Over the last decade, citizens worldwide have experienced rapid advancements in payment technology. From the Google Wallet in 2011 to country-specific solutions like UPI in India or Pix in Brazil, many immigrants are familiar with digital money transfers.

WorldBank released a survey in 2022 stating that two-thirds of adults across the globe have used contactless payments. In other words, digital payments are common at home and abroad for most migrants. In particular, those on student, work, or family visas are more likely to be aware of these solutions, given the strict immigration requirements in countries like the USA.

Undocumented immigrants, which make up only 3.5% of the U.S. population may initially struggle to obtain the capital or financial services to tap into digital payments. However, with a U.S. address and bank account, it is not impossible. As a last resort, these migrants may rely on friends and family to send remittances to their home country.

Given the ubiquity of digital payments, the question becomes how to best apply digital transfers to remittances and cross-border payments for a growing population.

The Current Population Survey (CPS) by the Bureau of Labor Statistics reports that almost 27% of the U.S. population is made up of immigrants and their U.S.-born children, which accounts for almost 87.7 million people. As such, it’s no surprise that the U.S. is the largest source of international remittances in the world, sending over $79 billion in remittances in 2022 alone. Despite the growing adoption for digital transfers within remittance payments, however, digital financial services may not be as widely available or accessible across payment senders and receivers, which impacts the preferred send and receive methods amongst varying populations.

For example, while digital payment options are common in India’s urban centers, only 3-7% of rural residents have used them. In countries like Kenya and Tanzania that lack traditional banking infrastructure in rural areas, mobile payments have skyrocketed. As a result of this inconsistency, a modern remittance solution requires a flexible and customer-centric approach to money transfers.

We understand digital transactions play an important but incomplete part of the process. To find out more about the transition to a digital money movement, we explored the current payment trends taking place across America, the impact this is having on remittances in the U.S., and what can be done to ensure no one is left behind. We also set out to gain a deeper understanding of the state of digital money transactions in some of the most digitally-advanced countries across the globe and how this differs from communities on the receiving end of remittance transfers.

Finally, we explore whether you are ready for a digital-first economy. We offer advice on some of the best ways to prepare for a digital-first economy, especially for those of you navigating the challenges that come with sending money abroad in the digital age.

What’s in this article?

What are the preferred payment methods in the U.S.?
What does the future of remittances look like?
Is your country ready to embrace a digital-first economy?
Is your business ready for a digital-first economy?
Are you ready?

What are the preferred payment methods in the U.S. and abroad?

To begin, we explored some of the most popular payment methods used by citizens worldwide and in the USA in order to gain a better picture of the adoption of digital payment methods. We then examined whether the shift towards digital payments translates to the immigrant population, looking specifically at remittance transfers.

Two-thirds of adults worldwide have used digital payments at least once.
Payment cards are the preferred payment method in the U.S.
Does the digital payments trend translate to the immigrant population in the U.S.?

Two-thirds of worldwide are comfortable relying predominantly on digital payments

A WorldBank study found that two-thirds of adults worldwide have used digital payments at least once. And this is no different in the United States.We conducted a survey of 2,000 Americans, of which 10% were not born in the U.S., and asked them about their attitudes toward digital payments. Out of the U.S. adults surveyed, a large majority (79%) say they would feel comfortable living in a ‘cashless’ society, relying mostly on digital payment methods as opposed to physical notes and coins.

Credit and debit cards are the preferred payment method in the U.S., and payment apps are becoming increasingly popular

Recent data reveals that the most commonly used payment method in the U.S. is payment cards, with more than 80% of the population owning at least one credit card and the average American owning 3.84 credit cards.

There are several reasons why the majority of day-to-day transactions are currently made using payment cards. Firstly, credit and debit cards have been around for a long time, with the emergence of the first debit card reported to be as early as 1978 (or some claiming as early as 1966!). And in comparison to e-wallets with contactless functionalities, debit and credit cards are more accessible, especially as they do not require an internet connection or smart devices to function.

Similarly, credit and debit cards are more widely accepted in-store and online and 67% of retailers offering contactless payment options. However, this could potentially change in coming years, as we’ve seen a significant rise in the demand for contactless payment options, up by 27% from 2019.

Despite payment apps growing in popularity, the reality is that they may not yet be used for in-store payments. Let’s take Apple Pay as an example, the most popular payment app in the U.S. It is reported that 93.9% of consumers who have Apple Pay activated on their iPhones, in fact do not use the app to make in-store purchases. However, that’s not to say mobile payment apps are not gaining popularity in the U.S. In fact, the total debit transactions by mobile wallets increased from 1.3 billion to 2 billion between 2019 and 2020 alone. E-wallets are most popular among Gen Z and Millennials, and are forecasted to rise in popularity in coming years, gaining around 6.5 million new mobile wallet users per year from 2021 to 2025.

Some key benefits of mobile payment apps include easy tap-and-pay functionalities, instant peer-to-peer transactions, and security features that keep your money safe, like fingerprint access and encrypted transmissions. There are a number of different mobile payment applications available, such as Apple Pay, Google Pay, Venmo, Samsung Pay, and Cash App.

This trend extends far beyond the U.S. borders. Since 2018, India’s digital payment volume rate has skyrocketed, averaging a 50% increase per year. In Mexico, only 27% of consumers have bank accounts, but digital payments are becoming a popular alternative to payment cards. And 94% of Mexicans with bank accounts have leveraged some form of digital banking. Likewise, in China, 85% of internet users have adopted mobile payments. Further, Kenya and Ghana are developing the appropriate infrastructure and relevant policy frameworks to deliver a sophisticated electronic-payments system.

In other words, while payment cards continue to remain a popular payment option, digital payments are catching up fast.

Does the digital payments trend translate to the immigrant population in the U.S.?

In order to access digital payments, you typically require access to a bank account and internet connection and own a digital device. While these may all seem straightforward to some, it may not be the case for all. For instance, opening a bank account may seem simple, but if you do not speak English, are new to the U,S., or are undocumented, you may run into a few challenges along the way. As such, immigrant communities may be more reluctant to adopt digital transactions as a primary payment solution.

The Consumer Financial Protection Bureau reports that immigrant communities currently face a number of challenges which act as barriers to accessing ‘fair and affordable’ financial services. These barriers include the following:

Access to banking services - many financial institutions in the U.S. have policies that exclude some immigrants from accessing their banking services due to their immigrant status, even those with good credit scores and a valid Social Security number or ITIN.
Limited proficiency in the English language - over 5.2 million households in the U.S. have limited proficiency in the English language, which may have an impact on their ability to communicate effectively and interact with financial institutions, such as reading terms and conditions, or completing applications.
Vulnerability to predatory service providers - due to the lack of access to mainstream financial services, many immigrants are forced to find alternative methods. This leaves them more susceptible to using costly or predatory service providers that charge exorbitant fees and can mislead consumers.
Lack of credit history - immigrants who have recently moved to the U.S. may lack a credit history or not have an understanding of how credit works, which could have an impact on their likelihood of opening a bank account, owning a credit card, or using other forms of digital payments.

So, although the majority of Americans are ready to embrace a digital-first society, and many actually preferring digital payment methods, there is also a large proportion of people across the world who still rely on cash and do not currently use digital payment methods.

Remitly provides digital financial services to immigrants and their families in over 170 countries and territories around the world. We offer international remittances that give the option to send money digitally using a Visa debit card as well as a host of other convenient options. Depending on the location of the recipient, our users can leverage cash pickup delivery method options and in select countries, home delivery for international money transfers, in addition to digital delivery methods, such as deposits to a bank account or mobile wallet.

What does the future of remittances look like?

International remittances, which involve sending or receiving money from one country to another, have increased throughout 2022 with global remittances increasing by 5%. for example.

However, making international remittances can come with its challenges, predominantly processing times, high costs, and security risks. Digital payments and remittance services are crucial for sending money across seas quickly, affordably, and safely, particularly in helping migrants send money to their country of origin. In fact, The World Bank reports that remittances have grown to approximately $626 billion to low and mid-income countries in 2022, up from $597 billion in 2021.

Over the years, digital remittances have undergone a remarkable transformation, leveraging advancements in technology and changing consumer preferences. Initially, digital remittances were limited to basic online money transfers through established financial institutions, yet with the rise of mobile banking, e-wallets, and fintech solutions, the landscape has expanded exponentially. Let’s take a closer look at how the evolution of digital remittances has impacted the immigrant population.

What does digital remittance offer the immigrant population?
Why are cash transfers still important among the immigrant population?
What type of experience do remittance users in the U.S. want from remittance providers?

What does digital remittance offer the immigrant population?

Visa reports that digital payments are becoming more popular among remittance users and the adoption of app-based digital payments is growing. Approximately 61% of U.S. remittance users send money using digital transfer methods, and 60% receive using these methods, too.

Ruben Salazar Genovez, Global Head of Visa Direct comments:“Fast, easy and secure payments can make a profound difference to families, communities and economies around the world. This new research shows incredible acceleration of digital payments, but there is still more the industry can do to bring streamlined remittances within reach for more migrant workers and their families who rely on these lifeline payments to do everything from pay for food, education, or even unforeseen medical costs.”

Digital remittances offer greater financial inclusion, reaching underserved populations with limited access to traditional banking services. A digital transfer solution also fosters a sense of financial literacy and empowerment, and provides new ways for global financial connectivity. It is able to provide near-instantaneous money transfers, enabling individuals to send and receive funds in real-time and help meet urgent financial needs. It also provides the convenience of 24/7 accessibility and allows individuals to initiate transactions from the comfort of their own homes, eliminating the need to queue at the bank.

Why are money transfers still important among the immigrant population?

Despite advances in digital methods for sending money internationally, remittances are still one of the most fragmented sectors in the financial services industry. And although the adoption of digital remittances in the U.S. is high, Visa’s survey reveals that U.S. remittance users still prefer cash, checks, and money orders to send/receive money internationally, more than most other countries in the same study due to customer preferences for receiving money and other reasons.

There are numerous reasons why remittance users prefer sending money internationally via cash, checks, or money orders as opposed to digital options. These include:

Cultural norms - immigrants may be accustomed to using cash and prefer the tangible nature of physical money, as it provides a sense of control and familiarity.
Accessibility- cash can be more accessible to those who do not have access to formal banking services or identification documents required for digital transactions.
Privacy - cash does not leave a digital trail, which is beneficial for individuals who prefer financial privacy.
Trust- some immigrants have limited trust in financial institutions and digital payment methods, especially if they have previous negative experiences with unstable financial systems, fraud, or theft.

While digital payment methods are gaining popularity, cash transactions still have their place and play a role for many immigrants in the U.S., providing them with a familiar, accessible, and trusted means of making international money transfers.

What type of experience do remittance users in the U.S. want from remittance providers?

Visa’s survey highlights that remittance preferences vary across the globe. Americans who sent money internationally but have not used a digital payment method cited security concerns despite only 7% having experienced these issues.. Surprisingly, security was also considered a key benefit of app-based digital payments, suggesting that security is deemed a benefit but also a worry in relation to digital payments. On the other hand, when it comes to physical money transfers, the main concerns are high fees, speed of transaction, and convenience.

Meanwhile, in the Philippines and Singapore, 70-80% of remittance users have adopted app-based digital payments, mainly due to its ease of use for frequent transfers. Security, transparency, and convenience are reasons for the shift to digital remittances.

Ultimately, money remittance is personal, and so is the way individuals choose to send remittances. Remittance preferences can vary greatly depending on an individual’s circumstances, cultural background, financial literacy, and access to financial services. That’s why one of the most important aspects of remittance services, for both senders and receivers, is choice!

That’s why Remitly offers a fast, easy, and reliable solution across a variety of delivery methods, from mobile wallets to cash pickups, depending on your recipient’s location. Our transfers include multiple levels of security designed to keep your money safe, and we promise to deliver on time to ensure your funds are there when your loved ones need them. Your transfer arrives on time or we’ll refund your fees.

Is your country ready to embrace a digital-first economy?

An increasing number of countries are embracing digital payment methods as opposed to using cash. For some countries, this means being well on their way to establishing a digital-first economy in the near future and potentially ceasing the use of physical tender altogether. But which countries are leading the way and are ready to embrace a digital-first economy?

Which countries are closest to establishing a digital-first economy?
How are countries adapting to make way for more digital-first payments?
How are countries that receive U.S. remittances adopting digital payments?
Why are so many countries moving towards digital payments?

Which European countries are closest to establishing a digital-first economy?

Recent reports from experts in payment processing, Merchant Machine, reveal the top ten countries that are the closest to eliminating almost all cash payments and moving towards alternative digital payment methods. All ten of the countries listed have less than 5% of cash-based payments and are well on their way to becoming digital-first economies.

Merchant Machine’s leaderboard was calculated by creating an index based on:

The number of people with internet access
The number of payment card owners
The number of ATMs per 100,000 adults
The proportion of cash-based payments still being used
The percentage of unbanked individuals within the population

Norway predicted to be the first ‘cashless’ country in the world

At the top of the leaderboard, we have Norway. According to surveys by the Central Bank of Norway, Norges Bank, less than 4% of total spending in the country is made using cash, which is much lower than pre-COVID pandemic.

Executive Director for Monetary Policy at Norges Bank, Ida Wolden Bache says:

“An increasing number of smartphone apps can be used to make payments in shops. Online shopping is growing, and payment is increasingly made via smartphone apps and other digital wallets.”

Additionally, GlobalData reveals that the increasing value of the cards and electronic payments market in Norway is greatly down to the BankAxept domestic debit card scheme. It can also be attributed to the high proportion of the population owning a bank account, as well as the growing number of digital-first banks. In fact, as a result, 98% of Norwegians own a debit card, and each individual holds an average of 2.4 payment cards.

Wolden Bache discusses the risk of some users being “locked in” as the range of payment options becomes more limited with time. However, Wolden Bache reassures that Norges Bank will focus greatly on creating interoperability across different systems to prevent this from happening. This means that different banking systems and mobile apps will be able to integrate if required.

Following Norway on the leaderboard, we have Finland, New Zealand, Hong Kong, Sweden, Denmark, Switzerland, the UK, Singapore, and the Netherlands.

How are countries adapting to make way for more digital-first payments?

Here is a breakdown of some of the different ways countries are adapting to digital-first payments

An increase in banked individuals

Dan Sanford, Senior Vice President, Corporate Strategy and Development at Visa reports that debit card payments have been growing rapidly throughout the pandemic and beyond. Some key reasons for this shift have included hygiene concerns about cash (to prevent surface transmission of COVID-19) and the growing popularity of tap-to-pay.

For instance, in the fifth most digitally advanced country in the EU, Sweden, almost the entire population (almost 100%) is banked. There are also just 28 ATMs per 100,000 people in the country, which means cash is less readily available and cards are the go-to choice when shopping online and in-store.

All ten countries on our leaderboard have an unbanked population at or below 5%, with many under 1%, including Norway, Finland, Sweden, Denmark, and the Netherlands.

The rise of contactless payments

Contactless payment systems allow people to pay by simply tapping their credit cards, debit cards, smartphones, and other similar devices. In the U.S. alone, there are over 300 million Visa contactless cards, and are similarly popular in many places around the world, especially in the Nordic region. For example, in Norway, an astounding 87% of card payments are contactless.

Visa reports a 150% increase in contactless payments from 2019 to 2020 in the U.S. Among merchants who accept payments at the POS, 48% of the survey respondents currently offer contactless and surveys from Mastercard reveal that this trend will continue, with 74% of respondents stating they will continue to use contactless post-pandemic.

In Norway, the preferred payment method is mobile apps, with more than 95% of the population using payment apps. And a further 80% of all personal money transfers are being made using mobile apps, too.

However, contactless payments include more than credit cards, debit cards, and mobile apps. The Netherlands is leading the way when it comes to smartwatch payments. Statista data reveals that smartwatches are the preferred payment method for Gen Z and Millennials in particular, over other methods, such as cash, card, or mobile phones.

Improvements to digital infrastructure

In addition to more shops accepting contactless payments, countries have begun modernizing their infrastructure to allow for more digital-first payments. A prime example of this is the transportation sector, specifically railway networks.

In the Netherlands, NS Railway Operators have planned a trial that allows passengers to tap in and out of train barriers using contactless debit or credit cards, mobile apps or smartwatches. However, this technology is nothing new. For instance, this concept is already in use in the UK, with Transport For London having implemented this in 2012. It proved very successful with an average of 2.5 million contactless journeys now made across London’s bus, Tube, and rail services every day - while still offering travelers the option to pay using physical cash as well.

These steps are just the beginning for many countries looking to digitalize payments across their infrastructure.

How are countries that receive U.S. remittances adopting digital payments?

The migrants in the United States send more remittances than in any other country. But there are some overall trends for countries that receive the most remittances. The top 10 are:

India
Mexico
China
Philippines
Egypt
Pakistan
France
Bangladesh
Nigeria
Vietnam

Both India and Mexico have seen significant headway in the adoption of digital payments, but their unbanked and rural populations still lag behind. China leads with the adoption of digital payments, with its first digital payment platform, AliPay, having been released in 2003. In addition, 86.2% of respondents in the World Bank's Global Financial Inclusion Database had received or sent a digital payment. Likewise, 88% of Egyptians reported using emerging payments in 2021, including digital wallets and money transfer apps. And Nigeria is not only the leader of digital payments in Africa, but the government aims to digitize its economy.

While many of these countries struggle with significant unbanked populations and rural banking infrastructure, digital money transfers are rapidly becoming a staple payment method in urban centers.

Why are so many countries moving towards digital payments?

So, now we have an understanding of how these countries are making the transition to digital payments. But the real question is, why are these countries choosing to make the move?

Money safety
Physical cash is very easy to misplace, even when kept in a purse or wallet. Cash can also quite easily be stolen. The main problem with this is that cash is hard to trace and is unlikely to be recovered if lost or stolen.

On the other hand, digital payments are all recorded and leave a digital paper trail. They also use safety measures like encryption and biosecurity features to keep your money safe, such as fingerprint verification and facial recognition. This means that it could be less likely to be lost or stolen in the first place, and in the unfortunate case that it is, you can trace your money and get it back more easily.

The same goes for card payments, which can be traced back to the online and in-store shops they were used in, as well as the ATMs used to withdraw cash. And if your card is stolen, you are able to report this to your bank and freeze your card, order a replacement card, and in many cases claim your money back.

Limit fraud and crime

In addition to the safety measures in place, the details required to open a bank account, set up a mobile payment app, or use a third-party money transfer tool can also help improve safety and limit fraudulent activity. Typically, this will include proof of identity, full name, date of birth, and home address. This makes it more difficult to use someone else’s credit card unless you have all their details.

There are many instances where less cash leads to less crime. One study in Missouri found that the state crime rate dropped by 9.8% when it switched traditional cash welfare benefits with Electronic Benefit Transfer (EBT) cards. One of the driving factors for this was the reduction in cash-fueled illicit action on the streets, such as drugs, alcohol, burglary, and larceny.

Digital payments can also limit tax fraud. Cash-in-hand payments are one of the most common ways businesses avoid tax payments. Tax avoidance is a serious crime - legally and morally - and can cost the economy billions. In some of the worst cases, like the UK, HM Revenue and Customs report that tax avoidance, non-payment, and fraud have cost the country £35 billion - equivalent to $43 billion (utitlizing the December 31 2022 exchange rate)!

Convenience

Generally, cash payments require a lot more effort than digital payments since, for digital payments, you no longer have the need to go to an ATM to withdraw money or carry around bulky notes and coins on your person. Credit and debit cards are much slimmer, and fit easily into your pocket. Likewise, it is very common for people to carry around their smartphone with them all the time or wear a smartwatch. This makes card payments, digital wallets, and mobile payment apps more convenient. You can simply tap or swipe and pay!

Deloitte reports that ‘at-home’ consumption is expected to rise and become a $3 trillion economy by 2025 in APAC, totaling approximately 30% of the average consumers’ expenditure. The remaining 70% will be left to ‘outside-home’ contactless expenditure – they are calling it the ‘contactless economy’. With a large proportion of consumers choosing to spend using contactless payments for this convenience, countries are keen to encourage these payment methods to help their economies flourish.

Efficiency

Similarly to convenience, digital payments are likely quicker than cash payments, as it eliminates the need to travel to an ATM or queue in a bank to make a deposit or withdraw cash. You can pay for services, send money to a friend or put away your rainy day fund quickly!

Global transactions

Another useful aspect of online bank payments and mobile apps is that they facilitate international transactions, typically including automated conversions of currency and exchange rates. Unlike sending physical cash in the mail, online transactions can be safer and can take less time for the sender to organize and for the recipient to get their money.

In addition to our web product, the Remitly mobile app provides you with a safe and secure way to transfer money across the world without the need to send physical cash. As Remitly is a digital service, money transfers are affordable, fast, and, your hard-earned money is protected as it makes its way to your recipient. We also offer competitive exchange rates to help keep costs low.

Financial power

When using physical cash, it can be difficult to keep track of what you are spending unless you are manually keeping note. Whereas virtual payment methods can provide electronic statements, budgeting functionalities, and saving goals to help you take charge of your finances and spend more wisely.

Research shows that as people learn to manage their personal finances better and become more financially literate, they make smarter spending and saving decisions. This contributes to healthier economic growth, which is in every country’s best interest.

Is your business ready for a digital-first economy?

Digital and contactless payment methods are now a normal part of everyday life, both for consumers and businesses alike. As physical money is slowly replaced by digital currency, businesses around the world are finding new ways to adapt. So, what does living in a digital-first economy mean for businesses?

A digital-first trend is on the rise
Are businesses ready to go digital?
How can businesses prepare for a digital economy?

A digital-first trend is on the rise in the US

Prior to the COVID-19 pandemic, it was commonplace for small businesses to accept cash-only payments. Fast-forward to 2023, and many businesses now offer a choice of payment methods, with some opting to go completely cashless.

During the pandemic, over 40% of surveyed consumers switched to alternative payment methods, including making payments online or over the phone. When surveyed, 19% of consumers made their first-ever digital in-store payment in May 2020, and the majority of these transactions were completed using their smartphone via a digital wallet. The fear of COVID-19 transmission from physical tender has driven the adoption of contactless payments, resulting in 67% of surveyed retailers accepting some form of digital payment during the height of the pandemic.

However, debit and credit cards still remain two of the most popular payment methods, with 25.2 billion payment cards in circulation in 2021. In fact, when polled, 65% of Gen Z customers think that contactless payments are a ‘must-have’ for merchants, as 84% of businesses are now accepting debit or credit card contactless payments. Data shows that almost a third of consumers have swapped their primary card for a contactless option, with over 40% of Americans under 35 following this trend.

Recently, there has also been a significant increase in the adoption of smartphone payment solutions, with Apple, Google, and Samsung offering bespoke digital wallets to their users.

Mobile payment apps, such as Venmo, are also becoming increasingly popular. They enable users to complete transactions by transferring funds from their bank account to the merchant with ease using contactless functionalities. Mobile payment apps are so widely used that it’s estimated that consumers will spend $1.152 trillion using mobile apps by the end of 2023. In fact, our survey shows that over 65% of U.S. adults use mobile payment apps on a daily basis.

Are businesses ready to go digital?

With 36% of adults receiving digital payments and 83% of those also making digital payments, it is clear that digital transformation is changing the global economy. This leaves businesses with the option to adapt or lose out on a large proportion of their customer base.

A recent survey by Visa found that 59% of small businesses are either already using digital payments or are planning to use digital payments exclusively. The Visa study also found that over 70% of small businesses believe that the adoption of digital payments is fundamental to the growth of the company.

The number of merchant outlets worldwide accepting card payments is expected to reach 100 million by end of 2025. It is forecasted to rise from 74.5 million in 2019 to 95.9 million in 2025, which has been largely driven by the move to contactless payments during the pandemic. This demonstrates the scale of contactless payments and the potential growth available to expand into other digital payments. In fact, the total transaction value from digital payments is expected to grow by an average of 13.3% year-on-year, resulting in a total projected market value of over $15.1 trillion.

Furthermore, businesses tend to follow consumer interest when it comes to accepting payment methods—and the same is true for digital payments. Despite tax compliance uncertainty and a preference for cash, many countries in Africa are seeing a rise in digital payments. For example, 21% of business payments in Kenya are made with mobile money. And 62% of businesses in Africa as a whole sent payments via bank transfers. It’s expected that Brazilian businesses will get 65% of their revenue from digital payments by 2024.

On the other end of the spectrum, countries like Bangladesh have not yet expanded the necessary infrastructure for rapid adoption. Digital transactions as a whole have only grown to 20% since 2018. However, the government recently released a 114-page roadmap to further accelerate digital payment adoption.

Digital payment solutions are important investments across the globe, especially during economic uncertainty, since they enable businesses to capture transactions from a variety of demographics.

How can businesses prepare for a digital economy?

There is a clear change happening in consumer purchasing behavior, both online and in-store, as consumers look to digital payments as their preferred payment method. However, one-third of consumers’ personal spending is still done using cash or checks, so it’s important that businesses recognize that the transition is still underway.

5 considerations for businesses adopting digital payments

Here are some considerations for businesses as we prepare for a digital-first economy.

Offer a range of payment solutions – If you’re encouraging your customers to transition to digital payments, consider offering a range of payment solutions, such as mobile apps and online bank transfers. Whether your business relies on face-to-face, online, or over-the-phone transactions, it’s a good idea to accept a range of payment options. There are a variety of payment solutions available for businesses to take advantage of – it’s about finding the right solutions for your customers.
Manage financial records – Completing accurate financial records can be incredibly demanding, with multiple cash flows to consider. Digital payment solutions can make this process significantly easier with automated bookkeeping alongside live data tracking and insights, making your data work more efficiently.
Invest in suitable digital payment software – There are a wide variety of digital payment solutions available to businesses, which can provide all sorts of logistical support to companies. Safety is a key feature to consider when choosing digital payment software, as data breaches can be damaging to your company.
Avoid limiting customers to card-only payments – Refusing to accept cash altogether can prevent some consumers from making purchases and can significantly impact profitability in the long run. It can also prevent your business from expanding further, as it can limit your target audience by excluding certain age groups.
Make sure your customer base is ready – Communication is always key when introducing changes to your target customer base. Taking the time to inform consumers of potential risks and benefits protects your company against lost revenue and slow consumer adoption.

Are you ready?

The prospect of a digital-first economy is real, with 79% of U.S. adults surveyed stating that they would feel comfortable in a ‘cashless’ society. Although the inevitability of a digital-first economy does not phase the majority of Americans, it still remains to be seen whether the country and, indeed, the world, is ready.

So, the question is – are you ready for a digital-first economy?

6 ways to prepare for a digital-first economy
How to help your friends and family prepare
Send money abroad safely to a Visa debit card

6 ways to prepare for a digital-first economy

For some, the prospect of a ‘cashless’ society can seem exciting, but for others, it can be very daunting. Whether you’re the former or the latter, we’re here to help you get ready to embrace a digital-first economy. Here are the steps you can take to ensure you’re ready to evolve with the changing economy.

1. Do your research

When you’re dealing with something unfamiliar, it can help to arm yourself with as much information as possible. The more you know about what a digital-first economy might look like and how it impacts you, the more likely you are to be better prepared. If you’re not sure where to start, contact your local bank, and they can give you helpful tips and advice.

Once you’ve done your research, you can then start to create a list of actions that you can take to ensure you’re as ready as you can be.

2. Familiarize yourself with online banking

If you don’t already have online banking, now is the time to start! Online banking is going to play a major role in a digital economy, as you will need access to your bank accounts anywhere at any time. Once you have created an account, spend some time familiarizing yourself with your online banking app. Learn its basic functionalities, from creating a standing order to transferring money to a loved one, and be sure to do your research on how to bank safely.

3. Keep well-documented records

Part of the move to digital means going paperless – not just with money, but bank statements too. It’s unlikely that you’ll need physical records in the future, but it’s a good idea to make sure that all of your documentation is available in one place, just in case you do need to print off a physical copy.

Your bank statements should be available on your banking app, but it doesn’t hurt to download them and print a physical copy. In the unlikely event that your online banking is hacked, you will still have access to your bank documentation.

4. Get to know your spending habits

Understanding how much money leaves your bank account each month is important if you want to get to know your spending habits. Online banking apps can help you categorize your finances into a simple chart, providing a breakdown of how much of your money is spent on:

Clothing
Entertainment
Debt repayments
Home utility bills
Groceries
Insurance policies (i.e. car, home, or health insurance)
Transport costs (e.g. gas or train fares)

This will give you a clearer picture of how many payments leave your bank account each month and how much you are spending, so you can budget more effectively and set yourself up for financial success in 2023.

5. Manage your budget

If you’re not used to managing your budget using online banking, then it can be a good idea to consolidate your ingoings and outgoings in one place. Budget apps are a great way to manage your finances, as they enable you to see exactly how your money is being spent. There are plenty of online tools available to help you get to grips with managing your finances digitally.

6. Set your savings goals

It’s not just your everyday spending that will go digital – your savings will too. Think about how much you want to save each month and set a realistic goal that takes your monthly expenditure into account. Whether you’re saving for a short-term goal, such as a vacation or car repairs, or a long-term goal, like a down payment on a house, a savings account can help you manage your money more effectively.

There are different types of savings accounts available, and your bank can help find the right account for your needs. Some savings accounts allow you to lock your money away for a set amount of time, typically two years. Whereas, other savings accounts work similarly to checking accounts and allow you to withdraw money whenever you choose. The type of savings account you need will depend on whether your savings goals are short or long-term.

How to help your friends and family prepare

It’s important to make sure your friends and family are also prepared for a digital-first economy, and one of the best ways to do that is to simply talk about it with them. The fear around the prospect of a ‘cashless’ society can be overwhelming for some people, and it can prevent them from taking action. A lot of people have preconceived ideas about what a digital economy might look like and how it could impact their everyday lives. But in reality, the ‘cashless’ transition is already happening, with the percentage of people who use cash continuing to fall each year.

When having these conversations with your friends and family, it’s important to address their concerns. For example, some people believe that the move away from physical tender will make it difficult to manage their personal finances. By engaging in online banking, it’s possible to make your money work for you by exploring various finance plans, such as the 401(k) or a 529 plan.

Many people are also concerned about the safety of online banking and are worried they will fall subject to scams and cybercrime. In 2020, it’s estimated that as many as 1 in 3 Americans, unfortunately, fell victim to a phone scam, with 1 in 5 falling victim to multiple scams – demonstrating that education is vital. The best way to protect your friends and family from cybercrime is to encourage them to talk to their bank or a financial advisor for more advice, only provide essential card information when shopping online, and run through any online payments with someone they trust if they are unsure.

7 tips on how to help loved ones prepare for a digital-first economy

There are particular groups of people who may need additional support in transitioning to digital payment methods, such as those with disabilities, low incomes, or language barriers. Here are steps you can take to help everyone prepare for a digital-first economy.

Make sure they have bank accounts – All Americans will need bank accounts in order to benefit from a digital economy. According to a report by the Federal Reserve, 6% of Americans do not have access to a bank account and must rely on alternative financial services. Some groups may fall into this category, such as immigrants or the elderly, so it’s important to make sure they have the support available and access to at least one bank account.

In developing countries, approximately 71% of the population has a financial account, demonstrating an incredible 29% increase over the last decade. Yet, there are still 1.4 billion unbanked individuals worldwide, predominantly in developing countries. So, if you have family members or friends abroad, we recommend that you reach out to them and see if it is possible to open a bank account. In some locations, this will not always be feasible due to accessibility issues. If this is the case, try recommending other financial solutions, such as mobile money accounts if they have access to a digital device and internet connection.
Check they have access to the internet – Part of going digital means that everyone will need to rely on the internet to access their finances. Some people may struggle to gain access to the internet, as they may not be able to afford it, or it may not be available where they live. You can help family members or friends by ensuring that they can access the internet whether at home, at the local library, or internet café.
Familiarize them with exchange rates –Whether they are planning to travel abroad or send money to family and friends, they may need to exchange currency. Exchange rates fluctuate so you can help by recommending money transfer apps that offer fair and transparent pricing, like Remitly. Not only will they get a better exchange rate, but it’ll also save them worrying about exchanging currency overseas.
Create a support network – Changing how they manage their finances and the move to digital can be overwhelming, so it’s important to make sure your loved ones have a support network in place. Having people they can trust to help understand their finances and explain any changes in their circumstances can make all the difference.
Teach them how to transfer money securely – To help family members and friends send money safely, teach them the basics of making secure money transfers. It’s important that they only transfer money to people they know and trust and avoid any suspicious payment requests.
Show them how to send money abroad –Many people, including immigrants, may find that they need to send money abroad but may not know the easiest, quickest, and safest way to do so. Introduce them to a mobile remittance service like Remitly. When using the Remitly app, funds can be transferred from a Visa or Mastercard debit card, a credit card, or directly from their bank account.
Educate them on cybercrime – Unfortunately, the move towards a digital economy brings new challenges, such as cybercrime. Educating others on the common types of cybercrime that exist and the measures they can take to keep them safe is essential. Talk to them about the importance of using strong passwords, keeping software up to date, and using a secure server to access the internet.

Send money abroad safely to a Visa debit card

Access to banking is vital for so many people around the world, especially immigrants who need to send remittances to their families abroad. It’s important that their hard-earned money reaches their loved ones quickly and securely without incurring additional costs, such as inflated exchange rates and transfer fees. Remitly and Visa have partnered to give you a safe and secure way to transfer money abroad to your loved ones. It’s simple – all you need is their full name and Visa debit card number to get started. You can send money abroad from the palm of your hand using the Remitly app. When sending money abroad, the Remitly app simplifies the process of sending money to a Visa debit card. Follow these easy 5 steps to get started:

Enter the amount you wish to send – Remitly will display transparent money transfer costs so there are no unexpected costs.
Choose ‘debit card’ as the delivery method – Select the option to send funds to a debit card and enter the recipient’s 16-digit Visa debit card number.
Enter the recipient’s details – Add their first and last name, their phone number, and any other details required, such as their address.
Select the source of your payment method – Enter your card account details, including your bank account number, debit card, or credit card information that you’ll be sending the money from.
Check and send – Once you have entered all necessary information, take some time to make sure that it’s all accurate to avoid any delays and mistakes.

If the recipient doesn’t have a Visa account, then there’s no need to worry. We recognize that many of our customers are still cash-first, which is why we offer a variety of ways to receive money from abroad, including cash pick-up services.It’s simple, easy, and convenient. Find out more about how to transfer money abroad to a Visa Debit Card today.

The Future of Digital Remittances: Are You Ready?