The US remittance industry is growing – so where are the big banks? – Spacer sheet

The United States is the most popular destination for the world’s migrants, who leave their countries of origin in the hope of a better future. It is home to 19% of the world’s total migrant population. In 2020, the United States registered 27 million foreign-born workers, which represented 17% of the total workforce. These workers send some $ 165 billion overseas. Yet among the financial institutions that handle these transactions, one important group is missing: the major US banks.

In many cases, the workers arriving on America’s shores are from middle- or low-income countries, and the money they earn there supports their families at home – often supporting multiple households. With the advent of the Covid-19 pandemic and the resulting economic hardships, the World Bank predicted the biggest drop in global remittances in recent history. As things unfolded, however, global remittances defied projections, falling only 1.6% to $ 540 billion by the end of the year. In 2021, the flow has continued to rise and remittances to low- and middle-income countries alone are expected to have increased by 7.3%, reaching $ 589 billion.

According to the World Bank, 2022 is expected to see growth in remittances of 4.4%, mainly due to weaker growth prospects for the United States.

In 2021, the top three destinations for remittances were India, China and Mexico. For each of these three countries, the United States was the primary source of remittances. Even beyond that, the United States is the largest source country for remittances around the world. With the United States playing such an important role in the global remittance market and the big banks notably absent from the scene, who is fueling that market?

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