In today’s global economy, remittances play a pivotal role in connecting families, supporting businesses, and fostering economic growth. According to Juniper Research, global remittance transaction values are projected to reach $6.5 trillion by 2028, with key corridors between the U.S., India, Europe, and Africa driving significant flows.
Yet, remittance providers face mounting challenges—ranging from regulatory compliance to fraud prevention, from settlement delays to customer experience pressures. Traditional payment systems, including SWIFT-based transfers and in-person cash remittances, often struggle to deliver speed, security, and convenience simultaneously.
Enter open banking. By enabling secure data sharing, account-to-account (A2A) payments, and streamlined compliance, open banking is transforming how money moves across borders. This article explores six ways open banking enhances the remittance process, creating faster, safer, and more transparent financial flows for providers and end-users alike.
In today’s global economy, remittances play a pivotal role in connecting families, supporting businesses, and fostering economic growth. According to Juniper Research, global remittance transaction values are projected to reach $6.5 trillion by 2028, with key corridors between the U.S., India, Europe, and Africa driving significant flows.
Yet, remittance providers face mounting challenges—ranging from regulatory compliance to fraud prevention, from settlement delays to customer experience pressures. Traditional payment systems, including SWIFT-based transfers and in-person cash remittances, often struggle to deliver speed, security, and convenience simultaneously.
Enter open banking. By enabling secure data sharing, account-to-account (A2A) payments, and streamlined compliance, open banking is transforming how money moves across borders. This article explores six ways open banking enhances the remittance process, creating faster, safer, and more transparent financial flows for providers and end-users alike.
Open banking refers to the practice of allowing third-party providers secure access to bank data and payment infrastructure through application programming interfaces (APIs). This model enables financial services to innovate faster, reduce friction in payments, and enhance compliance.
Globally, open banking adoption has been driven by regulations such as:
In remittances, open banking allows providers to authenticate accounts, verify ownership, and process payments directly between banks, reducing dependency on intermediaries and minimizing settlement delays. For consumers, this translates into faster, lower-cost, and more secure cross-border transfers.
Remittances are more than personal transfers—they form a backbone of economic support for many countries. In 2024, global transaction values for cross-border remittances are estimated at $3.9 trillion, increasing to $6.5 trillion by 2028.
Key trends include:
However, remittance providers face five persistent challenges:
Open banking offers practical solutions to address these challenges while keeping providers compliant with international standards such as FATF recommendations, AMLD6, and local regulatory authorities like FCA and MAS.
Traditional remittances often rely on multi-step bank transfers, intermediaries, and legacy systems like SWIFT, which introduce delays and increase costs. Open banking facilitates account-to-account (A2A) transfers via APIs, enabling near-instant settlements.
Open banking enables robust fraud prevention through real-time verification of accounts and transaction patterns. Providers can access:
Strong Customer Authentication (SCA) often requires multiple verification steps, causing friction for users. Open banking streamlines authentication by:
Remittance providers operate in highly regulated environments. Open banking enables real-time KYC and KYB validation, helping providers:
Open banking opens access for underbanked and underserved populations, offering secure digital payment options without requiring traditional accounts.
Embedded finance allows fintechs and remittance providers to integrate payments directly into digital services like:
Through open banking APIs, providers can create white-label solutions that combine payments, verification, and compliance in one seamless workflow. This enables businesses to innovate rapidly and meet evolving consumer expectations.
Open banking adoption is accelerating globally, supported by:
The future promises:
Software providers like RemitSo enable API-driven solutions for remittance providers, helping them leverage open banking infrastructure while remaining compliant and scalable.
Open banking is reshaping the remittance landscape by addressing long-standing pain points in speed, security, compliance, and customer experience. For providers, it offers operational efficiencies, lower costs, and enhanced compliance with global regulations. For consumers, it ensures fast, transparent, and secure cross-border payments.
As open banking matures and regulatory frameworks evolve, providers that adopt API-driven, compliant, and customer-centric solutions will be best positioned to capture the growth in the global remittance market, projected to reach $6.5 trillion by 2028.
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Open banking allows secure data sharing and account access through APIs, enabling faster, cheaper, and more transparent cross-border payments.
By enabling direct account-to-account transfers, it reduces intermediaries and fees, while streamlining settlement processes.
Yes. Open banking integrates verified account details, fraud detection, and compliance with FATF and AML regulations.
Providers can validate customer identities in real-time, monitor transactions, and maintain regulatory reporting with minimal manual intervention.
Absolutely. Simplified authentication, faster transfers, and transparent fees enhance customer satisfaction and retention.
Yes. It enables access to secure remittance channels for underbanked populations and remote regions, promoting transparency and trust.
APIs allow integration with wallets, payroll systems, and digital platforms, enabling providers to offer embedded financial services and white-label solutions.
Key frameworks include PSD2 (EU), UK Open Banking, MAS API frameworks, FATF guidelines, AMLD6, and local regulatory requirements in each jurisdiction.
