Remittances cost too much and take far too long. We can do better.

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For millions of families in emerging markets, remittances are not just a source of income, they are a vital financial lifeline. The remittance inflow market reached USD $665 billion in 2023, positioning it as the largest source of foreign capital for many countries. These funds enable families to pay for food, education, health care and other essentials, providing hope for a better future. Yet despite their critical role, the process of sending and receiving remittances remains fraught with challenges. High fees, delayed transactions and limited access to financial infrastructure have kept the true potential of remittances out of reach for too many.

Remittances should be a source of empowerment, but the reality is far from it. Transaction fees for sending money across borders can exceed 7%, which means that more than a quarter of the funds are lost to service charges before they even reach their intended recipient. This financial drain exacerbates poverty rather than alleviating it. The United Nations has committed to lowering remittance costs to below 3% by 2030, but without significant reform, millions of families will continue to lose vital support to predatory fees and inefficiencies.

It's not just the fees. Even with the advancement of digital technologies, the speed of remittance transfers remains painfully slow. Many transfers take days — or even weeks — to arrive, leaving families vulnerable when they need money most, whether it's for medical emergencies or other urgent expenses. Much of this lag is due to outdated infrastructure and traditional banking systems that haven't adapted to the needs of today's global economy.

The lack of financial inclusion compounds the problem. Globally, about 2.5 billion adults don't use formal financial services, and the vast majority of them — 75% — are from low-income backgrounds. For these individuals, accessing remittances can be especially difficult. Without access to bank accounts or digital payment platforms, they are often forced to rely on informal and costly channels, which further erodes the value of the funds sent to them. In rural and underserved areas, these challenges are amplified, leaving the most vulnerable populations with limited options to receive their much-needed financial support.

Modernizing remittances is key to unlocking their potential as an economic tool. It's not just about technology — it's about creating an ecosystem that lowers costs, speeds transactions and improves accessibility.

Policy incentives should encourage remittance providers to adopt low-cost digital channels like blockchain or decentralized finance (DeFi), offering faster and cheaper alternatives to traditional banking. Governments can drive competition and innovation through supportive regulatory frameworks, helping to reduce costs and expand access.

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Investment in financial infrastructure, especially in underserved areas, is also essential. This includes promoting mobile money adoption, improving internet access in rural regions and ensuring unbanked populations can access services. Governments can partner with fintech companies to create secure, accessible digital payment networks.

Finally, strategic partnerships between fintech companies, banks and remittance providers are crucial to expand access, cut fees and shorten transfer times, significantly reducing costs for certain regions. These partnerships show that innovation and cooperation are key to transforming the industry.

Modernizing the remittance process is crucial to unlocking its full potential as a tool for economic empowerment. Streamlined, efficient systems can reduce manual labor and minimize errors that often delay or disrupt remittance transfers. For instance, in countries that rely heavily on remittances, like the Philippines or Mexico, faster and cheaper transfers will increase household spending on critical services such as health care and education, and encourage more investment in small business.

Moreover, reducing the costs and inefficiencies in remittances can empower recipients to save and invest more, leading to financial inclusion and long-term economic growth. This would also help create a more equitable financial ecosystem, where everyone — regardless of their geographic location or socioeconomic status — can access the benefits of a globalized economy.

Remittances are far more than just financial transfers. They represent hope, stability, and opportunity for millions of families. But the systems we rely on today are too costly, too slow and too inaccessible for many. Reducing costs, improving access and modernizing the infrastructure ensures that every dollar reaches its destination safely, quickly and affordably. And it's up to governments, financial institutions and tech companies to come together and create solutions that make remittances both affordable and accessible.

This isn't just a question of financial efficiency — it's about equity. It's about making sure that every dollar sent home, whether to a rural village or an urban center, has the maximum impact. With the right policy frameworks, technology solutions, and strategic partnerships, remittances can be transformed from a source of financial vulnerability to a true engine of economic empowerment.