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Tito Nícias Teixeira da Silva Filho

20. Remittance Costs and Economies of Scale 21. Remittance Costs and Market Competition 22. Difference in Remittance Costs Among Different Type of Providers 23. Remittance Costs: Corresponding Banking Relationships 24. Average Cost of Remittances: Fee and FX Margin 25. Remittance Costs and the Exchange Rate Regime Tables 1. Average Remittances Cost: Sending x Receiving Country 2. Remittance Costs Transparency: FX Margin Appendix Figures A2. The CBRs Network Has Become More Concentrated A2. Countries Most Affected by The Loss of Correspondent

Tito Nícias Teixeira da Silva Filho
There has been a global push to decrease the cost of remittances since at least 2009, which has culminated with its inclusion in the Sustainable Development Goals in 2015. Despite this effort and the emergence of new business models, remittance costs have been decreasing very slowly, disproving predictions that sharp declines would be just around the corner. In addition, remitting to poorer countries remains very expensive. Oddly, this situation has not been able to elicit academic interest on the drivers of remittance costs. This paper delved deeply into the remittances ecosystem and found a very complex, heterogenous and unequal environment, one in which costs are driven by a myriad of factors and where there are no easy and quick solutions available, which explains the disappointing outcome so far. Nonetheless, it also shows that while policymakers have limited room to act they still have a very important role to play.
Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar
This paper uses data across 365 corridors to document time and country variation in remittance fees and explore factors predicting variation in remittance fees. We document a general reduction in such fees over the past decade although the goal of fees below 3 percent has not been met yet in many corridors. We identify both cost- and risk-based constraints and market structure as barriers to lower remittance fees. Higher transaction costs as result of a more rural population in the sending country and lower scale are associated with higher remittance fees. However, lower risks due to the stability of fixed exchange rates and Internet rather than cash payment are associated with lower remittance fees. Finally, remittance corridors dominated by banks and few players are characterized by higher fees.
International Monetary Fund
This Selected Issues paper focuses on recent developments with Kiribati’s Revenue Equalization Reserve Fund (RERF). The paper also examines fiscal aspects of climate change, and considers options for improving fishing license fees, which remain an important source of revenue. It also analyzes recent developments and the outlook for remittances to Kiribati, which is another important source of external revenue and brings important economic benefits, such as reducing poverty and stabilizing national income.
International Monetary Fund

Abstract

Intraregional financial activity in Central America has grown substantially in the past decade, contributing to efficiency and economic development. At the same time, the expansion of activities by regional conglomerates has increased the challenges to supervisory authorities of containing the risks of contagion. Prepared as part of the Central America Financial Sector Regional Project by an IMF and World Bank staff team, this book outlines trends in the region's financial sector integration, supervisory responses, development of the insurance sector, payment and securities settlement arrangements, and worker remittances. It addresses the many common policy challenges facing Central American countries--Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama--in financial sector reform. The book offers key policy recommendations.

Julia Bersch, Jean François Clevy, Naseem Muhammad, Mrs. Esther Perez Ruiz, and Mr. Yorbol Yakhshilikov

allow for favorable FX rates passed on to remittance recipients. In those CA countries that are dollarized (El Salvador) or have a crawling peg arrangement (Honduras), traditional providers offer more competitive fees than digital operators. Guatemala: RSP, Payment Network and Costs (number of payout locations and percent) Sources: Remittance Prices Worldwide, RSP webpages, IMF staff calculations Remittance Cost by Origination Channel 2020Q1 (% of amount sent, US$200 transaction) Source: staff calculations based on Remittance Prices Worlwide

Tito Nícias Teixeira da Silva Filho

interlinked national payment systems). Non-bank RSP can also access the network as customers of banks. While this model provides a valuable service, as it allows banks to send funds to virtually any other bank in the world, being able to reach even the smallest corridors, it has non-negligible shortcomings. For example, given the absence of a direct link between the capturing and disbursing RSP, the former does not know in advance what the fee the latter charges is. Thus, the final remittance cost may not be known until the payment is completed. This contrasts with other

International Monetary Fund. African Dept.

impacting financial stability. Migrant deposits . The banking system and the economy relies significantly on deposits from the Cabo Verdean diaspora. Over the last decade, the country has experienced a strong accumulation of emigrant deposits. These deposits have provided much-needed foreign exchange to the country. Migrant deposits represent 38 percent of total deposits (about 37 percent of GDP); annual inflows have averaged 2½ percent of GDP during 2015-17. Remittances . Continued loss of CBRs could result in higher remittance cost and increased use of non

Julia Bersch, Jean François Clevy, Naseem Muhammad, Mrs. Esther Perez Ruiz, and Mr. Yorbol Yakhshilikov
This paper analyzes the potential for fintech to facilitate cheaper and more efficient remittances, and to enhance financial inclusion in Central America. Digital remittances remain nascent in the region, primarily reflecting behavioral inertia, small cost advantages of digital over traditional channels, and inadequate financial literacy. Through expanded alliances between traditional and fintech operators, digital remittances can further reduce transaction costs and reach those remote, low-income households in a timely and secure manner. A meaningful expansion of fintech remittances necessitates an enabling regulatory environment for digital financial services, and KYC and AML/CFT requirements proportionate to the value of transfers.
Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar

, the median costs across all banks (MTOs) in a corridor and specifically for two providers (Western Union and MoneyGram) that are active across a large number of corridors. We lag all explanatory variables. As seco