Tracking the Flow of Cross-Border Payments Around the World

(Bloomberg) — The flow of money across borders is quickly growing, often changing and impossible to fully track.

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The best guess comes from the World Bank, which estimates that about $630 billion was sent in remittances to low- and middle-income nations in 2022, roughly equaling foreign direct investment in those countries. The sum represents a rise of almost 5%, with economies rebounding from Covid-19 and overseas workers — along with a rising number of refugees — sending more money home.

In recent years, digital payment channels have helped to make certain global money flows more visible. TerraPay, a London-based mobile payments provider, runs infrastructure for partners including MoneyGram, Western Union, and Visa, and covers thousands of corridors across more than 200 countries.

The company’s numbers suggest India is the biggest recipient of money from overseas. As the chart shows, money is flowing from Qatar, Saudi Arabia, Australia, and the US. This echoes World Bank estimates, as well as UN data, which shows 18 million Indians living outside their country of birth — the biggest diaspora in the world. In 2022, India hit a record $100 billion in remittances, marking a 12% rise year on year. This is partly due to trends around the pandemic. Across the Gulf region where many Indians have moved, vaccinations and the resumption of travel meant migrants could go back to work. The benefits of higher oil prices also helped overseas workers send more money to their families. Highly-skilled Indian migrants from the US, UK and Australia were also sending more money home, helped by job support programs during Covid-19 restrictions. Indian migrants may have also taken advantage of the depreciation of the rupee against the US dollar, according to the World Bank.

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The Philippines is also one of the ten biggest receivers of overseas cash in TerraPay’s data. This is a feature of a large number of expats living in the US, census data shows, as well as the popularity of digital banking. In 2019 more than 70% of the population in the Philippines did not have bank accounts, allowing mobile wallets to rapidly become the preferred payment method.

“Financial inclusion is bringing more people into the banking fold. And that’s why these numbers are going up. Our competition really is cash,” said Ambar Sur, chief executive officer of TerraPay.

The worldwide growth in digital payments has also increased competition among remittance services. The shift has “facilitated cheaper and more efficient international remittance payments for foreign workers to send money home,” according to World Bank senior economist Leora Klapper. “For example, workers can send money from their mobile banking outside of traditional banking hours and from their home, without traveling to a bank or money transfer service.” This has consequences for low-income families’ ability to pay for basic needs like access to food, basic medical care, education, and housing, she added.

TerraPay suspended payments through Russia in 2022 and is relatively new to Latin America and China, so these areas are likely underrepresented in this data.

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