According to a new World Bank report, most remittances are flowing to India, China, the Philippines, Mexico and Nigeria, most of it in cold, hard cash.
How much are people sending home? $406 billion in 2012. That figure represents "more than three times that of official development assistance."
A lack of market competition and high fees are keeping it from growing even faster. Though offering remittance services via mobile phones could potentially be huge boon, the World Bank doesn't see it hitting the mark just yet.
Although channeling international remittances through mobile phones has the promise of expanding access and lowering costs, this service has yet to take off in a substantial way. The use of mobile phones has skyrocketed worldwide from 0.7 billion in 2000 to 6.0 billion in 2011, of which 4.6 billion are being used in developing countries.
[However] only 20 percent of 130 mobile banking operators worldwide offered international remittance services.
According to the newly-formed Better Than Cash Alliance, "half of the world’s adult population, approximately 2.5 billion adults, lack access to formal financial services. As a result, most poor households live almost entirely in a cash economy."
Shifting this huge flow of money into digital accounts offers a host of benefits: speed, security, transparency and lower fees. Most importantly, mobile cash flows offer an easier on-ramp to financial service offerings like savings accounts and microloans, from which the poor are typically excluded.
Read the full Migration Development Brief here (pdf).
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