By Michael Kent, Chairman, Azimo

The amount of money sent in remittances reached record levels last year. According to recent figures published by the World Bank, migrant workers sent $529 billion back home, providing a lifeline to more than one billion people. That’s one in seven people on the planet.

That record looks set to be broken again in 2019, showing how important cross-border payments are to supporting communities and global economic growth. In countries such as Nepal and Haiti, money transfer account for as much as 25% of the nation’s GDP.

FinTech innovation is injecting much-needed competition into this lucrative market, which is good news for consumers. Traditional cross-border payments are notoriously expensive, but new digital money transfer players are entering the arena, and bringing better rates and faster transfers to billions of smartphone owners worldwide.

The emergence of faster, cheaper fintech money transfers are not only benefiting the families of the diaspora, but also millions of small business owners who have moved abroad and become entrepreneurs in their new homeland.

In the UK alone, companies set up by migrants create 14% of British jobs, and migrants are three times more likely to set up businesses than lifelong UK residents. One study estimates that one in 7 companies in the UK are set up by migrants. Results from studies in Asia and America show similar results.

These UK businesses are turning to digital money transfer companies to help them buy stock, pay staff and invest overseas.

By avoiding banks and traditional money transfers giants like Western Union and Moneygram, SMEs are cutting their transfer costs by as much as 75% – while also tapping into a fast, safe and convenient way to send money from their mobile phones. These savings are critical for businesses that run on tight margins and need to reduce costs.

When we launched Azimo, we never imagined that so many entrepreneurs would use our services. Today, we help thousands of small and medium enterprises across Europe to manage international payments – from restaurants and pubs to niche boutiques. Cowling & Wilcox, an art supplies chain, use us to pay partners in China and Europe. Urban Change Lab pay local artisans in Kenya using the platform due to lower prices and faster transfer speeds than banks and traditional money transfer shops. This list goes on and on.

As migrant populations continue to grow in Europe, EMEA and America, the digital money transfer market will also expand to fuel the demand, and drive down costs as more competition enters the space.

This is excellent news for economic development, as small businesses are the backbone of every nation’s economy. SMEs have been underserved for years, despite accounting for nearly 30 percent of global imports. In emerging markets they make up 45 percent of total employment.

It’s good to see that the technology sector is taking the lead in addressing this neglected but hugely rewarding market. Together we are creating a more prosperous and inclusive economy – which is what the new world of financial services is all about.