Transparency on prices and conditions can increase consumer awareness and empower them to make informed decisions. Second, remittance information should be made more easily and widely available to consumers. A comprehensive reform of the Rwandan payment system, for example, has helped reduce the average cost of sending money to Rwanda from 19% to less than 15% in the past two years. Improve efficiencyįirst, public authorities should make payment system infrastructure more efficient so as to eliminate inefficiencies in the flow of funds, both internationally and domestically. So what should the global development community, remittance-service providers and public authorities do to bring down costs? 1. Achieving that goal would save migrants as much as $16bn annually. The World Bank is supporting international efforts on the 5x5 Objective, which has been endorsed by the G8 and G20 and aims to bring global remittance prices down to 5% by 2014. About $60bn (£38bn) in remittances was sent to the African continent in 2012 more than $7bn (£4.4bn) was drained in fees. This is a serious issue for the development community because it takes money away from the world's poorest. In July 2011, the average remittance price to Africa was 10.9%. And trends show that the cost has been going up, not down. The World Bank's Send Money Africa database shows that the cost of sending money to Africa is too high – averaging 12% in December 2012. The problem of exorbitant remittance prices has long been most intense in Africa. Even more staggering is the fact that for some migrants, the cost of sending money home is more than 20%. However, there are regions, such as Africa (pdf), where remittance charges average about 12%. For example, sending money from the United Arab Emirates costs an average of about 4%. In some regions of the world, theyare indeed lower. When migrants send $200 home, for example, the transaction cost is an average of almost $18. Globally, remittance prices average 9% of the sum being transferred. The World Bank monitors remittance costs through the Remittance Prices Worldwide database. In the same way a plumber would fix a dripping tap, the professionals who work in the global financial system have a responsibility to ensure money is safely transferred from Point A to Point B in every transaction, and that leaks from remittances are fixed.
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