Boost in Global Remittance Share by BRICS Nations: 193% Surge Identified
The BRICS bloc, a group of emerging economies that now includes Brazil, Russia, India, China, South Africa, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, is set to undergo significant changes in its remittance trends. Although concrete quantitative forecasts are limited, several contextual factors can be noted.
One of the key trends emerging within the expanded BRICS nations is a collective emphasis on strategic autonomy, regional cooperation, and financial innovations. For instance, Russia is increasingly utilizing cryptocurrencies like the A7A5 stablecoin to facilitate cross-border payments amid Western sanctions, signalling an attempt to bypass traditional dollar-dominated remittance corridors and potentially boosting intra-BRICS remittance flows through digital means.
Another notable trend is the dedollarization across BRICS countries, which could reshape how remittances are sent and received within the bloc. This shift could reduce reliance on the U.S. dollar and traditional western financial infrastructures, potentially expanding local and regional financial channels.
India, a major player in global remittances, is facing possible policy changes such as a 5% tax on remittances, which could influence the flow of funds and incentives for formal channel use.
Geopolitical shifts and the U.S.'s move towards bilateralism and reduced multilateralism could influence BRICS nations' remittance patterns, as countries in the bloc seek to strengthen South-South cooperation and regional trade ties, indirectly affecting labor migration and remittance flows between these countries.
In comparison, the United States remains the world’s largest remittance sender, driven by its large diaspora populations and strong economic base. However, recent U.S. foreign assistance reductions might affect economic conditions in key recipient countries, indirectly influencing remittance patterns.
The expanded BRICS bloc is expected to see remittance flows facilitated increasingly by digital currencies and less dependent on the U.S. dollar, reflecting broader geopolitical and economic shifts. However, the U.S. is expected to maintain its lead as the largest remittance sender, though evolving global financial architectures may gradually change the remittance landscape over the next few years.
According to the UN IOM World Migration Report, the growth in migration is a contributing factor to the growth in the global consumer-to-consumer payments market. The global consumer-to-consumer payments market is set to grow at a significant pace over the next few years, with a projected growth of 80% between 2023 and 2030.
The addition of the six new countries to the BRICS bloc has caused its share of global remittances to grow by 193% in 2023, accounting for 16.2% of all remittances sent in 2023. The BRICS bloc, now consisting of every one in six dollars sent in remittances, is an increasingly powerful contender in the remittance space. The core five BRICS countries are expected to account for 5.5% of all money sent as consumer remittances globally in 2023, but with the addition of new countries, this will increase to 16.2%.
The amount of consumer remittances sent from the new six BRICS countries is set to grow at a faster rate than that of the current five countries, with a growth of 11.3% between 2023 and 2025. The BRICS bloc's remittance send volume is expected to increase by 195% in 2025 compared to 2023, reaching $138.9bn. The current five BRICS countries will send $47.1bn in remittances in 2025, an increase from the $42.7bn in 2023.
The growth of the BRICS bloc in the remittance space provides renewed economic clout for the group on multiple metrics. The increase in the BRICS bloc's share of global remittances could lead to a shift in the geopolitical landscape of the remittance market. The continued expansion and increased size of the BRICS bloc make it a significant player in the remittance space, shaping remittance trends over the next few years.
- Amid this reshaping of the remittance market by the expanded BRICS bloc, understanding market sizing and finance becomes crucial for investors seeking to tap into this growing consumer-to-consumer payments market within the bloc, particularly in the context of increased use of digital currencies.
- As personal-finance involves a significant portion of remittances, businesses may find opportunities in this evolving landscape by offering cross-border payment solutions that cater to the needs of the expanding BRICS bloc, integrating regional financial channels and digital currencies to dismiss reliance on traditional Western institutions.
