According to recent studies, the global remittance business is $500+ billion strong and many stakeholders are involved in proper money transfer system business including banks, money transfer operators and every third party players like mobile operators.
Now current trend is being witnessed in this area is lowering of remittance costs for the end consumer, from 15% to 8% and also with plans to cut the cost remittance to around 5%. Vietnam retained the 9th position among top 10 remittance-earning countries in the world. Also, Vietnam stands as one of the largest remittance recipients in the world. Remittance market in Vietnam is growing at a steady pace.
Remittance plays a very significant role to the economic growth of Vietnam. Remittance in Vietnam has two groups: Remittances to support relatives in Vietnam and remittances to pays debts build houses or buy property in Vietnam.
One of the major challenges of Vietnam’s banking which consists of a crowded network of banks and nonbank institutions in just 23 years. Right now there are commercial banks, 34 joint-stock commercial banks, four JVBs, five foreign banks, 100 foreign bank branched and its office in, now you can understand that remittance market in Vietnam is driven by large banking players.
With these statistics we can understand about the competition exists between these because of many players in the market. Even though inward remittances are eased but still outward remittance is still fairly restrictive.
The Vietnamese-Australia remittance corridor has a fluctuating dominance of formal and informal remittance methods. Another major challenge that is faced by these two is the majority of the labors, migrants are covered in European and also some percent in Australia.
A Large percentage of respondent depends on Hundi agents or hawala agents as their primary means of remitting to their countries to transfer money. These agents still retain a monopoly of Vietnamese-Australian corridor in means of transferring money overseas. Because of most these labors are having various semi-skilled and mostly unskilled workers are not able to use formal means of transferring money like banks cheques, foreign exchanges, and money remittance services like InstaRem, Trasferwise, Western Union etc.,
Formal Services still need to compete with these Hundi operators who cover a large service coverage area. It can also a fall of a structural shortfall of financial services within Vietnamese- Australian Corridor.
Another challenge which comes after this is most of the immigrants are still known less about money ending challenges. The governments have formalized the policy ambition; reduce the cost of many remittance channels even services like InstaReM is offering fee fewer services till 500 AUD with just 1.03 exchange rate. Still the workers, migrants need to know about these services, banking services and much more.
Remitters from Vietnam to Australia or vice-versa are predominantly of similar origin with particular remittance habits that are highly influenced by ethnicity also because of policies, lack proper relationship between formal operators and remitters.
Conclusion:
Vietnam is one of the largest remittance recipients in the world. Nonetheless, there are many challenges needs to be addressed if remittances, migration and are to be effectively harnessed for improvement. Send money to Vietnam from Australia with Instarem to skip such challenges and get a safe money transfer done.
