One of the underlying factors of starting Paylar is and always was the still-underdeveloped market of remittances. In simple words, remittances are money that emigrants send back to their families and friends in origin countries. Increased global labor mobility over the past three decades was closely followed by ever-growing amounts of remittances. According to the World Bank projections, in 2019 global remittances surpassed $700 billion including a record $554 billion sent to low and middle-income countries. And although those transfers are an important driver of developing economies for decades and even centuries, the problem of high remittance cost persists. Paylar, along with other EMis/PIs entered the remittance industry long-dominated by Western Union to fix this.
According to a recent study of the World Bank, remittances to countries in Europe and Central Asia remained strong in 2019, growing by about 6 percent to $65 billion in 2019. Ukraine remained the largest recipient of remittances in the region, receiving a record high of nearly $16 billion in 2019. Smaller remittance-dependent economies in the region, such as Kyrgyz Republic, Tajikistan, and Uzbekistan, particularly benefited from the rebound of economic activity in Russia. In 2020, remittances are estimated to fall by about 28 percent due to the combined effect of the global coronavirus pandemic and lower oil prices.
The average cost of sending $200 to the Europe and Central Asia region declined modestly to 6.48 percent in the first quarter of 2020 from 6.67 percent a year earlier, World Bank says. That is $13 for the $200 transfer. The differences in costs across corridors in the region are substantial; the highest costs for sending remittances were from Turkey to Bulgaria, while the lowest costs for sending remittances were from Russia to Azerbaijan.
Here at Paylar, we are preparing a scheme which will make international transfers one of the most attractive in the market. Stay tuned for some exciting updates.