International Remittance Services – The transfer of funds across borders, also referred to as “international remittance” or “cross-border remittance, has become an essential factor for driving economic growth, as evidenced by its continued presence on various political agendas. Transferring funds by migrant workers to developing nations not only benefits their own families but also contributes positively to the economy of the country receiving the funds. Remittances, whether they take place domestically or across borders, have been proven to yield notable and beneficial outcomes.
International Remittances and World Bank
There are many different ways in which remittance transfers can be made, including cash, goods and services, bill payments, online shopping, and gamification of services.
This comes with using individuals who provide this service to their local immigrant communities and services from specialized global money transfer operators.
The importance of remittances by the African diaspora and its problems are very different from those of the rest of the world. African per capita income is now increasing in tandem with other developing countries as African immigrants are highly skilled workers. In comparison with Asian migrant workers, African migrants are much more educated and skilled.
A study from December 2012 revealed that over 247 million individuals, equivalent to 3.4 percent of the global population, are residing in foreign countries. The quantity of people migrating to different countries globally has shown a steady increase over the past two decades, reaching 175 million in 2000 and exceeding 247 million in 2013, with a further increase to over 251 million in 2015
Impact of International Remittances
Remittances are part of an individual’s access to financial services. A good remittance product improves value for the user in the short term and access to other financial products in the long term. It also increases competition and could move transactions to the formal sector. Remittances play a critical role in supporting the welfare of many people and households in developing countries.
There are many questions that need answers to find out “what’s happening and why.” For now, we can focus on the below questions:
- Why are remittances to Africa not growing according to international standards?
- How do you evaluate the impact of remittances on households?
These two questions are on our agenda for this post. Moreover, remittances can boost economic growth. AILabPage’s research indicates that it can have a greater impact than ODA and FDI. This might suggest that remittances serve as a social safety net for those who are not the poorest but who would be in need of targeted social assistance without remittances.
Few Records of Remittance Flow
Why is there no African country on this hit list?. Are we really sure that the
African remittance outlook is in Plug-and-play ,mode and not plug, pay and then pray?
The main issues in Africa revolve around government policies and a lack of financial literacy among migrants. The major challenge is the cost of remittances, as most of the hard-earned money is eaten by money transfer agents, banks, etc. This is where mobile money comes in as an angle to reduce speed, time, cost, and even energy.
As a remittance service provider, one needs to take care of the exchange rate and their need and greed for margins, transfer fees and charges, reputation in the market, speed of processing, methods and options to transfer, and after- and in-service customer support.
Technology for Remittances – Remittance Intelligence
When will we stop reinventing the wheel, as remittances are not new? All the eco systems around it, i.e., channels (digital or traditional), systems, methods, infrastructure, issues, regulations, and policies on the sending and receiving sides, are done.
From a learning perspective, Asia-Pacific has too much to learn and adapt to give any remittance business a flying start. No big changes in final outcomes: migrants avoid switching to more expensive or less transparent remittance channels but do not change the amount or frequency of remitting. The need is to change and design policies to reduce transaction costs, strengthen the formal financial infrastructure, and leverage remittances to improve access to financial services. Experimenting further with adding additional content on budgeting, saving, and debt management seems fruitful for policy refinement in this area.
Remittances & Political Economy of social welfare
Remittances arguably play an important role in the political economy of social welfare. regulation, which allowed for non-bank formal providers to offer cross-border remittances independently of a bank. This was intended to spur innovation that would bring down the cost and improve the ease of sending remittances, and indeed, it did the job.
The guiding tenets of neoliberal economic and social policies prescribe the primacy of the private sector in advancing development by curtailing public intervention in private matters via deregulation and the reduction of the civil service. It is plausible that remittances were regarded as a component of the private industry.
Remittances are more commonly received by younger and more wealthy individuals, whereas the elderly and impoverished are less likely to receive such financial assistance. Simultaneously, it is necessary to implement migration policies that are more accommodating, including the proper authorization of dual citizenship and the provision of political and economic entitlements to individuals living abroad.
Moreover, informal channels play a crucial role for numerous adults who lack formal identification and face difficulties in receiving their due share. Many migrants encounter obstacles in utilizing formal money transfer services, such as financial constraints and difficulty obtaining the necessary paperwork.
Books + Other readings Referred
- Open Internet – NewsPortals, Economic development report papers of world bank
- Personal experience of @AILabPage members.
Conclusion – According to research on cross-border remittances, the total amount of money sent is affected by the cost of the service. Therefore, it is crucial for governments, policymakers, regulatory bodies, remittance service providers, senders, and receivers to be educated on financial literacy as a significant advancement.
This will enable literally hundreds of millions of people to have and use the power of remittance and a bank account, get financially included, start and grow businesses, and prevent fraud. Transactions will then be safe, quick, and easy.
====================== About the Author =================================
Read about Author at : About Me
Thank you all, for spending your time reading this post. Please share your feedback / comments / critics / agreements or disagreement. Remark for more details about posts, subjects and relevance please read the disclaimer.