The average cost for sending $200 across the world declined slightly from 6.20% to 6.18% in 2023, a new report by Remittance Prices Worldwide (RPW) shows.
The Global Average has remained below 7% since Q1 2019. Overall, this represents a decline of 3.49 percentage points since Q1 2009, when the figure was recorded at 9.67 percent.
Launched in September 2008 by the World Bank, RPW monitors the cost incurred by remitters when sending money along major remittance corridors. RPW is used as a reference for measuring progress towards global cost reduction objectives.
“RPW is used as a reference for measuring progress towards global cost reduction objectives, including the G20 commitment to reduce the global average to 3 percent, which is being pursued in partnership with governments, service providers, and other stakeholders.”
From the report, we can see that it is considerably cheaper to send remittances using digital channels. In Q3 2023:
- The global average for digital remittances was recorded at 4.84%, while
- The global average for non-digital remittances was 6.77%
In particular, mobile money remains the lowest cost instrument to originate remittances and was also the lowest cost instrument to receive remittances.
Mobile Operators and MTO’s, where fintechs are included, are cheaper than Banks and the Post Office, when it comes to sending $200 worldwide.According to the research, since 2021, transfer fees charged by mobile operators have been around 1.5 – 2.0%, with the average cost coming to 3.0%, depending on the rate of foreign exchange.
Banks remain the most expensive type of service provider, with an average cost of 11.48%, more than 5 percentage points ahead of the global average.
The cost of sending remittances to a bank account within the same bank or to a partner of the originating bank was recorded at 9.26%. In contrast, sending money to a bank account, regardless of originating bank, was 6.74%.
Overall, digital services account for 30% of all services collected in Q3 2023.
On a regional outlook, Sub-Saharan Africa remains the most expensive region to send money to, recorded at 7.39 percent total average cost in Q3 2023. Alternatively, South Asia remains the lowest cost receiving region, with an average cost of 5.44 percent.
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