Western Union, the US-based multinational financial services company, last week published its ‘Global Money Transfer Index’, which revealed that Kuwait is the sixth largest source in the world for outward remittances of money.

Citing World Bank data, the index noted that a total of US$18.5 billion were remitted from Kuwait in 2021, whereas inflows amounted to $27 million. The report indicated that 63 percent of residents in Kuwait send money transfers at least once a month, and that 69 percent increased the value of the money transfers they sent due to the rising cost of living.

To diversify its economy, the Kuwaiti government launched Vision 2035 as a strategy for digital transformation that will support the nation in its goal of embracing the Fourth Industrial Revolution. The Central Bank of Kuwait announced in 2022 that development of the digital Gulf payment systems is proceeding in full swing, as many financial institutions have already joined the system.

The system was launched to develop cross-border payments and enhance efficiency. It was noted that for every 10 people, there are more than 6 senders of remittances (63 percent) and 4 recipients of remittances (38 percent) who use the money transfer service at least once a month. Currently, 40 percent of senders prefer choosing between online-only or individual/business money transfer services, while 34 percent say they use comprehensive digital services.

The index cited several barriers to increasing digital participation in Kuwait, including a preference for face-to-face interaction (31 percent); poor customer service (14 percent); and lack of trust (14 percent). This reluctance partly explains why 49 percent of respondents want to send in a range of online and in-person conversion options in the future, compared to 34 percent who said they would fully embrace all digital channels.

Furthermore, the report found that those who receive money also need more convincing to fully adopt digital transfers, as only 42 percent of them currently choose this method of collecting money. When asked about future preference, the number drops to less than 1 in every 5 (18 percent), while 49 percent believe a choice from a full range of options should be available.

On the other hand, more than a third of senders (37 percent) transfer money to support family members, and this rises to 43 percent for those between the ages of 25 and 44. Family financial assistance was also the chief reason 19 percent of recipients collected money.

Consumers say they are affected by the universal cost of living crisis, and 69 percent of senders say the strain on recipients’ finances is forcing them to transfer more money. The senders also feel the pinch, with 63 percent saying the cost of living prevents them from sending money as much.

The Middle East and Asia Pacific region is home to 6 out of every 10 people on the planet, and it is the center of gravity in the remittance industry. More than half of those who receive remittances in the world are in these markets, which include 6 of the 8 largest countries receiving remittances in the world. The two regions also represent nine of the top 20 remittance-sending countries.

Although family support is the main objective of remittances, consumers revealed that these remittances also play a strong role in future financial planning. Educational expenditure is the second most important reason for money transfers. Consumers also cited other essential reasons for transfers, such as supporting home business needs and saving for the future.


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