Mobile-First Remittances: Why Smartphones Are Replacing Money Transfer Shops

Personal remittances, that is, money migrants send back home to their families and communities, have emerged as the largest source of external finance for low- and middle-income countries (LMICs).

Of the $905 billion in personal remittances sent across the world in 2024, nearly $700 billion went to LMICs, according to the UN Department of Economic and Social Affairs (DESA). This far exceeds the combined total (~$500 billion) of foreign direct investments (FDI) and official development assistance (ODA) in the same year.

For the recipients back home, money received is crucial for survival and meeting basic needs, necessitating that the inflow is accessible at all times. However, a significant portion of the global adult population is unbanked.

More so, many local banks in LMICs do not have branches in hard-to-reach regions, and when they do exist, the services are quite limited.

These factors, fueled by the rise of fintech remittance service providers and extensive smartphone penetration, have led to a gradual but steady shift from physical counters to digital wallets for receiving remittances.

In 2025, the World Bank reported that 84% of adults in LMICs now own a mobile phone, allowing them to, among other things, access digital financial services and receive payments directly. With that in perspective, smartphones are fast-becoming the primary remittance tool worldwide.

Let’s examine the factors driving this shift.

 

The Decline of Brick-and-Mortar Transfer Shops

 

In the absence of banks, many people living in rural areas relied on money transfer shops and kiosks to receive money from family members abroad. This often meant sending the shop owner’s account details to the remittance sender.

Understandably, this also meant that people who use these services had to deal with higher fees and opaque FX rates.

It doesn’t help that these brick-and-mortar shops are not particularly the most convenient avenue for receiving money.

They are typically open for limited hours on a given number of days. And the popular money transfer shops are usually crowded and often located in cities or closer to the cities, requiring that customers travel and queue up to get their money.

Therefore, it made sense that with the COVID-era disruption of in-person services and subsequent proliferation of digital services, people quickly adopted digital options.

 

Why Smartphones Win

 

The World Bank Global Findex 2025 report indicates that the increasing level of mobile phone ownership and internet access is a primary driver of digital money account ownership. This trend is marked by a significant increase in digital payments in LMICs since 2021, which are far safer than cash payments.

As more smartphones become more ubiquitous and affordable in low-income markets, going for digital payments over physical transfer shops becomes a very easy choice to make.

After all, unlike transfer shops, smartphones offer always-on access and instant transactions. No need to travel, queue up, and probably learn that the transfer is yet to reflect.

Most mobile transfer service providers offer intuitive apps, allowing those with limited technical backgrounds to track and manage their money.

In a nutshell, compared to paperwork-heavy shops, mobile-first remittances are inarguably the better option.

 

Cost, Speed, and Transparency Advantages

 

With money transfer shops, customers anticipate slow transfers and high costs as part of the deal. Unless the shop owner is a registered agent with a given international money transfer service, transfers to the shop owners are typically made to their bank accounts.

International money transfers to bank accounts take up to 5 business days to arrive, and the shop owner might take some time to withdraw and make the cash available.

Besides the bank transfer costs, shop owners also impose their own charges, which are typically arbitrary. The remittance receiver has no form of control over costs, nor any idea what the total cost would be.

The cost of sending money from the US to Haiti, for instance, can amount to up to 7.4% of the total amount sent, and some transfers can take more than 6 days to arrive.

Unsurprisingly, mobile-first remittance services substantially reduce how much money transfer to Haiti will cost by nearly 100%. In fact, customers can benefit from a $0 transfer fee on the first few transactions while equally enjoying highly competitive exchange rates and instant transfers.

 

Financial Inclusion and the Unbanked

 

By bridging the gap between remittance senders and remittance receivers, mobile wallets and other fintech services embody a well-deserved status as the champions of financial inclusion.

In 2024, the International Fund for Agricultural Development (IFAD) Promoting Financial Inclusion Through Digitalization of Remittances report indicated that the role digital remittances play in reducing costs, empowering recipients, and boosting security serves as a key driver for financial inclusion.

For many recipients in unbanked and underserved regions, mobile wallets are essential means of receiving money.

Mobile wallets not only help people in LMICs to receive money directly, but also provide access to other digital financial services, including savings, payments, management and tracking, and credit access.

 

Security, Regulation, and Trust

 

Moving around with cash has never been a safer option. However, even with mobile wallets, security risks still exist and continue to emerge, particularly given the rate at which malicious attacks are occurring.

As mobile wallets and mobile-first remittances become more commonplace, there is a strong need for users to do due diligence when choosing a digital remittance service provider.

Reputable remittance service providers offer:

• Biometric authentication and encryption for mobile accounts. This is usually a two-factor or multifactor authentication mechanism, including PIN, password, fingerprint scanner, and face recognition, among others.
• KYC/AML-compliant digital onboarding, which allows only people with valid ID and other relevant documentation to own a mobile wallet account.

These security measures enable fintech apps to proactively monitor and safeguard customers’ accounts while equally ensuring compliance with regulatory frameworks across the globe.

As a result, there is growing confidence in regulated fintech apps over money transfer shops, since they embed security by default.

 

What This Means for the Future of Remittances

 

The shift to mobile-first remittances promises an overall net benefit for people living in LMICs and the broader remittance market.

More direct access to loved ones at a faster and more affordable rate is an incentive for more remittance flows to LMICs, further expanding markets for remittance service providers.

Money transfer shops have the option of repositioning their service offering to complement mobile-first remittances or risk losing their entire market as mobile phones and the internet become more accessible and affordable.

With fast-paced advancements and innovations in the fintech world, super-apps and embedded finance are on track to become the norm. Consequently, mobile-first remittances will be the default avenue for sending money to LMICs, not the alternative.

 

Conclusion

 

Clearly, smartphones are the new remittance counter. Access to a smartphone and a mobile wallet immediately eliminates all the inconveniences and high costs associated with money transfer shops.

More so, mobile wallets cut out the middleman, allowing a more direct line of access between family members and friends in different countries. This, to a great extent, enhances confidentiality and security between the parties and encourages more flows to LMICs.

From whatever angle the money transfer shops vs. mobile-first remittances debate is assessed, mobile remittances come out on top as the far better option.

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