Remitly's Digital Remittance Model: A High-Conviction Play in a $22 Trillion Market

The global remittance market, valued at $22 trillion, is undergoing a seismic shift. Traditional players like Western Union and MoneyGram are being outpaced by digital-first fintechs that leverage technology to slash costs, improve margins, and redefine user experiences. At the forefront of this revolution is Remitly, a Seattle-based cross-border payment platform that has reimagined the economics of money transfers. With a LTV-to-CAC ratio exceeding 6x (far above the industry average of 3x), a 34% YoY revenue growth in Q2 2025, and a 16% Adjusted EBITDA margin, Remitly is not just surviving—it's thriving in a sector ripe for disruption.

Unit Economics: The Engine of Scalability

Remitly's financial model is a masterclass in unit economics. Its customer acquisition costs (CAC) have plummeted by 422 basis points year-over-year, driven by a shift to digital marketing and AI-driven customer segmentation. Meanwhile, its take-rate (revenue per transaction) has grown from 2.2586 in 2022 to 2.449 in 2023, reflecting its ability to monetize transactions without aggressive discounting. This is a stark contrast to legacy players like Western Union, whose LTV-to-CAC ratio remains below 3x due to the overhead of maintaining physical agent networks.

The implications are clear: Remitly's digital-first approach eliminates the need for costly infrastructure, enabling it to reinvest savings into automation and AI. For example, the company reduced customer support costs by 46 basis points through AI-driven chatbots and cut technology expenses by 225 basis points via automation. These efficiencies have stabilized its Adjusted EBITDA margin at 16%, a rare feat in a sector historically plagued by razor-thin margins.

AI-Driven Growth: Beyond Cost-Cutting

While many fintechs tout AI as a buzzword, Remitly is deploying it strategically to drive both margin expansion and scalability. The company's AI-powered financial forecasting system predicts currency demand in recipient countries, allowing it to pre-fund fiat accounts and ensure fast, reliable transfers. This reduces settlement delays and improves customer satisfaction—a critical differentiator in a market where speed and reliability are king.

But the real innovation lies in the Remitly Wallet, set to launch in September 2025. This multi-currency wallet integrates AI-driven risk models and user behavior analytics to detect and prevent fraud in real time. For users in volatile markets, the wallet offers a secure store of value for both fiat and stablecoins, addressing a pain point for millions of unbanked and underbanked individuals. The AI also personalizes user experiences, adapting to spending patterns and preferences to optimize transaction costs and retention.

Stablecoin Integration: The Next Frontier

Remitly's most transformative move is its integration of stablecoins into its global payment infrastructure. Partnering with Bridge (a Stripe-owned stablecoin infrastructure provider), the company is enabling real-time, 24/7 cross-border transactions using tokenized U.S. dollar stablecoins like USDC. This eliminates the need for pre-funded fiat accounts, which traditionally tied up working capital. Instead, stablecoins allow Remitly to move value instantly across time zones and weekends, responding to demand surges in volatile markets without liquidity constraints.

The benefits are threefold:
1. Cost Efficiency: Stablecoins reduce settlement delays and intermediary fees, cutting transaction costs by up to 50% in high-volume corridors.
2. Liquidity Management: By tokenizing value, Remitly can allocate capital more dynamically, avoiding the need to hold large fiat reserves in unstable economies.
3. Scalability: The integration of stablecoins into the Remitly Wallet and payout network positions the company to capture a growing share of the $3 billion monthly stablecoin transaction volume (up 30x since 2020).

Market Leadership and Long-Term Catalysts

Remitly's strategy is not just about incremental improvements—it's about redefining the remittance value chain. By combining AI-driven forecasting, stablecoin-based liquidity, and a user-centric platform, the company is addressing the core inefficiencies of traditional remittances: high fees, slow processing, and lack of financial inclusion.

The CEO, Matt Oppenheimer, has called this a “transformative step” in how value is stored and moved globally. With 170 countries in its network and a focus on high-growth corridors like the Philippines, Mexico, and India, Remitly is well-positioned to capitalize on the $22 trillion market. Its ability to scale unit economics while expanding margins through AI and stablecoins creates a flywheel effect: lower costs drive higher adoption, which in turn fuels data-driven personalization and further margin expansion.

Investment Thesis

For investors, Remitly represents a rare combination of defensible unit economics, technological innovation, and regulatory alignment. The company's 16% EBITDA margin and 34% YoY revenue growth in Q2 2025 suggest a business that is not only scaling but doing so profitably. Meanwhile, its stablecoin integration and AI-driven risk models position it to outperform peers in an increasingly competitive landscape.

The risks? Regulatory scrutiny around stablecoins and cross-border payments remains a wildcard. However, Remitly's partnership with Bridge and its licensed fiat operations provide a compliance buffer, mitigating some of these concerns.

Bottom Line: Remitly is not just a fintech—it's a digital infrastructure play in a $22 trillion market. For long-term investors, the company's ability to leverage AI, stablecoins, and superior unit economics makes it a high-conviction buy. As the world moves toward real-time, tokenized value transfer, Remitly is building the rails to get there first.