Often Ignored, Remittance Fees Squeeze the World’s Poor
The secret is out! Remittances – money sent home by foreign workers – are of huge importance to developing nations, but the transaction costs remain frustratingly high.
Much of this money sent by the millions of economic migrants globally goes to support poor relatives and loved ones back home. Yet, they are being squeezed with unnecessary fees.
How bad? According to the World Bank, the average cost for sending the equivalent of US$200 in remittances globally in 2018, in terms of percentage, was 8% at banks and 6% at traditional money lending firms – it’s criminal.
Making money off the desperate
It’s a fact. People with less money pay more for financial services, as their hard-earned income is eroded by fees, including for remittances – it’s like a tax on being poor.
The World Bank, says that over US$300 billion was sent in remittances in 2018 alone, and banks and money lenders are making a fortune from it.
We aim to change that, that’s why membership at hi is open to all and is not a closed shop.
As a not-for-profit digital bank, we believe that global, open, instant, and low/no cost movement of money will create immense economic opportunity and that financial services should advance financial inclusion not penalise people with unfair fees.
High remittance costs = financial alarm bells
Why are high costs being passed on to customers you ask? One reason is that established money lenders have to pay operating costs to keep staff and rent physical stores
Our leaders are also to blame. Actions by the industrialised world have made it harder to transfer money to poor countries, penalising many innocent people and racking up huge compliance costs.
However the fact remains that huge profits are made off the poorest through remittance fees.
The good news? Established players are finally facing pressure to charge less due to competition from emerging fintech challengers.
Leading a FinTech Revolution
It’s true. Leveraging cutting-edge technologies, fintech is making international remittance cost-effective, secure, and swift. Powered by blockchain and our members, hi is part of this revolution.
By building a membership ecosystem of services that treats its users not as customers, but as key stakeholders, our members (that’s you) can buy, exchange, and transfer money in real-time.
This means speed, one of the biggest advantages that hi offers for international remittance. Where a bank can go at a snail’s pace to transfer money, using hi means it goes at light speed.
It’s obvious, things need to change. We all deserve a right to access financial services and to control our money without excess charges.
And, like you we make choices, and hi wants to be that catalyst for global financial inclusion not join traditional banking’s closed shop of exclusion. Sound good? Then hop on board!