Mobile money transfers services such as MPesa have changed the landscape for domestic
remittances in many African countries. MPesa is a mobile phone based money transfer service for
Safaricom which is Kenya’s largest mobile network operator. With the help of this facility, low
income people of Kenya can use their mobile phones for transferring their money from person to
person. Also, mobile transfer operators have partnered with mobile wallet providers and mobile
network trade associations so as to boost their competitive advantage.
Another factor having a positive impact on remittance market is public sector initiatives so as to
reduce the cost of remittance. The Federal Reserve Bank of the U.S in partnership with Banco
Rendimento, Banco de Mexico and Microfinance International Corp. offered an “account to
receiver” service. This service helps the customers in the U.S to send money to their relatives who
do not possess a bank account in Mexico and other 10 Latin American countries. Remittance
industry contributes to economic growth and livelihoods of people across the world. The money
transferred by the foreign migrants to their home countries is expected to contribute as the second
largest financial inflow to the respective nations. It acts as a key source of funds in emerging
countries, far beyond official development support and even foreign direct investment and, are
proven to be more secure than private debt and portfolio equity flows. Furthermore, in money
receiving countries, this industry promotes economic dependence on the global economy instead of
building defensible local economies.
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Remittance channel comprises of sender, receiver, intermediates in both the countries and payment
interface used by the intermediates. The market on the basis of components, is segmented into
remittance corridors, remittance service providers, money transfer system and, remittance
network. On the basis of ways, a network of access points is created or connected, market is
segmented into franchised services, unilateral services, open services and negotiated services.
According to the World Bank data, in 2013, over 38% of international migrants migrated from
developing countries to other developing countries and around 34% moved from developing