The news: A growing migrant community in the US and a lack of formal remittance channels is creating an opening in Venezuela for US-based remittance firms to grow, according to a report from Washington-based think tank Inter-American Dialogue (IAD) cited by Bloomberg.
Here’s why: Remittance inflows into Latin America will reach $135.26 billion in 2022, making up 17.5% of global remittance inflows, according to our forecasts. Bringing Venezuela into the formal remittance system would expand this already huge opportunity.
Why this matters: In the medium term, we expect Venezuela to be a prime growth opportunity for US-based remittance providers.
The state of Venezuela’s financial system sets up US remittance providers for success in the country: About 80% of adults in Venezuela have bank accounts, one of the highest financial inclusion rates in the region, according to the IAD report. This eliminates a big stumbling block for US remittance providers.
The big takeaway: As US-based remittance providers explore growth in Latin America, Venezuela presents a large untapped opportunity. While they will have to monitor how political dynamics unfold, US-based providers can bolster their presence in this region and rack up payments revenues.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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