Washington, D.C., April 22, 2010—
The World Bank Group published the fourth update of the
Remittance Prices Worldwide database
, that tracks what migrant workers pay to send money to their family at home, showing that global average total cost for sending $200 is down to 8.72 percent but that average costs for some country corridors are still as high as 22 percent, with some providers offering services at a cost that exceeds 40 percent.
The database benefits migrant workers and households in developing countries by making prices more transparent, putting pressure on national authorities to make their payment systems more efficient, and on providers to improve services and reduce prices. It is more costly to remit through banks than money transfer operators and non bank operators such as post offices, the data shows. Moreover, high costs are not just in countries with poorly developed retail payment systems.
From a country perspective, remittances from Malaysia, Russia, Saudi Arabia, Singapore and the United Arab Emirates are the least costly, while Australia, Brazil, Japan, South Africa and Tanzania are among the most costly.
A concerted effort to offer more competitive services can significantly reduce fees. Both public authorities and service providers can work to ensure low costs and efficient provision of remittance services.
Janamitra Devan, World Bank Group Vice President for Financial and Private Sector Development and Chairman of the Global Remittances Working Group, said “Any reduction in remittance prices will enable more money to remain in the pockets of migrants and their families. We are committed to achieving a reduction of 5 percentage points in 5 years, an objective endorsed by the G8, that would enable recipients in developing countries to receive up to $16 billion more each year.”
“Transparency in pricing is one big issue for migrants. Shedding light on prices also creates opportunities for new operators to enter the market and offer services at lower prices, which will benefit migrants and their families,” said Peer Stein, IFC Global Business Line Leader for Access to Finance.
“However, transparency and competition are not the only factors affecting the cost of remittance services. An efficient payment system infrastructure and a sound legal framework also play a critical role in the global effort for cost reduction” claims Massimo Cirasino, Head of the Payment Systems Development Group at the World Bank and Chairman of the Task Force that produced the existing international standards in the field of remittances.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit
www.worldbank.org
,
www.miga.org
, and
www.ifc.org
.
