Lowering Remittance Costs Can Unlock Billions in Additional Funds

A new study published in World Development shows that reducing remittance transaction costs can stimulate significant increases in money sent home by migrants. The research found that a 10% drop in fees leads to a 0.9% rise in remittances in the short term, with funds stabilizing at a permanently higher level afterward.

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What does this mean for global remittance flows? According to the study's models, lowering costs to the UN's Sustainable Development Goal target of 3% could unlock $32 billion in additional remittances globally per year. That's more than the total direct savings from the fee reductions themselves, implying an "absolute elasticity" greater than one.

As a fintech company focused on lowering the barriers between people and financial institutions globally, these findings validate Almond's mission. By leveraging blockchain, crypto bridges, and settlement optimization, we aim to dramatically reduce friction in cross-border payments.

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If we can streamline remittance channels as intended, the research indicates the potential impacts are immense. More money could reach more people around the world faster. And the funds are sorely needed—most remittances support basic family needs like food, medical care, or school expenses.

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Of course, reducing costs is just one piece of the puzzle. As the study discusses, factors like financial literacy, transparent pricing, ICT infrastructure, and competitive payment channels also heavily influence the willingness and ability to send money across borders. Almond seeks to drive progress across all these dimensions through customer-centric design and new technologies.

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There is still much work to be done, but the prizes are monumental both for societies and families worldwide. We're excited to push ahead on our mission of enabling money without borders or obstacles. Lower fees mean more funds in more pockets—let's get there together.

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About the Author

Howard Davidson is the CMO of Almond FinTech

Almond FinTech is a B2B fintech company transforming cross-border payments by empowering financial institutions and their customers with the best possible rates and near-instant FX settlements across all corridors globally. With Almond technology, institutions can guarantee fast, affordable, and transparent cross-border transactions. Finally.