On 16th June, the world celebrates the fourth annual International Day of Family Remittances (IDFR). Officially adopted by the United Nations Resolution on International Migration and Development, the IDFR recognises the contribution that remittances by foreign workers make to the lives of their families back home and their country of origin’s economy. It also aims to encourage the public and private sectors to collaborate to make sure the money is put to use efficiently.
Remittance plays an important role for both the recipients and the local economy. These funds help recipients to pay bills like rent and utilities and to buy necessities such as food and clothing. In turn, this spending boosts the economy and increases the country’s gross domestic product, the universally recognised measure of economic growth.
According to World Bank data, the flow of money to some of the developing countries receiving the highest volume of remittances, like Mexico and the Philippines, has grown steadily since the launch of the IDFR celebration four years ago. We’ve seen this trend reflected in the increase in the number of transactions we process on behalf of our customers as well.
However, remittance costs are still far too high, meaning millions of families and developing economies are missing out. Transferring money to Africa is particularly expensive. According to a report by the Overseas Development Institute, the global average cost of sending money abroad is roughly 7%, but the average for South Africa is nearly 18%. These excessive fees cost the local economy $1.8 billion, enough to put four million children through school or to provide clean water to 21 million people.
At least part of the reason for these high costs is the dominance of one or two remittance providers in each region or country. So Xpress Money is calling on the industry to abolish exclusivity and embrace collaboration. We believe this will ease the flow of money to families who rely on financial support from their loved ones living abroad.
Here at Xpress Money, we have launched our #wesaluteyou campaign to coincide with the IDFR celebration as a way of recognising the commendable efforts of our customers and all other expats as they provide for their families back home. Keep an eye out for this hashtag on social media over the coming days.
To find out more about our remittance service, with an average global cost of just 2%, please click here.