Remittances: How to Shorten the Long Way Home

This article lists remittance products types, players and networks used to channel remittances. It also assesses the potential of new innovations in this field.The study predicts that remittance flows will decrease temporarily in 2009, and will stabilize in 2010. Findings indicate that:

• Main players have remained unchanged;
• Interesting pilots are being developed;
• Remittance inflows doubled in the period 2003-2008, but growth slowed down in 2008;
• Cash-to-cash remittances, offered by money transfer organizations such as Western Union, is still the leading product;
• Most promising pilots consist of linkages between mobile-payments systems and card schemes or money transfer organizations;
• Success of a remittance service depends on the distribution network at the senders' and receivers' ends.

Mobile payments are often linked to remittance products, although M-remittances are still at a nascent stage. Innovations in remittances are preceded by the deployment of these innovations in the domestic payments system. Finally, the study states that regulatory issues could arise on the Know-Your-Customer issue for card-less withdrawal at ATMs or the fact that mobile payment solutions involve holding deposit balances in mobile accounts.