handling multiple currencies.
In Latin America, Inswitch has found that having reliable bank partners and the ability to make real-time cross-border payments has increased financial inclusion.
Remittances face regulatory challenges, but they're not slowing down
One of the big challenges is getting favorable regulations in place for these companies to operate and innovate.
In this context, Inswitch addresses these challenges by offering global regulatory compliance, supervision, and information to authorities. This ensures that all transactions adhere to strict local and international regulations, promoting operational security and building trust in every transaction.
With Inswitch's MSB licenses, businesses can operate in all 50 U.S. states, making secure payments through various methods. These licenses also make it easy to transfer money to any Latin American country, including key markets like Brazil, Mexico, and Central America, giving users more flexibility.
In any case, remittances continue to move strongly, driven by global flows of migrants and freelance workers who carry out their activities from regions like Latin America, many of them receiving their payments in hard currency to escape the depreciation phenomenon that has impacted local currencies, as has been the case with the Argentine peso or the Venezuelan bolívar.
In a world where remittances are crucial for millions of households in Latin America, tech solutions are playing a key role in modernizing this sector.
Inswitch's Cross-Border Money Services for fintech companies, retailers, e-commerce, banks, remittances, and more.
Choosing Inswitch's Cross-Border Money Services means accessing a comprehensive and advanced solution that redefines how businesses and users manage remittances. With MSB licenses that allow companies to operate in the U.S., global regulatory compliance, and a wide range of customizable payment methods, Inswitch not only ensures efficient and secure transactions but also enables its clients to stay at the forefront in a competitive and constantly evolving market. This service includes direct remittance processing through the most extensive payment network, with multiple payment options in the U.S., such as cards, ACH, wallets, and cash. Additionally, users have access to personalized accounts and cards within a complete financial solution, as well as digital wallet options.
Choosing Inswitch means opting for an optimized user experience, a significant reduction in transaction costs, and the necessary flexibility to adapt to the specific needs of each business. With advanced KYC, compliance, and monitoring capabilities, as well as white-label solutions, companies can offer a service fully tailored to their brand and operational needs. Additionally, Inswitch's business portal allows for easy and efficient product control, ensuring agile management. Whether through bulk payments, advanced fraud management tools, or API integrations that simplify complex processes, Inswitch is the strategic ally that drives the digitalization of remittances, strengthening both financial inclusion and global economic growth.
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