During the next five years, US$1 trillion in worker remittances will flow to rural areas, dwarfing official development aid by a 4-to-1 ratio – and rural areas only represent half of worldwide remittances.
Background on remittances
To be able to send remittances is the reason why so many people – almost 1 in 8 people on the planet – migrate, whether across borders, continents, or even within their country of birth. Migration flows may change due to political or economic drivers, but the phenomenon will remain.
Whilst remittances are “people’s money” much needed by the beneficiaries and their communities for daily consumption, research indicates that this market segment also saves, requires insurance products, and takes up and reimburses loans – though today generally not from the formal banking sector – and responds positively to financial education efforts.
WSBI and Fair Value Remittances
WSBI’s payments practice already in 2003 formulated the “Fair Value Remittances” value proposition which promotes end-to-end transparency and accountability in migrating from cash to account-based remittances and served as input to the 2007 BIS/World Bank International Guiding Principles. WSBI also developed a proof-of-concept international remittance switch allowing multiple remittance service providers to interconnect thus providing for a cost-efficient alternative to dominant networks. WSBI continues to work with policy makers and members worldwide to continuously improve the remittance value proposition whilst enabling wider financial inclusion through remittance-linked products and services.
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