Global remittances and charges

Total global remittances in 2022 were $626 billion. The total volume was $121 billion in 2000 and $420 billion in 2010.  (Go here for time line.)

According to the World Bank, the global average charge for remittances in late 2022 was 6%.  The percentage of remittances with a charge of less than 5% increased from 17% in 2009 to 42% in 2022.  Thus, the UN’s target for 2030 of 3%, and none higher than 5%, are being approached.

But why are remittance charges high? The culprits include complexity in regulation, including anti-money laundering controls, underdevelopment of banking infrastructure, hidden fees such as exchange rate margins, immaturity of digital payment systems. Mobile phone digital payment systems such as Venmo account for roughly 1% of global payment value.

Here is a World Bank-run analysis of remittance vendors and charges for the U.S. to Nigeria. The charges range from zero to 6% and average 3%. For the U.S. to Honduras there are no costless  methods and the average is 4.13%.

Competitors for low-cost remittances today include Azimo, Xoom and WorldRemit. To get a sense of how customers of regular remittances compare these vendors, see this analysis, which concludes “It’s impossible to nominate a winner in this category. While Xoom edges ahead on rates for some currencies, WorldRemit offers a slightly better deal on others.”



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