Digital dominates for Aussies making overseas remittances

Remittance payments Visa

Digital or app-based payments are preferred by a significant majority of remittance payers in Australia, according to a new report by credit card and payments giant Visa.

More than two-thirds (67 per cent) of Australians now use digital apps to send their money overseas, with the US (23 per cent) and the UK (21 per cent) the preferred destination for these payments, figures from Visa’s Money Travels: 2024 Digital Remittance Adoption report reveal.

Australians’ preference for digital apps was overwhelming attributed to their safety and ease of use, with digital transfers rated as the most secure method for both sending and receiving remittance payments.

Sending money by cheque or cash were perceived by Australians as the least secure methods of transfer, particularly when sent via mail or courier.

However, drip pricing in traditional methods and the increased transparency of app-based payment methods may be another factor swinging Australians’ preferences. One-third of surveyed Australians said they have been offered a free transfer when sending cash, cheques or money orders, only to find out there were hidden fees, Visa revealed in its report.

However, the data shows that Australia still trails India (76.5 per cent), the Philippines (75 per cent), China (71 per cent), and Singapore (70 per cent) in the adoption of app-based payment methods to send/receive money internationally.

Curiously, respondents in China believe that receiving a cheque in the mail/money order is the safest way to send money (40 per cent), which was perceived to be safer than cash due to their traceability and the ability to replace the money order if it goes missing.

Australians cited humanitarian aid (49 per cent), special occasions (32 per cent), and unexpected needs (31 per cent) as their top reasons for sending money overseas.

Payers sending money to themselves from their own accounts or investments also accounted for around one in five (19 per cent) of remittance payments made by Australians.

Overall, nearly half (47 per cent) of the 5,000 surveyed Australian respondents reported sending money abroad last year.

However, Australians appear to be feeling the pinch of hip pocket pressures, with only 27 per cent of respondents stating they would send money abroad in the next 12 months.

On the receiving end for Aussies, Singapore respondents have an active role in cross-border transactions to Australia (13%), the third-most common destination for remittance payments, after China (18 per cent) and Malaysia (11 per cent). For Indian payers, Australia (17 per cent) was the second most common destination for remittance payments, below the US (31 per cent), but above Canada (16 per cent) and the UK (14 per cent).

“Remittances act as a lifeline for many families in countries on every continent,” Visa wrote in its report, with remittances to low- and middle-income countries growing at an estimated 3.8 per cent over the past year, reaching $669 billion in 2023.

Commenting on Australians’ preference for digital remittances, Ben Adams, head of commercial and money movement solutions at Visa Australia, New Zealand and South Pacific, noted local users’ proclivity for early tech adoption in payments, no doubt also spurred by the success of domestic digital payments rails.

“In Australia, we’ve already got fast, seamless digital ways to pay when we’re shopping in-store or online,” he said.

Adams added, however, that “when it comes to sending or receiving money internationally, there is still opportunity to simplify the process and make secure, digital, global remittances.”