Remittances: a lifeline for families and communities in SA

Johannesburg, 10 June 2025: The United Nations’ (UN) International Day of Family Remittances, celebrated on 16 June, showcases how international remittances – money sent from one country to another, often by a foreign worker to family or friends in their home country – contribute both to national economies and the resilience of households and communities around the world.

Remittances are an often underacknowledged component of the global economy, but their effect is substantial. Migrant workers collectively sent home $5 trillion globally over the past decade – an amount exceeding official development assistance and equalling total foreign direct investment. According to the UN, “Through the money they send home, migrants support livelihoods, strengthen economies and contribute directly to the Sustainable Development Goals (SDGs).”

Digital payments platform SOLmate is proud to commemorate the International Day of Family Remittances by highlighting its role in making financial services accessible to foreign nationals who face significant barriers to traditional banking in South Africa.

World Bank data reveals South Africa remains the most expensive G20 country from which to send money home, with average costs reaching nearly 12 per cent for a $200 transfer. This stands in stark contrast to the UN's Sustainable Development Goal of reducing remittance costs to below three per cent by 2030. Approximately 50 per cent of remittances from SA to neighbouring countries still flow through informal channels, and the need for affordable, accessible digital solutions has never been more urgent.

"Remittances represent far more than financial transactions. They are lifelines that support education, healthcare and economic resilience for millions of families across Africa," said Jonathan Holden, COO of SOLmate. "By providing digital wallet services at significantly lower costs than traditional providers, we're helping ensure more money reaches the families who need it most, rather than being lost to excessive fees."  This approach directly supports the UN's 2025 campaign priorities, which emphasise strengthening digital and financial inclusion among migrant households, and reducing remittance costs through technological innovation.

The importance of affordable remittances extends beyond individual families. According to the International Fund for Agricultural Development, remittances can represent up to 60 per cent of recipient families' income in developing countries, with a 10 per cent increase in per capita remittances leading to a 3.5 per cent decline in poverty rates. In rural communities, half of all remittances support agriculture-related expenses, contributing directly to food security and economic development.

In 2023, South Africa received approximately $844 million in remittances, a slight decrease from $873 million in 2022. In comparison to the global average remittance inflow of $4.59 billion per country, this $844 million inflow is relatively modest, indicating potential for growth in both formal and digital remittance channels. South Africa's digital remittance market is projected to grow at 13.9 per cent annually through 2029, driven by increasing adoption of fintech platforms. This shift from informal to formal channels accelerated during the COVID-19 pandemic, with digital remittance service provider usage jumping from 18 per cent in 2016 to 68 per cent in 2021.

Holden says, “By making remittances more affordable and accessible, digital platforms play a crucial role in ensuring these vital funds reach their intended recipients and contribute to sustainable development across Africa.”

The company's commitment to financial inclusion aligns with broader regional initiatives, including South Africa's adoption of the ISO 20022 messaging standard and the Southern African Development Community's Real-Time Gross Settlement Renewal Programme, both aimed at modernising payment infrastructure and reducing transaction costs throughout the region.

"The International Day of Family Remittances recognises the bonds that connect families across continents, and highlights the vital work we do at SOLmate," Holden concluded. "These remittances are lifelines that sustain millions of households. We celebrate the contribution and resilience of migrant workers and the African diaspora, and remain committed to delivering innovative digital solutions that strengthen both financial inclusion and the economic foundations of communities.