Female migrant workers and the families they support are being abandoned by the money-transfer industry

When Kuwait entered its first lockdown in March 2020, Cristine Francisco says her employers barred her from leaving their home. Stuck inside a sprawling 11-bedroom house set over three floors, the domestic worker’s thoughts quickly turned to her mother in the Philippines.

In pre-pandemic times, Francisco spent her day off walking the 40-minute trip to a nearby money-transfer branch. Every two weeks, she sent the majority of her latest earnings—her salary is $450 a month, paid in cash—home to the Philippines. Francisco’s family uses that money to pay for essentials, including the treatment of her mother’s heart and kidney stone issues. 

Trapped inside, Francisco was unable to send her salary home for three months. Every night, she lay awake worrying as her family in Iloilo, a coastal province in the west of the Philippines, entered what she describes as “survival” mode. Her brother, Arnie, says the family cut expenses everywhere they could, eating solely from their vegetable garden. Francisco begged her older sister, who had her own family to support, to lend Francisco money for their mother’s medical expenses.

“Cristine is our breadwinner. We rely 100% on her salary,” says Arnie. “Without her remittances, life here in the Philippines is so hard.” 

Over a year into the pandemic, Francisco says her elderly employers still heavily restrict her movements. Now the family’s driver helps deliver her earnings to the local money-transfer agent.

Others may not even have that option. Francisco is just one of some 100 million female migrant workers whose remittances—money sent to family members still living in their home countries—sustain economies around the world. Women make up about half of all migrants living and working abroad. They also account for roughly half of annual remittances, but tend to send smaller amounts in more frequent intervals than their male counterparts, according to the International Organization for Migration, and consequently pay higher transaction fees. 

For millions of families, these remittances are an economic lifeline. In 2019, money sent by migrant workers back to low- and middle-income countries reached $554 billion, overtaking foreign direct investments, according to the World Bank. In the Philippines, one of the world’s most remittance-dependent economies, domestic workers—who are overwhelmingly female—account for a third of all overseas foreign workers who send money home. When remittances flag, communities see less investment in schooling and new businesses, and households lose the cushion that might help them survive bad harvests or sickness, says Michael Clemens, an economist at the Center for Global Development, a Washington, D.C., think tank. There is also evidence that a dip in transfers can cause higher child mortality and school dropout rates.

The pandemic’s impact on the remittance economy has been varied. Overall, the amount migrant workers sent home in 2020 remained relatively steady—dipping just 1.6% below 2019 levels. Some regions, however, including sub-Saharan Africa, Central and South Asia, and parts of Europe, saw more dramatic drops. There’s less detailed information about the countries where these remittances originate, though the World Bank reports that the largest amounts last year came from the U.S., followed by the UAE and Saudi Arabia. And domestic workers in the Persian Gulf countries in particular have been impacted by broad lockdowns that have, in many cases, made it difficult to get to money-transfer agents to send payments home, say experts.

Such physical restrictions have hit working-class migrants hard, since they are almost always paid in cash, explains Craig Churchill, head of social finance at the International Labour Organization. As a result, some have turned to digital transfer platforms. Industry leaders such as Western Union saw a 45% increase in digital revenues in the third quarter of 2020 compared with the year before, while MoneyGram’s digital businesses now account for 30% of all transactions—up from 18% in February 2020. Digital-native remittance services providers, such as WorldRemit and Wise (formerly TransferWise), also posted significant growth numbers.

While the shift to digital is helping some, there is growing concern that women working overseas have been left out of the wave of digitization, says Saskia Vossenberg, gender lead for migration and remittances at the United Nations Capital Development Fund (UNCDF). 

When transferring cash in person, a bank account is not necessarily needed. But for many digital channels, it’s essential, says Vossenberg. That can be a stumbling block for women, who account for a disproportionately large share of the world’s unbanked population, with over 45% of those in low-income countries also lacking access to identification, such as birth certificates, which are needed to set up a bank account or use formal channels. In sub-Saharan Africa, for example, nearly one-third of the population does not have government-issued identification. High fees, insufficient local services, and laws such as those that ban mothers from registering their children without their husband all play a part in keeping a large number of women in developing nations from participating in the banking system.  

To use digital money-transfer platforms, migrant workers often need identification documents issued by their host country, as well as both the access and capability to navigate an app—all of which have proved to be more difficult for female migrants. Across lower-middle-income countries, women are 8% less likely to own a cell phone and 20% less likely to use mobile Internet. They also tend to adopt new services more slowly than men. 

Women working in the Middle East, like Francisco, also face a unique set of hurdles. Most domestic workers are employed under the kafala system, which makes it illegal to switch jobs or leave the country without their employer’s permission. Despite recent reforms, the changes have done little to protect domestic workers, say advocacy groups, and millions of workers have been excluded since they’re not covered by local labor laws. In reality, it is common practice for employers to confiscate passports, visas, and phones, rights groups say.

Even migrants who do have access to mobile devices may not be in a position to learn about digital transfer apps. Many domestic workers live isolated lives, cleaning their employers’ homes and cooking. “They’re on their own,” says Churchill. “It’s easier for migrants working in hotels or construction to share information and experiences.”

The biggest players in the money-transfer space have not managed to overcome these hurdles with their digital platforms, says Vossenberg. There’s still a huge hole in the market for a gender-sensitive, migrant-friendly digital service capable of reaching women who are increasingly confined or controlled by employers. Such a service could make a huge difference in the lives of female migrant workers and their families—and be a boon to companies’ bottom lines, says Vossenberg. “We can design the most fantastic financial product, but if we do not figure out ways to reach women…then all these brilliant technologies won’t have an impact or be beneficial.”  

The pandemic has helped illustrate why such an option is so urgently needed, but the potential benefits go far beyond the virus. A workable digital-remittance system would also give women more control over their salary when their employers try to take advantage—a problem that migrant rights groups say has flared during lockdowns and is likely to persist when they lift.

For one domestic worker in Qatar, being unable to manage her own money has caused huge stress. Before the pandemic, the 36-year-old Kenyan woman, who asked to remain anonymous because of job security concerns, received her full salary in cash, sending roughly $190 home to her family each month. When the country went into lockdown last year, she says she was no longer able to leave her employer’s home to transfer money, so her employer offered to use a fintech service to transfer a percentage of her salary to her family digitally. 

She says she was grateful—until she realized he transferred roughly $80 less each month than she sent home pre-pandemic. Her employer got angry and refused when she asked for extra money to be transferred, she says. Her family, which includes three young children, have since racked up debt to pay for food. 

“I am not at peace,” she says in an interview on her day off one Friday afternoon. Much like Francisco, she says her employer still won’t let her travel to the local exchange service because of COVID-19 fears. “The pandemic has brought the worst feelings in my life.”

The domestic worker receives the rest of her salary—roughly $220—in cash, but she says it’s relatively useless until she’s permitted outside again. Instead, she has spent the past year and a half stashing crumpled banknotes and shiny coins under her mattress and inside drawers. “I don’t like the idea of keeping my money in my room—I could lose everything,” she says. “But right now, I don’t trust anybody.”

Swapping cash for more digital payments not only lowers costs, saves time, and eliminates the inconvenience—and lately, impossibility—of visiting money-transfer outlets during business hours, but it’s also the start of a “superhighway” that helps women access other financial services such as savings, insurance, and much more, says Vossenberg.

The United Nations Capital Development Fund is trying to help provide such an on-ramp by backing WeLucy, a new mobile app that’s expected to debut in Singapore next month before expanding to other countries later this year. The app will offer services for entrepreneurial women, including a low-cost remittance option, as well as no-interest salary advances and mentor support. (UNCDF is providing WeLucy with funding and technical support, but as a nonprofit will not reap any financial gains from the app.)

While it’s far too early to confirm the app’s effectiveness, it has been designed with women in mind. The developers began by polling domestic workers about the financial challenges they face, says cofounder and CEO Debbie Watkins. That on-the-ground information informed the services they built into the app. In Singapore, for example, it is common for domestic workers to borrow from their employer when they need money urgently. The repayment is often written down roughly on a piece of paper, which can lead to disputes or forgotten repayments. WeLucy offers the option to record those loans digitally, creates a proper repayment plan between both parties, and automatically tracks and manages it.

“A lot of these women are desperate for information, training, and education,” says Vossenberg. “If you can reimagine remittance services, it will help women be the architect of their own lives and those she takes care of.” 

After endless sleepless nights last year, Francisco says she feels calmer. She’d like to use online services but says she doesn’t really know how they work. Besides, she’ll be returning home to the Philippines to help look after her mother in a matter of weeks. “I’m just waiting for my ticket,” she says, after eight years in the Middle East. “Hopefully other domestic workers in Kuwait will have these services soon.”

Louise Donovan is a reporter with The Fuller Project, a nonprofit newsroom that reports on global issues affecting women.