10.c.1 Remittance Costs as a Proportion of the Amount Remitted
Target: 10.c: By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent
Goal 10: Reduce inequality within and among countries
Custodian Organization: World Bank
Tier Classification: Tier I
To facilitate the implementation of the global indicator framework, all indicators are classified by the IAEG-SDGs (Inter-Agency and Expert Group on Sustainable Development Goals Indicators) into three tiers on the basis of their level of methodological development and the availability of data at the global level, as follows:
Tier I: Indicator is conceptually clear, has an internationally established methodology and standards are available, and data are regularly produced by countries for at least 50 per cent of countries and of the population in every region where the indicator is relevant.
Tier II: Indicator is conceptually clear, has an internationally established methodology and standards are available, but data are not regularly produced by countries.
Tier III: No internationally established methodology or standards are yet available for the indicator, but methodology/standards are being (or will be) developed or tested.
Definition: The target includes two components. The first component is that transaction costs for migrant remittances should be 3% or less by 2030. This transaction cost should be intended as “Global average total cost of sending $200 (or equivalent in local sending currency) and expressed as % of amount sent”. This indicator is readily available and published on a quarterly basis by the World Bank in the Remittance Prices Worldwide database, which covers 365 country corridors, from 48 sending to 105 receiving countries. The second component is to eliminate corridor where cost is 5% or higher. This should be intended in the sense that it should be possible for remittance senders to send money to the beneficiary for an average cost of 5% or less of the amount sent. For this purpose, it should suffice that in each corridor there are at least 3 services, meeting a defined set of service requirements (including service quality, reach etc.), for which the average is 5% or less.
Rationale: Data for these indicators have been collected by the World Bank through the Remittance Prices Worldwide (RPW) database since 2008 for the purpose of monitoring the G8 / G20 target on reducing remittance prices. Also known as the “5×5 objective”, this goal was adopted by the G8 in 2009, and it refers to reduction of the global average total cost of migrant remittances by 5 percentage points in 5 years. To achieve this objective, the governments in both sending and receiving countries should consider implementing reforms based upon the General Principles for International Remittances Services by the World Bank/Committee on Payment and Settlement Systems (January 2007). This internationally agreed framework has proven effective in helping reduce the cost of remittances and guiding actions to enhance the efficiency of international remittances. The World Bank’s RPW database is the only global database that monitors remittance prices across all regions of the world. RPW was launched by the World Bank in September 2008, and is a key tool in monitoring the evolution of costs to the remitters and the beneficiaries from sending and receiving money in major country corridors.
Concepts: International remittance transfer. A cross-border person-to-person payment of relatively low value. The transfers are typically recurrent payments by migrant workers (who send money to their families in their home country every month). In the report, the term “remittance transfer” is used for simplicity (ie it is assumed the transfer is international).
Remittance service: A service that enables end users to send and/or receive remittance transfers.
Remittance service provider (RSP): An entity, operating as a business, that provides a remittance service for a price to end users, either directly or through agents. These include both banks and money transfer operators, as defined below.
Money transfer operator (MTO): A non-deposit taking payment service provider where the service involves payment per transfer (or possibly payment for a set or series of transfers) by the sender to the payment service provider (for example, by cash or bank transfer) – i.e. as opposed to a situation where the payment service provider debits an account held by the sender at the payment service provider. MTOs may include both traditional players focusing on delivering funds in cash and innovative players which may adopt a variety of different business models for the delivery of the transactions. Price. The total cost to the end users of sending a remittance transfer (including the fees charged to the sender and the margin by which the exchange rate charged to the end users is above the current interbank exchange rate).
Data Source: Data for this indicator was primarily collected from the United Nations Statistics Division’s Open SDG Data Hub. National level data is provided to the United Nations Statistics Division by the respective nation, unless otherwise noted. To learn more about the data used in this portal, visit the about page.
Data is accurate as of January 17, 2020
10.c.1 Remittance Costs as a Proportion of the Amount Remitted
10.c.1 Remittance Costs as a Proportion of the Amount Remitted Sustainable Development Goals
10. Reduce inequality within and among countries
The international community has made significant strides towards lifting people out of poverty. The most vulnerable nations – the least developed countries, the landlocked developing countries and the small island developing states – continue to make inroads into poverty reduction. However, inequality still persists and large disparities remain in access to health and education services and other assets.
Additionally, while income inequality between countries may have been reduced, inequality within countries has risen. There is growing consensus that economic growth is not sufﬁcient to reduce poverty if it is not inclusive and if it does not involve the three dimensions of sustainable development – economic, social and environmental.
To reduce inequality, policies should be universal in principle paying attention to the needs of disadvantaged and marginalized populations.