The mobile money industry plays a key role within the global remittances space. This post from the GSMA focuses on the customer benefits of sending and receiving international remittances using mobile money.
More than 250 million people (or 3.4% of the global population) live outside their countries of birth. Migrants often send money back home, providing a financial lifeline to their families, as well as contributing to the economies of their home countries by paying for health, education or investing in trade.
Traditionally, formal remittances could only be sent by two main channels: banks and money transfer operators (MTOs). The remittance industry has evolved in recent years, with mobile operators and fintech companies providing attractive alternatives to the traditional models by offering more convenient and cheaper methods of sending remittances via mobile phones.
Despite these changes, costs remain very high—in 2015, the global average cost of sending $200 in remittances (including all fees and charges) was 7.4 percent. This average masks regional differences—for instance, Sub-Saharan Africa remains the most expensive region, with an average cost of 9.5 percent for sending $200.