Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar
This paper uses data for up to 365 corridors from 2011 to 2020 to document development of remittance fees over time and across corridors and to explore the factors that explain variation in remittanceprices across corridors. We rely on the World Bank’s RemittancePrices Worldwide database, which provides detailed cost analysis on the product level. Considering data for 2020, we find variation between 1 and 25 percent for a 200 USD remittance across corridors, but also significant variation across corridors for the same sending and the same receiving country. Over
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.
Rocio Gondo, Altynai Aidarova, and Mr. Manmohan Singh
to migrants and small businesses. The average cost of sending US$200 remittances from Russia is about 1.9 percent, and overall, it has been getting cheaper (figure below).
Cost of Remittances is Decreasing
Source: The World Bank, RemittancePrices Worldwide ( http://remittanceprices.worldbank.org )
Transfers in rubles from Russia to CIS countries have been gradually increasing for the last seven years. More than 53 percent of cross-border transfers were conducted in rubles. However, it varies from country to country. For example, 87.7 percent
high remittanceprices is a lack of transparency in the market. It is difficult for consumers to compare prices because several variables make up remittanceprices. The cost of a remittance transaction typically consists of a fee charged by the service provider and a currency-conversion fee for delivery of local currency to the beneficiary in another country. Other factors include exclusivity agreements that limit competition, ill-designed regulation that creates high barriers to entry, and limitations on access to payment systems.
The average cost of sending