Growth & Jobs | Digitalisation of remittances yields positive results for unbanked, underbanked

HORACE HINES, general manager of JN Money Services (JNMS), owners and operators of the JN Money remittance brand, says digitalisation has positively changed the remittance experience over the last five years.

“Remittance customers have been demanding greater convenience and flexibility; and as persons become more tech-savvy, we find that more customers are willing to originate transactions via their mobile phones, or any other computer device. Therefore, we have seen a gradual shift on the originating side, with transactions being more digital,” he pointed out.

He added that digital transactions have accelerated over the last two years, since the COVID-19 pandemic, and players in the market have noticed an increase in online remittance transactions across the Caribbean region, as persons opt to limit physical interactions.

“Most times, persons would walk to a counter and cash or process their transactions. Now we are seeing the emergence of digital-only remittance companies; and we have also seen an uptick in persons who are willing to transact digitally, by using the online platforms or mobile apps of the leading remittance companies, such as JN Money,” he pointed out.

“Three years ago, JN Money implemented JN Money Online to facilitate persons who wanted the convenience to ‘transact on the go’. Therefore, persons can send money online from overseas, or from the comfort of wherever they are,” he related.

“On the receiving end, there is also a further drive to have persons receive their funds by mobile wallet, bank account or prepaid card. We have seen major shifts in the marketplace, where all the remittance players have started to offer some ‘direct-to-bank transactions’,” Hines explained.

He also shared that for JNMS, a significant percentage of its transactions are delivered digitally; therefore, it either goes to a bank account or to one of the company’s money transfer cards.

Hines opined that receivers demanding the ability to collect cash, whether it goes to a bank account or the money card, have garnered several benefits from receiving cash digitally.

“For one, security, as they have greater control over their funds; therefore, they do not walk with a lot of cash. Two, they have greater convenience; hence they can use these instruments, whether it is their bank debit card or prepaid card, at point of sale at merchants; or they can use them incrementally at ATMs to withdraw cash as required. Consequently, we are also experiencing greater demand on the receivers’ side for that,” he stated.

He added that the digital remittance transactions assist receivers to better manage funds and reduce impulsive spending.

“The more persons who receive money digitally, the less cash the money carriers need to move around. The less cash we have moving around, the better it is security-wise,” he continued.

The remittance expert said that digitalisation of remittances also allows money to stay longer in the formal system.

Hines noted that digitalisation of remittances has helped the unbanked and underbanked to set up bank accounts.

“In conjunction with the recent changes in the banking system, there are lower-level requirements for opening a bank account, which now opens the avenue for the average remittance receiver to establish a bank account; and that helps to develop a culture to save, which would reduce dependence solely on remittances,” he informed.

He also pointed out that the digital remittance innovations further improve digital adoption in Jamaica, now that many recipients can do cash-intensive transactions online, such as paying bills, making purchases, and saving.