Cross-border payments from people in South Africa helped the recipients survive financially, with 59% who made these payments to family and friends over the last year saying they would not have survived financially without that support compared to 40% globally.
Data from the 2022 Mastercard Borderless Payments Report shows an increase in the number of people using cross-border payments to support friends and family since last year, with 85% in South Africa saying they still use cross-border payments to send money internationally post-pandemic compared to the global average of 71%.
Mastercard surveyed nearly 8 000 consumers across 15 different markets and found that despite evidence of economic recovery, with earnings increasing globally compared to earnings before the pandemic and international travel opening up again, people in all countries send and receive cross-border payments more frequently than 12 months ago.
The key driver is indicated as ‘supporting family’ and over half (54%) of consumers globally who made online cross-border payments relied on these payments more than ever due to the coronavirus pandemic. In South Africa, 68% indicated they send money to support family.
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Why is supporting family continuing?
Mastercard says with many countries experiencing economic crises now, these payments will continue to provide a lifeline for people with families abroad, with nearly six in ten people (59%) globally and one in six (61%) in South Africa saying they send money abroad to support family and friends.
Globally, over four in ten (42%) people make or receive more cross-border payments than 12 months ago compared to 51% in South Africa, while 25% make or receive less cross-border payments, higher than the global figure of 19%.
Why are so many people still relying on these payments? More than two years later, the economic effects of the pandemic and of other recent global events, such as the war in Ukraine, mean people still find it difficult to make ends meet.
According to the report, nearly half (45%) of those who make online cross-border payments surveyed globally say their family members abroad still struggle financially and need their financial support. While more than half (54%) say they relied on online cross-border payments more than ever before. The data suggests the trend is here to stay, with 71% saying that although they can now travel home, they will continue to send money online because it is so easy to do.
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An easy way to send money
It is an easy way to send money abroad because it is fast, transparent and secure. Mastercard says keeping the transaction, as well as personal and financial information secure is the most important consideration when making a cross-border payment, with over four in ten (41%) people ranking this as most important, with the figure reaching 46% in South Africa.
Almost nine in ten (88%) people globally and 91% in South Africa who make online cross-border payments trust the security of online cross-border payments as the cross-border payments network plays an increasingly central role in the global economy.
“A well-functioning cross-border payment ecosystem has long been a crucial element of the global economy and remittances have become even more vital for families to get by given the huge economic challenges countries around the world are facing,” Stephen Grainger, executive vice president for Mastercard Cross Border Services says.
“Cross-border payments provided a lifeline for many during the pandemic and will continue to do so for the months ahead while playing a key role in keeping the economy moving and allowing families to put food on the table.”
Mastercard facilitated increased volume and value of international payments between people and small businesses during the pandemic with its Cross Border Services enabling banks, non-banking financial institutions and digital players to support multiple payment use cases and reach 90% of the world’s population in 100+ markets, improving predictability and certainty for international transfers.
Grainger says Mastercard’s services are a key driver in advancing the company’s multi-rail proposition, delivering the choice to globally pay out to cards, bank accounts, digital wallets and cash agents through a single, secure connection.
