Benchmarking factors that influence remittance costs

Benchmarking factors that influence remittance costs

Based on a World Bank projection, remittances to the developing nations are expected to reach US $440 billion in 2015 alone. The global average total cost to send remittance is estimated at 7.68 percent which is way above the goal of 5 percent despite the ‘5x5 objective’ launched at the G8 in Aquila, Italia in 2009. In order to make further progress in reducing the cost of remittances it is important to understand which factors influence these costs and which policy interventions have been most effective and where these interventions have been made. The specific objective of this project ...

Based on a World Bank projection, remittances to the developing nations are expected to reach US $440 billion in 2015 alone. The global average total cost to send remittance is estimated at 7.68 percent which is way above the goal of 5 percent despite the ‘5x5 objective’ launched at the G8 in Aquila, Italia in 2009. In order to make further progress in reducing the cost of remittances it is important to understand which factors influence these costs and which policy interventions have been most effective and where these interventions have been made. The specific objective of this project between Consumers International and The World Bank is to develop and pilot a benchmarking methodology to measure regulatory and market factors that influence remittance pricing, including the size of the corridor, the legal / regulatory framework, compliance costs, the level of competition in the market, and consumer awareness of options and pricing.

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